Cover Page
Cover Page - shares | 3 Months Ended | |
Dec. 31, 2021 | Jan. 31, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-08359 | |
Entity Registrant Name | NEW JERSEY RESOURCES CORPORATION | |
Entity Incorporation, State or Country Code | NJ | |
Entity Tax Identification Number | 22-2376465 | |
Entity Address, Address Line One | 1415 Wyckoff Road | |
Entity Address, City or Town | Wall | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07719 | |
City Area Code | (732) | |
Local Phone Number | 938‑1480 | |
Title of 12(b) Security | Common Stock - $2.50 Par Value | |
Trading Symbol | NJR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Business | false | |
Entity Common Stock, Shares Outstanding | 96,061,402 | |
Entity Central Index Key | 0000356309 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING REVENUES | ||
Utility | $ 274,435 | $ 195,729 |
Nonutility | 401,407 | 258,576 |
Total operating revenues | 675,842 | 454,305 |
Natural gas purchases: | ||
Gas purchases - Related parties | 1,846 | 1,734 |
Operation and maintenance | 68,984 | 73,636 |
Regulatory rider expenses | 16,671 | 10,701 |
Depreciation and amortization | 30,393 | 27,362 |
Total operating expenses | 518,957 | 342,825 |
OPERATING INCOME | 156,885 | 111,480 |
Other income, net | 4,136 | 4,117 |
Interest expense, net of capitalized interest | 19,477 | 19,786 |
INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF AFFILIATES | 141,544 | 95,811 |
Income tax provision | 30,807 | 17,441 |
Equity in earnings of affiliates | 575 | 2,675 |
NET INCOME | $ 111,312 | $ 81,045 |
EARNINGS PER COMMON SHARE | ||
Basic (usd per share) | $ 1.16 | $ 0.84 |
Diluted (usd per share) | $ 1.16 | $ 0.84 |
WEIGHTED AVERAGE SHARES OUTSTANDING | ||
Basic (in shares) | 95,944 | 96,114 |
Diluted (in shares) | 96,356 | 96,415 |
Regulated | ||
Natural gas purchases: | ||
Gas purchases - Utility and Nonutility | $ 122,269 | $ 56,145 |
Unregulated | ||
Natural gas purchases: | ||
Gas purchases - Utility and Nonutility | $ 278,794 | $ 173,247 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 111,312 | $ 81,045 |
Other comprehensive income, net of tax | ||
Reclassifications of losses to net income on derivatives designated as hedging instruments, net of tax of $(79) and $(112), respectively | 264 | 231 |
Adjustment to postemployment benefit obligation, net of tax of $(233) and $(245), respectively | 766 | 812 |
Other comprehensive income | 1,030 | 1,043 |
Comprehensive income | $ 112,342 | $ 82,088 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Tax on reclassifications of losses to net income on derivatives | $ (79) | $ (112) |
Tax on adjustment to postemployment benefit obligation | $ (233) | $ (245) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES | ||
Net income | $ 111,312 | $ 81,045 |
Adjustments to reconcile net income to cash flows from operating activities | ||
Unrealized (gain) on derivative instruments | (82,191) | (37,491) |
Depreciation and amortization | 30,393 | 27,362 |
Amortization of acquired wholesale energy contracts | 589 | 716 |
Allowance for equity used during construction | (2,494) | (4,931) |
Allowance for doubtful accounts | 550 | 3,970 |
Non cash lease expense | 889 | 1,324 |
Deferred income taxes | 14,855 | 17,667 |
Equivalent value of ITCs recognized on equipment financing | (727) | 0 |
Manufactured gas plant remediation costs | (12,368) | (1,274) |
Equity in earnings, net of distributions received from equity investees and impairments | 481 | (1,189) |
Cost of removal - asset retirement obligations | (282) | (256) |
Contributions to postemployment benefit plans | (1,942) | (1,670) |
Taxes related to stock-based compensation | (166) | 76 |
Changes in: | ||
Components of working capital | (153,195) | (74,434) |
Other noncurrent assets | (1,529) | 11,806 |
Other noncurrent liabilities | 58,418 | 9,002 |
Cash flows (used in) from operating activities | (37,407) | 31,723 |
Expenditures for: | ||
Cost of removal | (9,114) | (14,765) |
Distribution from equity investees in excess of equity in earnings | 244 | 1,413 |
Investments in equity investees | 0 | (286) |
Cash flows (used in) investing activities | (164,054) | (108,753) |
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | ||
Proceeds from long-term debt | 100,000 | 0 |
Payments of long-term debt | (1,810) | (5,203) |
Proceeds from short-term debt, net | 110,650 | 9,000 |
Proceeds from sale leaseback transaction - solar | 3,300 | 12,124 |
Proceeds from sale leaseback transaction | 17,300 | 0 |
Payments of common stock dividends | (31,841) | (31,902) |
Proceeds from issuance of common stock - DRP | 3,805 | 3,911 |
Tax withholding payments related to net settled stock compensation | (3,433) | (5,534) |
Cash flows from (used in) financing activities | 197,971 | (17,604) |
Change in cash, cash equivalents and restricted cash | (3,490) | (94,634) |
Cash, cash equivalents and restricted cash at beginning of period | 6,043 | 119,423 |
Cash, cash equivalents and restricted cash at end of period | 2,553 | 24,789 |
CHANGES IN COMPONENTS OF WORKING CAPITAL | ||
Receivables | (117,010) | (108,143) |
Inventories | (48,866) | 5,792 |
Recovery of natural gas costs | (4,505) | (10,542) |
Natural gas purchases payable | (18,752) | 24,146 |
Natural gas purchases payable - related parties | (10) | 74 |
Deferred revenue | 51,107 | (819) |
Accounts payable and other | (44,374) | (38,413) |
Prepaid expenses | (6,951) | (5,045) |
Prepaid and accrued taxes | 31,205 | 10,568 |
Restricted broker margin accounts | (459) | 38,986 |
Customers' credit balances and deposits | 6,080 | 7,014 |
Other current assets | (660) | 1,948 |
Total | (153,195) | (74,434) |
Cash paid (received) for: | ||
Interest (net of amounts capitalized) | 13,935 | 11,298 |
Income taxes | (229) | 230 |
Accrued capital expenditures | 57,129 | 4,205 |
Utility plant | ||
Expenditures for: | ||
Payments to acquire PP&E | (64,350) | (64,481) |
Solar equipment | ||
Expenditures for: | ||
Payments to acquire PP&E | (25,380) | (22,335) |
Storage and Transportation and other | ||
Expenditures for: | ||
Payments to acquire PP&E | $ (65,454) | $ (8,299) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
PROPERTY, PLANT AND EQUIPMENT | ||
Utility plant, at cost | $ 3,397,776 | $ 3,324,611 |
Construction work in progress | 158,052 | 182,196 |
Nonutility plant and equipment, at cost | 1,136,718 | 1,124,896 |
Construction work in progress | 452,685 | 365,346 |
Total property, plant and equipment | 5,145,231 | 4,997,049 |
Accumulated depreciation and amortization, utility plant | (622,934) | (611,827) |
Accumulated depreciation and amortization, nonutility plant and equipment | (179,194) | (171,709) |
Property, plant and equipment, net | 4,343,103 | 4,213,513 |
CURRENT ASSETS | ||
Cash and cash equivalents | 1,259 | 4,749 |
Customer accounts receivable | ||
Billed | 266,815 | 212,838 |
Unbilled revenues | 72,949 | 10,351 |
Allowance for doubtful accounts | (24,767) | (24,652) |
Regulatory assets | 38,653 | 30,118 |
Natural gas in storage, at average cost | 242,692 | 193,606 |
Materials and supplies, at average cost | 19,341 | 19,561 |
Prepaid expenses | 15,117 | 8,166 |
Prepaid and accrued taxes | 23,246 | 51,211 |
Derivatives, at fair value | 39,783 | 35,251 |
Restricted broker margin accounts | 42,716 | 72,840 |
Other current assets | 22,518 | 20,235 |
Total current assets | 760,322 | 634,274 |
NONCURRENT ASSETS | ||
Investments in equity method investees | 114,249 | 114,529 |
Regulatory assets | 528,074 | 522,099 |
Operating lease assets | 173,617 | 173,928 |
Derivatives, at fair value | 1,978 | 3,403 |
Intangible assets, net | 4,337 | 5,029 |
Software costs | 5,464 | 5,582 |
Other noncurrent assets | 50,013 | 49,921 |
Total noncurrent assets | 877,732 | 874,491 |
Total assets | 5,981,157 | 5,722,278 |
CAPITALIZATION | ||
Common stock, $2.50 par value; authorized 150,000,000 shares; outstanding December 31, 2021 — 95,961,710; September 30, 2021 — 95,709,662 | 241,274 | 240,644 |
Premium on common stock | 513,134 | 502,584 |
Accumulated other comprehensive loss, net of tax | (33,498) | (34,528) |
Treasury stock at cost and other; shares December 31, 2021 — 762,344; September 30, 2021 — 762,313 | (15,067) | (12,448) |
Retained earnings | 1,011,135 | 934,610 |
Common stock equity | 1,716,978 | 1,630,862 |
Long-term debt | 2,274,176 | 2,162,164 |
Total capitalization | 3,991,154 | 3,793,026 |
CURRENT LIABILITIES | ||
Current maturities of long-term debt | 74,461 | 72,840 |
Short-term debt | 487,950 | 377,300 |
Natural gas purchases payable | 149,945 | 168,697 |
Natural gas purchases payable to related parties | 851 | 861 |
Deferred revenue | 52,852 | 1,745 |
Accounts payable and other | 168,197 | 223,497 |
Dividends payable | 34,786 | 34,768 |
Accrued taxes | 6,596 | 3,356 |
Regulatory liabilities | 18,999 | 28,007 |
New Jersey Clean Energy Program | 14,416 | 16,308 |
Derivatives, at fair value | 30,049 | 87,145 |
Operating lease liabilities | 4,531 | 4,300 |
Restricted broker margin accounts | 15,475 | 0 |
Customers' credit balances and deposits | 38,666 | 32,586 |
Total current liabilities | 1,097,774 | 1,051,410 |
NONCURRENT LIABILITIES | ||
Deferred income taxes | 178,654 | 163,530 |
Deferred investment tax credits | 2,930 | 3,010 |
Deferred revenue | 14,621 | 847 |
Derivatives, at fair value | 15,261 | 13,497 |
Manufactured gas plant remediation | 126,872 | 135,012 |
Postemployment employee benefit liability | 167,335 | 169,267 |
Regulatory liabilities | 190,714 | 193,051 |
Operating lease liabilities | 141,356 | 141,363 |
Asset retirement obligation | 46,541 | 46,306 |
Other noncurrent liabilities | 7,945 | 11,959 |
Total noncurrent liabilities | 892,229 | 877,842 |
Commitments and contingent liabilities (Note 13) | ||
Total capitalization and liabilities | $ 5,981,157 | $ 5,722,278 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2021 | Sep. 30, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (usd per share) | $ 2.50 | $ 2.50 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares outstanding (in shares) | 95,961,710 | 95,709,662 |
Treasury stock at cost and other, shares (in shares) | 762,344 | 762,313 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF COMMON STOCK EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Premium on Common Stock | Accumulated Other Comprehensive (Loss) Income | Treasury Stock And Other | Retained Earnings | |
Balance as of beginning of period (in shares) at Sep. 30, 2020 | 95,949,000 | ||||||
Balance as of beginning of period at Sep. 30, 2020 | $ 1,643,896 | $ 240,243 | $ 491,982 | $ (44,315) | $ 8,485 | $ 947,501 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 81,045 | 81,045 | |||||
Other comprehensive income | 1,043 | 1,043 | |||||
Common stock issued: | |||||||
Incentive compensation plan (in shares) | 50,000 | ||||||
Incentive compensation plan | 5,534 | $ 124 | 5,410 | ||||
Dividend reinvestment plan (in shares) | [1] | 140,000 | |||||
Dividend reinvestment plan | [1] | 1,091 | (4,502) | 5,593 | |||
Cash dividend declared | (31,966) | (31,966) | |||||
Treasury stock and other | (2,429) | (2,429) | |||||
Balance as of end of period (in shares) at Dec. 31, 2020 | 96,139,000 | ||||||
Balance as of end of period at Dec. 31, 2020 | $ 1,698,214 | $ 240,367 | 492,890 | (43,272) | 11,649 | 996,580 | |
Balance as of beginning of period (in shares) at Sep. 30, 2021 | 95,709,662 | 95,710,000 | |||||
Balance as of beginning of period at Sep. 30, 2021 | $ 1,630,862 | $ 240,644 | 502,584 | (34,528) | (12,448) | 934,610 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 111,312 | 111,312 | |||||
Other comprehensive income | 1,030 | 1,030 | |||||
Common stock issued: | |||||||
Incentive compensation plan (in shares) | 147,000 | ||||||
Incentive compensation plan | 7,502 | $ 367 | 7,135 | ||||
Dividend reinvestment plan (in shares) | 105,000 | ||||||
Dividend reinvestment plan | 3,678 | $ 263 | 3,415 | ||||
Cash dividend declared | (34,787) | (34,787) | |||||
Treasury stock and other (in shares) | 0 | ||||||
Treasury stock and other | $ (2,619) | (2,619) | |||||
Balance as of end of period (in shares) at Dec. 31, 2021 | 95,961,710 | 95,962,000 | |||||
Balance as of end of period at Dec. 31, 2021 | $ 1,716,978 | $ 241,274 | $ 513,134 | $ (33,498) | $ (15,067) | $ 1,011,135 | |
[1] | Shares sold through the DRP issued from treasury stock at average cost, which may differ from the actual market price paid. |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF COMMON STOCK EQUITY (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividend declared per share (usd per share) | $ 0.3625 | $ 0.3325 |
NATURE OF THE BUSINESS
NATURE OF THE BUSINESS | 3 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF THE BUSINESS | 1. NATURE OF THE BUSINESS The Company provides regulated natural gas distribution services, transmission and storage services and operates certain unregulated businesses primarily through the following: NJNG provides natural gas utility service to approximately 566,600 customers throughout Burlington, Middlesex, Monmouth, Morris, Ocean and Sussex counties in New Jersey and is subject to rate regulation by the BPU. NJNG comprises the Natural Gas Distribution segment. NJRCEV, the Company's clean energy subsidiary, comprises the Clean Energy Ventures segment and invests in, owns and operates clean energy projects, including commercial and residential solar installations located in New Jersey, Connecticut, Rhode Island and New York. NJRES comprises the Energy Services segment. Energy Services maintains and transacts around a portfolio of natural gas transportation and storage capacity contracts and provides physical wholesale energy, retail energy and energy management services in the U.S. and Canada. NJR Midstream Holdings Corporation, which comprises the Storage and Transportation segment, invests in energy-related ventures through its subsidiaries. The Company operates natural gas storage and transmission assets through the wholly-owned subsidiaries of Leaf River and Adelphia Gateway, and is subject to rate regulation by FERC. The Company holds a 50 percent combined ownership interest in Steckman Ridge, located in Pennsylvania and 20 percent ownership interest in PennEast, which are accounted for under the equity method of accounting. NJR Retail Holdings Corporation has two principal subsidiaries, NJRHS, which provides heating, central air conditioning, standby generators, solar and other indoor and outdoor comfort products to residential homes throughout New Jersey, and CR&R, which owns commercial real estate. NJRHS and CR&R are included in Home Services and Other operations. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared by the Company in accordance with the rules and regulations of the SEC and GAAP. The September 30, 2021 Balance Sheet data is derived from the audited financial statements of the Company. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's 2021 Annual Report on Form 10-K. The Unaudited Condensed Consolidated Financial Statements include the accounts of NJR and its subsidiaries. In the opinion of management, the accompanying Unaudited Condensed Consolidated Financial Statements reflect all adjustments necessary for a fair presentation of the results of the interim periods presented. These adjustments are of a normal and recurring nature. Because of the seasonal nature of the Company's utility and wholesale energy services operations, in addition to other factors, the financial results for the interim periods presented are not indicative of the results that are to be expected for the fiscal year ending September 30, 2022. Intercompany transactions and accounts have been eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company to make estimates that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingencies during the reporting period. On a quarterly basis or more frequently whenever events or changes in circumstances indicate a need, the Company evaluates its estimates, including those related to the calculation of the fair value of derivative instruments, debt, equity method investments, unbilled revenues, allowance for doubtful accounts, provisions for depreciation and amortization, long-lived assets, regulatory assets and liabilities, income taxes, pensions and other postemployment benefits, contingencies related to environmental matters and litigation. Asset retirement obligations are evaluated as often as needed. The Company’s estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The Company has legal, regulatory and environmental proceedings during the normal course of business that can result in loss contingencies. When evaluating the potential for a loss, the Company will establish a reserve if a loss is probable and can be reasonably estimated, in which case it is the Company’s policy to accrue the full amount of such estimates. Where the information is sufficient only to establish a range of probable liability, and no point within the range is more likely than any other, it is the Company’s policy to accrue the lower end of the range. In the normal course of business, estimated amounts are subsequently adjusted to actual results that may differ from estimates. In March 2020, COVID-19 was declared a pandemic by the World Health Organization and the Centers for Disease Control and Prevention and has spread globally, including throughout the U.S. The Company’s Unaudited Condensed Consolidated Financial Statements reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities at the balance sheet date and reported amounts of revenue and expenses during the reporting periods presented. The Company continues to closely monitor developments related to the COVID-19 pandemic and has, when appropriate, taken steps to ensure business continuity in the safe operation of its business. These steps include working from home for office-based employees, limiting direct contact with customers and suspending late payment fees for utility customers. While the Company and many businesses are beginning to return to normal operating practices, this remains an evolving situation. The timing for recovery of businesses and local economies, resurgences or mutations of the virus, and any potential future shutdowns remains unknown. Both the Company and NJNG continue to have sufficient liquidity to meet their current obligations and business operations remain fundamentally unchanged at this time. The Company will continue to monitor developments affecting its employees, customers, and operations and take additional steps to address the COVID-19 pandemic and its impacts, as necessary. The Company considered the impacts of COVID-19 on the assumptions and estimates used and determined that there have been no material adverse impacts on the Company’s results of operations as of December 31, 2021. Revenues Revenues from the sale of natural gas to NJNG customers are recognized in the period that natural gas is delivered and consumed by customers, including an estimate for unbilled revenue. NJNG records unbilled revenue for natural gas services. Natural gas sales to individual customers are based on meter readings, which are performed on a systematic basis throughout the month. At the end of each month, the amount of natural gas delivered to each customer after the last meter reading through the end of the respective accounting period is estimated, and recognizes unbilled revenues related to these amounts. The unbilled revenue estimates are based on estimated customer usage by customer type, weather effects, unaccounted-for natural gas and the most current tariff rates. Clean Energy Ventures recognizes revenue when SRECs are transferred to counterparties. SRECs are physically delivered through the transfer of certificates as per contractual settlement schedules. The Clean Energy Act of 2018 established guidelines for the closure of the SREC registration program to new applicants in New Jersey. The SREC program officially closed to new qualified solar projects on April 30, 2020. In December 2019, the BPU established the TREC as the successor to the SREC program. TRECs provide a fixed compensation base multiplied by an assigned project factor in order to determine their value. The project factor is determined by the type and location of the project, as defined. All TRECs generated are required to be purchased monthly by a TREC program administrator as appointed by the BPU. In June 2020, Clean Energy Ventures began generating TRECs for qualified new residential and commercial solar projects placed into service following the close of the SREC program. TREC revenue is recognized when TRECs are generated and are transferred monthly based upon metered solar electricity activity. Revenues for Energy Services are recognized when the natural gas is physically delivered to the customer. In addition, changes in the fair value of derivatives that economically hedge the forecasted sales of the natural gas are recognized in operating revenues as they occur, as noted above. Energy Services also recognizes changes in the fair value of SREC derivative contracts as a component of operating revenues. During December 2020, Energy Services entered into a series of AMAs with an investment grade public utility to release pipeline capacity associated with certain natural gas transportation contracts, which commenced on November 1, 2021. The AMAs include a series of temporary and permanent releases and revenue under these agreements is recognized as the performance obligations are satisfied. For temporary releases of pipeline capacity, revenue is recognized on a straight-line basis over the agreed upon term. For permanent releases of pipeline capacity, which represent a transfer of contractual rights for such capacity, revenue is recognized upon the transfer of the underlying contractual rights. During the three months ended December 31, 2021, Energy Services recognized $22.1 million of operating revenue on the Unaudited Condensed Consolidated Statements of Operations. Amounts received in excess of revenue totaling $64.7 million are included in deferred revenue on the Unaudited Condensed Consolidated Balance Sheets. The Storage and Transportation segment generates revenues from firm storage contracts and transportation contracts, related usage fees and hub services for the use of storage space, injections and withdrawals from their natural gas storage facility and the delivery of natural gas to customers. Demand fees are recognized as revenue over the term of the related agreement while usage fees and hub services revenues are recognized as services are performed. Revenues from all other activities are recorded in the period during which products or services are delivered and accepted by customers, or over the related contractual term. See Note 3. Revenue for further information. Cash and Cash Equivalents Cash and cash equivalents consist of cash on deposit and temporary investments with maturities of three months or less, and excludes restricted cash related to irrevocable letters of credit at Leaf River and escrow balances for utility plant projects at NJNG, which are recorded in other noncurrent assets on the Unaudited Condensed Consolidated Balance Sheets, respectively. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported in the Unaudited Condensed Consolidated Balance Sheets to the total amounts in the Unaudited Condensed Consolidated Statements of Cash Flows as follows: (Thousands) December 31, 2021 September 30, December 31, Balance Sheet Cash and cash equivalents $ 1,259 $ 4,749 $ 22,358 Restricted cash in other noncurrent assets $ 1,294 $ 1,294 $ 2,431 Statements of Cash Flow Cash, cash equivalents and restricted cash $ 2,553 $ 6,043 $ 24,789 Allowance for Doubtful Accounts The Company segregates financial assets, primarily trade receivables and unbilled revenues due in one year or less, into portfolio segments based on shared risk characteristics, such as geographical location and regulatory environment, for evaluation of expected credit losses. Historical and current information, such as average write-offs, are applied to each portfolio segment to estimate the allowance for losses on uncollectible receivables. Additionally, the allowance for losses on uncollectible receivables is adjusted for reasonable and supportable forecasts of future economic conditions, which can include changing weather, commodity prices, regulations, and macroeconomic factors, such as unemployment rates among others, including the estimated impact of the ongoing pandemic on the outstanding balances. In December 2021, the Company deferred a portion of costs incurred related to bad debt for NJNG associated with customer accounts receivable as a regulatory asset resulting from the impacts of the ongoing COVID-19 pandemic. See Note 4. Regulation for additional information. Loans Receivable NJNG currently provides loans, with terms ranging from two Natural Gas in Storage The following table summarizes natural gas in storage, at average cost by segment as of: December 31, 2021 September 30, 2021 ($ in thousands) Natural Gas in Storage Bcf Natural Gas in Storage Bcf Natural Gas Distribution $ 110,673 22.7 $ 115,824 27.6 Energy Services 132,019 28.9 77,782 18.8 Total $ 242,692 51.6 $ 193,606 46.4 Software Costs The Company capitalizes certain costs, such as software design and configuration, coding, testing and installation, that are incurred to purchase or create and implement computer software for internal use. Capitalized costs include external costs of materials and services utilized in developing or obtaining internal-use software and payroll and payroll-related costs for employees who are directly associated with and devote time to the internal-use software project. Maintenance costs are expensed as incurred. Upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. Amortization is recorded on the straight-line basis over the estimated useful lives. The following tables present the software costs included in the Unaudited Condensed Consolidated Financial Statements: (Thousands) December 31, 2021 September 30, Balance Sheets Utility plant, at cost $ 16,777 $ 16,543 Construction work in progress $ 11,725 $ 7,801 Nonutility plant and equipment, at cost $ 341 $ 338 Construction work in progress $ 1 $ 8 Accumulated depreciation and amortization, utility plant $ (1,644) $ (1,333) Accumulated depreciation and amortization, nonutility plant and equipment $ (16) $ (29) Software costs $ 5,464 $ 5,582 Three Months Ended December 31, Statements of Operations 2021 2020 Operation and maintenance (1) $ 2,523 $ 1,924 Depreciation and amortization $ 299 $ 253 (1) During the three months ended December 31, 2021 and 2020, approximately $113,000 and $77,000, respectively, was amortized from software costs into O&M. Sale Leasebacks NJNG utilizes sale leaseback arrangements as a financing mechanism to fund certain of its capital expenditures related to natural gas meters, whereby the physical asset is sold concurrent with an agreement to lease the asset back. These agreements include options to renew the lease or repurchase the asset at the end of the term. Proceeds from sale leaseback transactions are accounted for as financing arrangements and are included in long-term debt on the Unaudited Condensed Consolidated Balance Sheets. NJNG received $17.3 million during the three months ended December 31, 2021, in connection with the sale leaseback of its natural gas meters. There were no natural gas meter sale leasebacks recorded during the three months ended December 31, 2020. In addition, for certain of its commercial solar energy projects, the Company enters into lease agreements that provide for the sale of commercial solar energy assets to third parties and the concurrent leaseback of the assets. For sale leaseback transactions where the Company has concluded that the arrangement does not qualify as a sale as the Company retains control of the underlying assets and, as such, the Company uses the financing method to account for the transaction. Under the financing method, the Company recognizes the proceeds received from the buyer-lessor that constitute a payment to acquire the solar energy asset as a financing arrangement, which is recorded as a component of debt on the Unaudited Condensed Consolidated Balance Sheets. The Company continues to operate the solar assets and is responsible for related expenses and entitled to retain the revenue generated from RECs and energy sales. The ITCs and other tax benefits associated with these solar projects transfer to the buyer; however, the payments are structured so that Clean Energy Ventures is compensated for the transfer of the related tax attributes. Accordingly, Clean Energy Ventures recognizes the equivalent value of the tax attributes in other income on the Unaudited Condensed Consolidated Statements of Operations over the respective five-year ITC recapture periods, starting with the second year of the lease. During the three months ended December 31, 2021 and 2020, Clean Energy Ventures received proceeds of $3.3 million and $12.1 million, respectively, in connection with the sale leaseback of commercial solar projects. The proceeds received were recognized as a financing obligation on the Unaudited Condensed Consolidated Balance Sheets. Accumulated Other Comprehensive (Loss) Income The following table presents the changes in the components of accumulated other comprehensive (loss) income, net of related tax effects during the three months ended December 31, 2021 and 2020: (Thousands) Cash Flow Hedges Postemployment Benefit Obligation Total Balance at September 30, 2021 $ (9,376) $ (25,152) $ (34,528) Other comprehensive income, net of tax Amounts reclassified from accumulated other comprehensive loss, net of tax of $(79), $(233), $(312), respectively 264 766 (1) 1,030 Balance at December 31, 2021 $ (9,112) $ (24,386) $ (33,498) Balance at September 30, 2020 $ (10,397) $ (33,918) $ (44,315) Other comprehensive income, net of tax Amounts reclassified from accumulated other comprehensive loss, net of tax of $(112), $(245) and $(357) 231 812 (1) 1,043 Balance at December 31, 2020 $ (10,166) $ (33,106) $ (43,272) (1) Included in the computation of net periodic pension cost, a component of operations and maintenance expense on the Unaudited Condensed Consolidated Statements of Operations. Reclassification Certain prior period amounts related to deferred revenue within current liabilities on the Unaudited Condensed Consolidated Balance Sheets and Unaudited Consolidated Condensed Statements of Cash Flows have been reclassified to conform to the current period presentation. Recently Adopted Updates to the Accounting Standards Codification Income Taxes In December 2019, the FASB issued ASU No. 2019-12, an amendment to ASC 740, Income Taxes , which simplifies the accounting for income taxes and changes the accounting for certain income tax transactions, among other minor improvements. The Company adopted this guidance on October 1, 2021, and applied it on a prospective basis. The amendments in this update were either not applicable, currently applied, or did not have a material impact on the Company's financial position, results of operations, cash flows or disclosures. Investments - Equity Securities, Investments - Equity Method and Joint Ventures and Derivatives and Hedging In January 2020, the FASB issued ASU No. 2020-01, an amendment to ASC 321, Investments - Equity Securities, ASC 323 , Investments - Equity Method and Joint Ventures, and ASC 815 , Derivatives and Hedging, which clarifies the interactions between the three ASU topics. The update requires an entity to evaluate observable transactions that necessitate applying or discontinuing the equity method of accounting when applying the measurement alternative in Topic 321. This evaluation occurs prior to applying or upon ceasing the equity method. The update also states that when applying paragraph 815-10-15-141(a) for forward contracts and purchased options, an entity is not required to assess whether the underlying securities will be accounted for under the equity method in accordance with Topic 323 or fair value method under Topic 825 upon settlement or exercise. The Company adopted this guidance on October 1, 2021, and applied it on a prospective basis. There was no material impact on the Company's financial position, results of operations, cash flows or disclosures. Other In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements , which clarifies application of various provisions in the ASC by amending and adding new headings, cross referencing to other guidance, and refining or correcting terminology. It also improves the consistency by amending the ASC to include all disclosure guidance in the appropriate section. The Company adopted this guidance on October 1, 2021, and applied it on a prospective basis. There was no material impact on the Company's financial position, results of operations, cash flows or disclosures. Other Recent Updates to the Accounting Standards Codification Debt and Other In August 2020, the FASB issued ASU No. 2020-06, an amendment to ASC 470, Debt , and ASC 815, Derivatives and Hedging , which changes the accounting for convertible instruments by reducing the number of acceptable accounting models to three models including, the embedded derivative, substantial premium, and traditional no proceeds allocated models. The guidance is effective for the Company beginning October 1, 2022, and the Company can elect to apply it on either a modified or a full retrospective basis. The Company does not currently have convertible debt instruments and thus does not expect the amendments to have an impact on its financial position, results of operations, cash flows and disclosures upon adoption. In May 2021, the FASB issued ASU No. 2021-04, an amendment to ASC 470, Debt , ASC 260, Earnings per Share , ASC 718, Stock Compensation , and ASC 815, Derivatives and Hedging. The update impacts equity-classified written call options that remain equity-classified after a modification or exchange. The guidance is effective for the Company beginning October 1, 2022, and will be applied on a prospective basis. The Company does not currently have equity-classified written call options and thus does not expect the amendments to have an impact on its financial position, results of operations, cash flows and disclosures upon adoption. Leases In July 2021, the FASB issued ASU No. 2021-05, an amendment to ASC 842, Leases , which requires a lessor to classify a lease with entirely or partially variable payments that do not depend on an index or rate as an operating lease if another classification, including sales-type or direct financing would trigger a loss at the lease commencement date. The guidance is effective for the Company beginning October 1, 2022, and the Company can elect to apply it either on a retrospective basis to leases that have commenced or have been modified under ASC 842 or on a prospective basis. The Company is currently evaluating the amendments to understand the impact on its financial position, results of operations, cash flows and disclosures upon adoption. Business Combinations In October 2021, the FASB issued ASU No. 2021-08, an amendment to ASC 805, Business Combinations , which requires that an acquirer recognize, and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers . The guidance is effective for the Company beginning October 1, 2023, and will be applied on a prospective basis to new acquisitions following the date of adoption. The Company is currently evaluating the amendments to understand the impact on its financial position, results of operations, cash flows and disclosures upon adoption. |
REVENUE
REVENUE | 3 Months Ended |
Dec. 31, 2021 | |
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, the Company does 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 natural 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 electricity Clean Energy Ventures operates wholly-owned solar 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. Clean Energy Ventures Transition renewable energy certificates Clean Energy Ventures generates TRECs, which are created for every MWh of electricity produced by a solar generator. The performance obligation of Clean Energy Ventures is to generate electricity and TRECs, which are purchased monthly by a REC Administrator. Revenue is recognized upon generation. Energy Services 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 in line with the terms of the contract and based on the services provided. Payment is due upon receipt of the invoice. For temporary releases of pipeline capacity, revenue is recognized on a straight-line basis over the agreed upon term. Storage and Transportation Natural gas services The performance obligation of the Storage and Transportation segment is to provide the customer with storage and transportation services. The Storage and Transportation segment generates revenues from firm storage contracts and transportation contracts, injection and withdrawal at the storage facility and the delivery of natural gas to customers. Revenue is recognized over time as customers receive the benefits of its service as it is performed on their behalf using an output method based on actual deliveries. Demand fees are recognized as revenue over the term of the related agreement. 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: Energy Services Natural gas services For a permanent release of pipeline capacity, the performance obligation of NJRES is the release of the pipeline capacity associated with certain natural gas transportation contracts and the transfer of the underlying contractual rights to the counterparty. Revenue is recognized upon the transfer of the underlying contractual rights. Storage and Transportation Natural gas services The performance obligation of the Storage and Transportation segment is to provide the customer with storage and transportation services. The Storage and Transportation segment generates revenues from usage fees and hub services for the use of storage space, injection and withdrawal from the storage facility. Hub services include park and loan transactions and wheeling. Usage fees and hub services revenues are recognized as services are performed. 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 recognized 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, 2021 and 2020, are as follows: (Thousands) Natural Gas Distribution Clean Energy Ventures Energy Services Storage and Transportation Home Services Total 2021 Natural gas utility sales (1) $ 223,796 — — — — $ 223,796 Natural gas services — — 27,879 12,143 — 40,022 Service contracts — — — — 8,467 8,467 Installations and maintenance — — — — 5,484 5,484 Renewable energy certificates — 846 — — — 846 Electricity sales — 6,470 — — — 6,470 Eliminations (2 (337) — — (559) (99) (995) Revenues from contracts with customers 223,459 7,316 27,879 11,584 13,852 284,090 Alternative revenue programs (3) 10,654 — — — — 10,654 Derivative instruments 40,322 2,867 (4) 341,365 — — 384,554 Eliminations (2) — — (3,456) — — (3,456) Revenues out of scope 50,976 2,867 337,909 — — 391,752 Total operating revenues $ 274,435 10,183 365,788 11,584 13,852 $ 675,842 2020 Natural gas utility sales $ 189,364 — — — — $ 189,364 Natural gas services — — 6,428 13,104 — 19,532 Service contracts — — — — 8,259 8,259 Installations and maintenance — — — — 4,318 4,318 Renewable energy certificates — 690 — — — 690 Electricity sales — 4,388 — — — 4,388 Eliminations (1) — — — (657) (167) (824) Revenues from contracts with customers 189,364 5,078 6,428 12,447 12,410 225,727 Alternative revenue programs (3) 1,568 — — — — 1,568 Derivative instruments 4,797 1,292 (4) 223,049 — — 229,138 Eliminations (2) — — (2,128) — — (2,128) Revenues out of scope 6,365 1,292 220,921 — — 228,578 Total operating revenues $ 195,729 6,370 227,349 12,447 12,410 $ 454,305 (1) Includes building rent related to the Wall headquarters, which is eliminated in consolidation. (2) Consists of transactions between subsidiaries that are eliminated in consolidation. (3) Includes CIP revenue. (4) Includes SREC revenue. Disaggregated revenues from contracts with customers by customer type and by reporting segment and other business operations during the three months ended December 31, 2021 and 2020, are as follows: (Thousands) Natural Gas Distribution Clean Energy Ventures Energy Services Storage and Transportation Home Services Total 2021 Residential $ 151,308 2,972 — — 13,775 $ 168,055 Commercial and industrial 47,184 4,344 27,879 11,584 77 91,068 Firm transportation 22,675 — — — — 22,675 Interruptible and off-tariff 2,292 — — — — 2,292 Revenues out of scope 50,976 2,867 337,909 — — 391,752 Total operating revenues $ 274,435 10,183 365,788 11,584 13,852 $ 675,842 2020 Residential $ 137,224 2,722 — — 12,204 $ 152,150 Commercial and industrial 29,229 2,356 6,428 12,447 206 50,666 Firm transportation 21,104 — — — — 21,104 Interruptible and off-tariff 1,807 — — — — 1,807 Revenues out of scope 6,365 1,292 220,921 — — 228,578 Total operating revenues $ 195,729 6,370 227,349 12,447 12,410 $ 454,305 Customer Accounts Receivable/Credit Balances and Deposits The timing of revenue recognition, customer billings and cash collections resulting 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, 2021 and 2020, are as follows: Customer Accounts Receivable Customers' Credit (Thousands) Billed Unbilled Balances and Deposits Balance as of September 30, 2021 $ 212,838 $ 10,351 $ 32,586 Increase 53,977 62,598 6,080 Balance as of December 31, 2021 $ 266,815 $ 72,949 $ 38,666 Balance as of September 30, 2020 $ 134,173 $ 9,226 $ 25,934 Increase 63,468 44,568 7,014 Balance as of December 31, 2020 $ 197,641 $ 53,794 $ 32,948 The following table provides information about receivables, 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, 2021 and September 30, 2021: (Thousands) Natural Gas Distribution Clean Energy Ventures Energy Services Storage and Transportation Home Services Total December 31, 2021 Customer accounts receivable Billed $ 102,890 4,608 153,014 4,339 1,964 $ 266,815 Unbilled 71,542 1,407 — — — 72,949 Customers' credit balances and deposits (38,666) — — — — (38,666) Total $ 135,766 6,015 153,014 4,339 1,964 $ 301,098 September 30, 2021 Customer accounts receivable Billed $ 54,514 5,534 147,087 3,956 1,747 $ 212,838 Unbilled 8,427 1,924 — — — 10,351 Customers' credit balances and deposits (32,586) — — — — (32,586) Total $ 30,355 7,458 147,087 3,956 1,747 $ 190,603 |
REGULATION
REGULATION | 3 Months Ended |
Dec. 31, 2021 | |
Regulated Operations [Abstract] | |
REGULATION | 4. REGULATION NJNG is subject to cost-based regulation, therefore, it is permitted to recover authorized operating expenses and earn a reasonable return on its utility capital investments based on the BPU's approval. The impact of the ratemaking process and decisions authorized by the BPU allows NJNG to capitalize or defer certain costs that are expected to be recovered from its customers as regulatory assets and to recognize certain obligations representing amounts that are probable future expenditures as regulatory liabilities in accordance with accounting guidance applicable to regulated operations. NJNG's recovery of costs is facilitated through its base rates, BGSS and other regulatory tariff riders. NJNG is required to make filings to the BPU for review of its BGSS, CIP and other programs and related rates. Annual rate changes are typically requested to be effective at the beginning of the following fiscal year. The current base rates include a weighted average cost of capital of 6.84 percent and a return on common equity of 9.6 percent. All rate and program changes are subject to proper notification and BPU review and approval. In addition, NJNG is permitted to implement certain BGSS rate changes on a provisional basis with proper notification to the BPU. Regulatory assets and liabilities included on the Unaudited Condensed Consolidated Balance Sheets for NJNG are comprised of the following: (Thousands) December 31, 2021 September 30, Regulatory assets-current New Jersey Clean Energy Program $ 14,416 $ 16,308 Conservation Incentive Program 22,493 11,839 Other current regulatory assets 1,371 1,554 Total current regulatory assets $ 38,280 $ 29,701 Regulatory assets-noncurrent Environmental remediation costs: Expended, net of recoveries $ 64,662 $ 58,483 Liability for future expenditures 126,881 135,012 Deferred income taxes 39,613 39,694 SAVEGREEN 37,342 32,941 Postemployment and other benefit costs 114,515 117,194 Deferred storm damage costs 3,800 4,343 Cost of removal 99,160 99,238 Other noncurrent regulatory assets 38,685 32,695 Total noncurrent regulatory assets $ 524,658 $ 519,600 Regulatory liability-current Overrecovered natural gas costs $ 11,659 $ 5,510 Derivatives at fair value, net 7,340 22,497 Total current regulatory liabilities $ 18,999 $ 28,007 Regulatory liabilities-noncurrent Tax Act impact (1) $ 189,131 $ 190,386 Derivatives at fair value, net — 1,166 Other noncurrent regulatory liabilities 688 336 Total noncurrent regulatory liabilities $ 189,819 $ 191,888 (1) Reflects the re-measurement and subsequent amortization of NJNG's net deferred tax liabilities as a result of the change in federal tax rates enacted in the Tax Act. At December 31, 2021, other noncurrent regulatory assets include deferred pandemic costs of $10.7 million primarily related to a portion of bad debt associated with customer accounts receivable resulting from the impacts of the ongoing COVID-19 pandemic. These costs are eligible for future regulatory recovery. Regulatory assets and liabilities included on the Unaudited Condensed Consolidated Balance Sheets for Adelphia Gateway are comprised of the following: (Thousands) December 31, 2021 September 30, Total current regulatory assets $ 373 $ 417 Total noncurrent regulatory assets $ 3,416 $ 2,499 Total noncurrent regulatory liabilities $ 895 $ 1,163 The assets are comprised primarily of the tax benefit associated with the equity component of AFUDC and the liability consists primarily of scheduling penalties. Recovery of regulatory assets is subject to FERC approval. Regulatory filings and/or actions that occurred during the current fiscal year include the following: • On November 17, 2021, the BPU issued an order adopting a stipulation of settlement approving a $79.0 million increase to base rates, effective December 1, 2021. In addition, the order also included approval for the final increase for the NJ RISE/SAFE II programs, which totaled $269,000. The increase includes an overall rate of return on rate base of 6.84 percent, return on common equity of 9.6 percent, a common equity ratio of 54.0 percent and a depreciation rate of 2.78 percent. • On November 17, 2021, the BPU approved a $2.9 million increase to the annual revenues credited to BGSS, a $13.0 million annual increase related to its balancing charge, as well as changes to CIP rates, which will result in a $6.3 million decrease to the annual recovery, effective December 1, 2021. • On November 19, 2021, NJNG submitted notification of its intent to self-implement an increase to its BGSS rate which will result in an approximately $24.2 million increase to annual revenues credited to BGSS, effective December 1, 2021. • On January 26, 2022, the BPU approved a stipulation to resolve the current EE annual cost recovery filing, which will increase annual recoveries by $2.2 million, effective February 1, 2022. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 3 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | 5. DERIVATIVE INSTRUMENTS The Company is subject primarily to commodity price risk due to fluctuations in the market price of natural gas, SRECs and electricity. To manage this risk, the Company enters into a variety of derivative instruments including, but not limited to, futures contracts, physical forward contracts, financial options and swaps to economically hedge the commodity price risk associated with its existing and anticipated commitments to purchase and sell natural gas, SRECs and electricity. In addition, the Company is exposed to foreign currency and interest rate risk and may utilize foreign currency derivatives to hedge Canadian dollar denominated natural gas purchases and/or sales and interest rate derivatives to reduce exposure to fluctuations in interest rates. All of these types of contracts are accounted for as derivatives, unless the Company elects NPNS, which is done on a contract-by-contract election. Accordingly, all of the financial and certain of the Company's physical derivative instruments are recorded at fair value on the Unaudited Condensed Consolidated Balance Sheets. For a more detailed discussion of the Company’s fair value measurement policies and level disclosures associated with the Company’s derivative instruments, see Note 6. Fair Value . Energy Services Energy Services chooses not to designate its financial commodity and physical forward commodity derivatives as accounting hedges or to elect NPNS. The changes in the fair value of these derivatives are recorded as a component of natural gas purchases or operating revenues, as appropriate for Energy Services, on the Unaudited Condensed Consolidated Statements of Operations as unrealized gains or losses. For Energy Services at settlement, realized gains and losses on all financial derivative instruments are recognized as a component of natural gas purchases and realized gains and losses on all physical derivatives follow the presentation of the related unrealized gains and losses as a component of either natural gas purchases or operating revenues. Energy Services also enters into natural gas transactions in Canada and, consequently, is exposed to fluctuations in the value of Canadian currency relative to the U.S. dollar. Energy Services may utilize foreign currency derivatives to lock in the exchange rates associated with natural gas transactions denominated in Canadian currency. The derivatives may include currency forwards, futures, or swaps and are accounted for as derivatives. These derivatives are typically used to hedge demand fee payments on pipeline capacity, storage and natural gas purchase agreements. As a result of Energy Services entering into transactions to borrow natural gas, commonly referred to as “park and loans,” an embedded derivative is recognized relating to differences between the fair value of the amount borrowed and the fair value of the amount that will ultimately be repaid, based on changes in the forward price for natural gas prices at the borrowed location over the contract term. This embedded derivative is accounted for as a forward sale in the month in which the repayment of the borrowed natural gas is expected to occur, and is considered a derivative transaction that is recorded at fair value on the Unaudited Condensed Consolidated Balance Sheets, with changes in value recognized in current period earnings. Expected production of SRECs is hedged through the use of forward and futures contracts. All contracts require the Company to physically deliver SRECs through the transfer of certificates as per contractual settlement schedules. Energy Services recognizes changes in the fair value of these derivatives as a component of operating revenues. Upon settlement of the contract, the related revenue is recognized when the SREC is transferred to the counterparty. Natural Gas Distribution Changes in fair value of NJNG's financial commodity derivatives are recorded as a component of regulatory assets or liabilities on the Unaudited Condensed Consolidated Balance Sheets. The Company elects NPNS accounting treatment on all physical commodity contracts that NJNG entered into on or before December 31, 2015, and accounts for these contracts on an accrual basis. Accordingly, physical natural gas purchases are recognized in regulatory assets or liabilities on the Unaudited Condensed Consolidated Balance Sheets when the contract settles and the natural gas is delivered. The average cost of natural gas is charged to expense in the current period earnings based on the BGSS factor times the therm sales. Effective for contracts executed on or after January 1, 2016, NJNG no longer elects NPNS accounting treatment on a portfolio basis. However, since NPNS is a contract-by-contract election, where it makes sense to do so, NJNG can and may elect to treat certain contracts as normal. Because NJNG recovers these amounts through future BGSS rates as increases or decreases to the cost of natural gas in NJNG’s tariff for natural gas service, the changes in fair value of these contracts are deferred as a component of regulatory assets or liabilities on the Unaudited Condensed Consolidated Balance Sheets. Clean Energy Ventures The Company elects NPNS accounting treatment on PPA contracts executed by Clean Energy Ventures that meet the definition of a derivative and accounts for the contract on an accrual basis. Accordingly, electricity sales are recognized in revenues throughout the term of the PPA as electricity is delivered. NPNS is a contract-by-contract election and where it makes sense to do so, the Company can and may elect to treat certain contracts as normal. Fair Value of Derivatives The following table presents the fair value of the Company's derivative assets and liabilities recognized on the Unaudited Condensed Consolidated Balance Sheets as of: Derivatives at Fair Value December 31, 2021 September 30, 2021 (Thousands) Balance Sheet Location Assets Liabilities Assets Liabilities Derivatives not designated as hedging instruments: Natural Gas Distribution: Physical commodity contracts Derivatives - current $ 234 $ 4 $ 36 $ 16 Financial commodity contracts Derivatives - current 5,032 240 2,046 13 Energy Services: Physical commodity contracts Derivatives - current 2,285 18,592 2,818 24,592 Derivatives - noncurrent 135 15,261 333 13,237 Financial commodity contracts Derivatives - current 32,164 11,209 30,226 62,521 Derivatives - noncurrent 1,843 — 3,068 260 Foreign currency contracts Derivatives - current 68 4 125 3 Derivatives - noncurrent — — 2 — Total fair value of derivatives $ 41,761 $ 45,310 $ 38,654 $ 100,642 Offsetting of Derivatives The Company transacts under master netting arrangements or equivalent agreements that allow it to offset derivative assets and liabilities with the same counterparty. However, the Company’s policy is to present its derivative assets and liabilities on a gross basis at the contract level unit of account on the Unaudited Condensed Consolidated Balance Sheets. 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, 2021: Derivative assets: Energy Services Physical commodity contracts $ 2,420 $ (908) $ (200) $ 1,312 Financial commodity contracts 34,007 (9,247) — 24,760 Foreign currency contracts 68 (4) — 64 Total Energy Services $ 36,495 $ (10,159) $ (200) $ 26,136 Natural Gas Distribution Physical commodity contracts $ 234 $ — $ — $ 234 Financial commodity contracts 5,032 (240) — 4,792 Total Natural Gas Distribution $ 5,266 $ (240) $ — $ 5,026 Derivative liabilities: Energy Services Physical commodity contracts $ 33,853 $ (908) $ — $ 32,945 Financial commodity contracts 11,209 (9,247) — 1,962 Foreign currency contracts 4 (4) — — Total Energy Services $ 45,066 $ (10,159) $ — $ 34,907 Natural Gas Distribution Physical commodity contracts $ 4 $ — $ — $ 4 Financial commodity contracts 240 (240) — — Total Natural Gas Distribution $ 244 $ (240) $ — $ 4 As of September 30, 2021: Derivative assets: Energy Services Physical commodity contracts $ 3,151 $ (894) $ (700) $ 1,557 Financial commodity contracts 33,294 (33,294) 20,532 20,532 Foreign currency contracts 127 (3) 124 Total Energy Services $ 36,572 $ (34,191) $ 19,832 $ 22,213 Natural Gas Distribution Physical commodity contracts $ 36 $ (8) $ — $ 28 Financial commodity contracts 2,046 (13) — 2,033 Total Natural Gas Distribution $ 2,082 $ (21) $ — $ 2,061 Derivative liabilities: Energy Services Physical commodity contracts $ 37,829 $ (894) $ — $ 36,935 Financial commodity contracts 62,781 (33,294) — 29,487 Foreign currency contracts 3 (3) — — Total Energy Services $ 100,613 $ (34,191) $ — $ 66,422 Natural Gas Distribution Physical commodity contracts $ 16 $ (8) $ — $ 8 Financial commodity contracts 13 (13) — — Total Natural Gas Distribution $ 29 $ (21) $ — $ 8 (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. Energy Services utilizes financial derivatives to economically hedge the gross margin associated with the purchase of physical natural gas to be used for storage injection and its subsequent sale at a later date. The gains or (losses) on the financial transactions that are economic hedges of the cost of the purchased natural gas are recognized prior to the gains or (losses) on the physical transaction, which are recognized in earnings when the natural gas is delivered. Therefore, mismatches between the timing of the recognition of realized gains or (losses) on the financial derivative instruments and gains or (losses) associated with the actual sale of the natural gas that is being economically hedged along with fair value changes in derivative instruments, creates volatility in the results of Energy Services, although the Company's intended economic results relating to the entire transaction are unaffected. The following table presents the effect of derivative instruments recognized on the Unaudited Condensed Consolidated Statements of Operations for the periods set forth below: (Thousands) Location of gain (loss) recognized in income on derivatives Amount of gain (loss) recognized Three Months Ended December 31, Derivatives not designated as hedging instruments: 2021 2020 Energy Services: Physical commodity contracts Operating revenues $ 150 $ 5,252 Physical commodity contracts Natural gas purchases 1,505 (5,054) Financial commodity contracts Natural gas purchases 61,189 47,755 Foreign currency contracts Natural gas purchases — 200 Total unrealized and realized loss $ 62,844 $ 48,153 NJNG’s derivative contracts are part of the Company's risk management activities that relate to its natural gas purchases and BGSS incentive programs. At settlement, the resulting gains and/or losses are payable to or recoverable from utility customers and are deferred in regulatory assets or liabilities resulting in no impact to earnings. The following table reflects the gains (losses) associated with NJNG's derivative instruments for the periods set forth below: Three Months Ended December 31, (Thousands) 2021 2020 Natural Gas Distribution: Physical commodity contracts $ 1,696 $ 342 Financial commodity contracts (14,647) (4,272) Total unrealized and realized (loss) $ (12,951) $ (3,930) During fiscal 2020, NJR entered into treasury lock transactions to fix the benchmark treasury rate associated with debt issuances that were finalized in 2020. NJR designates its treasury lock contracts as cash flow hedges, therefore, changes in fair value of the effective portion of the hedges are recorded in OCI and upon settlement of the contracts, realized gains and (losses) are reclassified from OCI to interest expense on the Consolidated Statements of Operations. During both the three months ended December 31, 2021 and 2020, $343,000 of pre-tax loss was reclassified from OCI into income. NJNG and Energy Services had the following outstanding long (short) derivatives as of: Volume (Bcf) Transaction Type December 31, 2021 September 30, Natural Gas Distribution Futures 24.0 22.2 Physical Commodity 1.5 7.6 Energy Services Futures (22.0) (13.4) Swaps (0.2) (0.3) Physical Commodity (4.9) 0.6 Not included in the above table are Energy Services' net notional amount of foreign currency transactions of approximately $63,000 as of December 31, 2021 and $(123,000) as of September 30, 2021, respectively, and 1.4 million SRECs that were open as of both December 31, 2021 and September 30, 2021. Broker Margin Futures exchanges have contract specific margin requirements that require the posting of cash or cash equivalents relating to traded contracts. Margin requirements consist of initial margin that is posted upon the initiation of a position, maintenance margin that is usually expressed as a percent of initial margin, and variation margin that fluctuates based on the daily marked-to-market relative to maintenance margin requirements. The Company maintains separate broker margin accounts for the Natural Gas Distribution and Energy Services segments. The balances are as follows: (Thousands) Balance Sheet Location December 31, 2021 September 30, Natural Gas Distribution Restricted broker margin accounts-current assets $ 5,358 $ 2,790 Energy Services Restricted broker margin accounts-current assets $ 37,358 $ 70,050 Restricted broker margin accounts-current liabilities $ (15,475) $ — Wholesale Credit Risk NJNG, Energy Services, Clean Energy Ventures and the Storage and Transportation segment are exposed to credit risk as a result of their sales/wholesale marketing activities. As a result of the inherent volatility in the prices of natural gas commodities, derivatives, SRECs, the market value of contractual positions with individual counterparties could exceed established credit limits or collateral provided by those counterparties. If a counterparty fails to perform the obligations under its contract then the Company could sustain a loss. The Company monitors and manages the credit risk of its wholesale operations through credit policies and procedures that management believes reduce overall credit risk. These policies include a review and evaluation of current and prospective counterparties' financial statements and/or credit ratings, daily monitoring of counterparties' credit limits and exposure, daily communication with traders regarding credit status and the use of credit mitigation measures, such as collateral requirements and netting agreements. Examples of collateral include letters of credit and cash received for either prepayment or margin deposit. Collateral may be requested due to the Company's election not to extend credit or because exposure exceeds defined thresholds. Most of the Company's wholesale marketing contracts contain standard netting provisions. These contracts include those governed by ISDA and the NAESB. The netting provisions refer to payment netting, whereby receivables and payables with the same counterparty are offset and the resulting net amount is paid to the party to which it is due. Internally-rated exposure applies to counterparties that are not rated by Fitch or Moody's. In these cases, the counterparty's or guarantor's financial statements are reviewed, and similar methodologies and ratios used by Fitch and/or Moody's are applied to arrive at a substitute rating. Gross credit exposure is defined as the unrealized fair value of physical and financial derivative commodity contracts, plus any outstanding wholesale receivable for the value of natural gas delivered and/or financial derivative commodity contract that has settled for which payment has not yet been received. The following is a summary of gross credit exposures grouped by investment and noninvestment grade counterparties, as of December 31, 2021. 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 $ 185,828 Noninvestment grade 11,016 Internally rated investment grade 23,742 Internally rated noninvestment grade 30,016 Total $ 250,602 Conversely, certain of NJNG's and Energy Services' derivative instruments are linked to agreements containing provisions that would require cash collateral payments from the Company if certain events occur. These provisions vary based upon the terms in individual counterparty agreements and can result in cash payments if NJNG's credit rating were to fall below its current level. Specifically, most, but not all, of these additional payments will be triggered if NJNG's debt is downgraded by the major credit agencies, regardless of investment grade status. In addition, some of these agreements include threshold amounts that would result in additional collateral payments if the values of derivative liabilities were to exceed the maximum values provided for in relevant counterparty agreements. Other provisions include payment features that are not specifically linked to ratings but are based on certain financial metrics. |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | 6. FAIR VALUE Fair Value of Assets and Liabilities The fair value of cash and cash equivalents, accounts receivable, current loan receivables, accounts payable, commercial paper and borrowings under revolving credit facilities are estimated to equal their carrying amounts due to the short maturity of those instruments. Non-current loan receivables are recorded based on what the Company expects to receive, which approximates fair value, in other noncurrent assets on the Unaudited Condensed Consolidated Balance Sheets. The Company regularly evaluates the credit quality and collection profile of its customers to approximate fair value. The estimated fair value of long-term debt, including current maturities, excluding finance leases, debt issuance costs and solar asset financing obligations, is as follows: (Thousands) December 31, 2021 September 30, Carrying value (1) (2) (3) $ 2,202,845 $ 2,102,845 Fair market value $ 2,373,791 $ 2,288,544 (1) Excludes finance leases of $35.1 million and $20.1 million as of December 31, 2021 and September 30, 2021, respectively. (2) Excludes NJNG's debt issuance costs of $10.3 million and $9.1 million as of December 31, 2021 and September 30, 2021, respectively. (3) Excludes NJR's debt issuance costs of $3.7 million and $3.3 million as of December 31, 2021 and September 30, 2021, respectively. Clean Energy Ventures enters into transactions to sell certain commercial solar assets and lease the assets back for a term specified in the lease. These transactions are considered financing obligations for accounting purposes and are recorded within long-term debt on the Unaudited Condensed Consolidated Balance Sheets. The estimated fair value of solar asset financing obligations as of December 31, 2021 and September 30, 2021 was $131.5 million and $132.5 million, respectively. The Company utilizes a discounted cash flow method to determine the fair value of its debt. Inputs include observable municipal and corporate yields, as appropriate for the maturity of the specific issue and the Company's credit rating. As of December 31, 2021, the Company discloses its debt within Level 2 of the fair value hierarchy. Fair Value Hierarchy The Company applies fair value measurement guidance to its financial assets and liabilities, as appropriate, which include financial derivatives and physical commodity contracts qualifying as derivatives, investments in equity securities and other financial assets and liabilities. In addition, authoritative accounting literature prescribes the use of a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based on the source of the data used to develop the price inputs. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to inputs that are based on unobservable market data and include the following: Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets. The Company's Level 1 assets and liabilities include exchange traded natural gas futures and options contracts, listed equities and money market funds. Exchange traded futures and options contracts include all energy contracts traded on the NYMEX, CME and ICE that the Company refers to internally as basis swaps, fixed swaps, futures and financial options that are cleared through a FCM. Level 2 Other significant observable inputs such as interest rates or price data, including both commodity and basis pricing that is observed either directly or indirectly from publications or pricing services. The Company's Level 2 assets and liabilities include over-the-counter physical forward commodity contracts and swap contracts, SREC forward sales or derivatives that are initially valued using observable quotes and are subsequently adjusted to include time value, credit risk or estimated transport pricing components for which no basis price is available. Level 2 financial derivatives consist of transactions with non-FCM counterparties (basis swaps, fixed swaps and/or options). Inputs are verifiable and do not require significant management judgment. For some physical commodity contracts the Company utilizes transportation tariff rates that are publicly available and that it considers to be observable inputs that are equivalent to market data received from an independent source. There are no significant judgments or adjustments applied to the transportation tariff inputs and no market perspective is required. Even if the transportation tariff input were considered to be a “model,” it would still be considered to be a Level 2 input as the data is: • widely accepted and public; • non-proprietary and sourced from an independent third party; and • observable and published. These additional adjustments are generally not considered to be significant to the ultimate recognized values. Level 3 Inputs derived from a significant amount of unobservable market data. These include the Company's best estimate of fair value and are derived primarily through the use of internal valuation methodologies. Assets and liabilities measured at fair value on a recurring basis are summarized as follows: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Thousands) (Level 1) (Level 2) (Level 3) Total As of December 31, 2021: Assets: Physical commodity contracts $ — $ 2,654 $ — $ 2,654 Financial commodity contracts 39,039 — — 39,039 Financial commodity contracts - foreign exchange — 68 — 68 Money market funds 41 — — 41 Other 2,085 — — 2,085 Total assets at fair value $ 41,165 $ 2,722 $ — $ 43,887 Liabilities: Physical commodity contracts $ — $ 33,857 $ — $ 33,857 Financial commodity contracts 11,278 171 — 11,449 Financial commodity contracts - foreign exchange — 4 — 4 Total liabilities at fair value $ 11,278 $ 34,032 $ — $ 45,310 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Thousands) (Level 1) (Level 2) (Level 3) Total As of September 30, 2021: Assets: Physical commodity contracts $ — $ 3,187 $ — $ 3,187 Financial commodity contracts 35,340 — — 35,340 Financial commodity contracts - foreign exchange — 127 — 127 Money market funds 41 — — 41 Other 1,815 — — 1,815 Total assets at fair value $ 37,196 $ 3,314 $ — $ 40,510 Liabilities: Physical commodity contracts $ — $ 37,845 $ — $ 37,845 Financial commodity contracts 62,188 606 — 62,794 Financial commodity contracts - foreign exchange — 3 — 3 Total liabilities at fair value $ 62,188 $ 38,454 $ — $ 100,642 |
INVESTMENTS IN EQUITY INVESTEES
INVESTMENTS IN EQUITY INVESTEES | 3 Months Ended |
Dec. 31, 2021 | |
Investments, All Other Investments [Abstract] | |
INVESTMENTS IN EQUITY INVESTEES | 7. INVESTMENTS IN EQUITY INVESTEES The Company's investments in equity method investees include the following as of: (Thousands) December 31, 2021 September 30, Steckman Ridge (1) $ 108,770 $ 109,050 PennEast 5,479 5,479 Total $ 114,249 $ 114,529 (1) Includes loans with a total outstanding principal balance of $70.4 million for both December 31, 2021 and September 30, 2021, which accrue interest at a variable rate that resets quarterly and are due October 1, 2023. Steckman Ridge The Company holds a 50 percent equity method investment in Steckman Ridge, a jointly owned and controlled natural gas storage facility located in Bedford County, Pennsylvania. NJNG and Energy Services have entered into storage and park and loan agreements with Steckman Ridge. See Note 15. Related Party Transactions for more information on these intercompany transactions. PennEast The Company, through its subsidiary NJR Midstream Company, is a 20 percent investor in PennEast, a partnership whose purpose was to construct and operate a 120-mile natural gas pipeline that would have extended from northeast Pennsylvania to western New Jersey. During the third quarter of fiscal 2021, the PennEast partnership determined that this project is no longer supported, and all further development has ceased. The Company recognized an other-than-temporary impairment charge of $92.0 million, or approximately $74.5 million, net of income taxes, which represents the best estimate of the salvage value of the remaining assets of the project. Other-than-temporary impairments are recorded in equity in earnings (losses) of affiliates in the Unaudited Condensed Consolidated Statements of Operations. On December 16, 2021, the FERC dismissed PennEast’s pending applications. The order vacates the certificate authorization for the PennEast pipeline project in light of PennEast’s response to FERC staff’s November 23, 2021 request for a status update, in which PennEast informed the Commission it is no longer developing the project. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 8. EARNINGS PER SHARE The following table presents the calculation of the Company's basic and diluted earnings per share for: Three Months Ended December 31, (Thousands, except per share amounts) 2021 2020 Net income, as reported $ 111,312 $ 81,045 Basic earnings per share Weighted average shares of common stock outstanding-basic 95,944 96,114 Basic earnings per common share $1.16 $0.84 Diluted earnings per share Weighted average shares of common stock outstanding-basic 95,944 96,114 Incremental shares (1) 412 301 Weighted average shares of common stock outstanding-diluted 96,356 96,415 Diluted earnings per common share (2)(3) $1.16 $0.84 (1) Incremental shares consist primarily of unvested stock awards and performance shares. |
DEBT
DEBT | 3 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | 9. DEBT NJR and NJNG finance working capital requirements and capital expenditures through various short-term debt and long-term financing arrangements, including a commercial paper program and committed unsecured credit facilities. Credit Facilities A summary of NJR's credit facility and NJNG's commercial paper program and credit facility are as follows: (Thousands) December 31, 2021 September 30, Expiration Dates NJR Bank revolving credit facilities (1) $ 500,000 $ 500,000 September 2026 Notes outstanding at end of period $ 310,550 $ 219,100 Weighted average interest rate at end of period 1.13 % 1.05 % Amount available at end of period (2) $ 169,862 $ 270,312 NJNG Bank revolving credit facilities (3) $ 250,000 $ 250,000 September 2026 Commercial paper and notes outstanding at end of period $ 177,400 $ 158,200 Weighted average interest rate at end of period 0.55 % 0.17 % Amount available at end of period (4) $ 71,869 $ 91,069 (1) Committed credit facilities, which require commitment fees of 0.10 percent on the unused amounts. (2) Letters of credit outstanding total $19.6 million at December 31, 2021 and $10.6 million at September 30, 2021, which reduces the amount available by the same amount. (3) Committed credit facilities, which require commitment fees of 0.075 percent on the unused amounts. (4) Letters of credit outstanding total $731,000 at both December 31, 2021 and September 30, 2021, which reduces the amount available by the same amount. Amounts available under credit facilities are reduced by bank or commercial paper borrowings, as applicable, and any outstanding letters of credit. Neither NJNG nor the results of its operations are obligated or pledged to support the NJR credit or debt shelf facilities. Long-term Debt NJNG On October 28, 2021, NJNG entered into a Note Purchase Agreement for $100 million of its senior notes, of which $50 million were issued at an interest rate of 2.97 percent, maturing in 2051, and $50 million were issued at an interest rate of 3.07 percent, maturing in 2061. The senior notes are secured by an equal principal amount of NJNG’s FMBs issued under NJNG’s Mortgage Indenture. NJNG received $17.3 million during the three months ended December 31, 2021, in connection with the sale leaseback of its natural gas meters. NJNG records a financing lease obligation that is paid over the term of the lease and has the option to purchase the meters back at fair value upon expiration of the lease. During the three months ended December 31, 2021, NJNG exercised an early purchase option with respect to meter leases by making a final principal payment of $1.1 million. NJNG continues to evaluate this sale leaseback program based on current market conditions. Natural gas meters are excepted from the lien on NJNG property under the Mortgage Indenture. There were no natural gas meter sale leasebacks recorded during the three months ended December 31, 2020. Clean Energy Ventures Clean Energy Ventures enters into transactions to sell the commercial solar assets concurrent with agreements to lease the assets back over a period of five |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 3 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | 10. EMPLOYEE BENEFIT PLANS Pension and Other Postemployment Benefit Plans The components of the net periodic cost for pension benefits, including the Company's Pension Equalization Plan, and OPEB costs (principally health care and life insurance) for employees and covered dependents were as follows: Pension OPEB Three Months Ended Three Months Ended December 31, December 31, (Thousands) 2021 2020 2021 2020 Service cost $ 2,073 $ 2,182 $ 1,076 $ 1,211 Interest cost 2,408 2,278 1,589 1,518 Expected return on plan assets (5,319) (5,224) (1,894) (1,683) Recognized actuarial loss 2,186 2,862 1,421 1,977 Prior service cost (credit) amortization 25 25 (36) (45) Net periodic benefit cost $ 1,373 $ 2,123 $ 2,156 $ 2,978 The Company does not expect to be required to make additional contributions to fund the pension plans during fiscal 2022 based on current actuarial assumptions; however, funding requirements are uncertain and can depend significantly on changes in actuarial assumptions, returns on plan assets and changes in the demographics of eligible employees and covered dependents. In addition, as in the past, the Company may elect to make contributions in excess of the minimum required amount to the plans. There were no discretionary contributions made during the three months ended December 31, 2021 and 2020. There are no federal requirements to pre-fund OPEB benefits. However, the Company is required to fund certain amounts due to regulatory agreements with the BPU and estimates that it will contribute between $5 million and $10 million over each of the next five years. Additional contributions may be required based on market conditions and changes to assumptions. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 11. INCOME TAXES ASC Topic 740, Income Taxes requires the use of an estimated annual effective tax rate for purposes of determining the income tax provision during interim reporting periods. In calculating its estimated annual effective tax rate, the Company considers forecasted annual pre-tax income and estimated permanent book versus tax differences. Adjustments to the effective tax rate and management's estimates will occur as information and assumptions change. Changes in tax laws or tax rates are recognized in the financial reporting period that includes the enactment date, the date in which the act is signed into law. The Company evaluates its tax positions to determine the appropriate accounting and recognition of potential future obligations associated with unrecognized tax benefits. A tax benefit claimed, or expected to be claimed, on a tax return may be recognized if it is more likely than not that the position will be upheld upon examination by the applicable taxing authority. Interest and penalties related to unrecognized tax benefits, if any, are recognized within income tax expense and accrued interest, and penalties are recognized within other noncurrent liabilities on the Unaudited Condensed Consolidated Balance Sheets. Effective Tax Rate The forecasted effective tax rates were 21.6 percent and 17.6 percent, for the three months ended December 31, 2021 and 2020, respectively. To the extent there are discrete tax items that are not included in the forecasted effective tax rate, the actual effective tax rate may differ from the estimated annual effective tax rate. During the three months ended December 31, 2021 and 2020, discrete items totaled approximately $166,000 and $(76,000), respectively, related to excess tax expense (benefits) associated with the vesting of share-based awards. NJR’s actual effective tax rate was 21.7 percent and 17.7 percent during the three months ended December 31, 2021 and 2020, respectively. Other Tax Items As of December 31, 2021 and September 30, 2021, the Company has tax credit carryforwards of approximately $226.1 million and $224.2 million, respectively, which each have a life of 20 years. The Company expects to utilize this entire carryforward prior to expiration, which would begin in fiscal 2035. As of December 31, 2021 and September 30, 2021, the Company has state income tax net operating losses of approximately $461.9 million and $554.6 million, respectively. These state net operating losses have varying carry-forward periods dictated by the state in which they were incurred; these state carry-forward periods range from seven The impairment of the equity method investment in PennEast created potential net capital loss attributes totaling approximately $61.8 million, which can only be utilized to offset capital gains income, and can be carried back three years and forward five years prior to expiration. As of December 31, 2021, the Company has a valuation allowance totaling $23.7 million comprised of approximately $17.3 million related to the recognition of state net operating loss carryforwards, which primarily relate to New Jersey and approximately $6.4 million related to potential capital loss carryforwards resulting from the impairment of the equity method investment in PennEast, which the Company believes may not be fully utilized prior to expiration. As of September 30, 2021, the Company had a valuation allowance totaling $23.6 million related to the state net operating loss carryforwards and the potential capital loss carryforwards resulting from the impairment of the equity method investment, as previously discussed. The Consolidated Appropriations Act extended the 30 percent ITC for solar property that is under construction on or before December 31, 2019. Projects placed in service after December 31, 2019, may also qualify for a 30 percent federal ITC if five percent or more of the total costs of a solar property are incurred before the end of the applicable year and there are continuous efforts to advance towards completion of the project, based on the IRS guidance around ITC safe harbor determination. The credit declined to 26 percent for property under construction before the end of 2020. The Consolidated Appropriations Act, 2021 extended the 26 percent tax credit for property under construction during 2021 and 2022. The credit will drop to 22 percent for property under construction before the end of 2023. After 2023 the ITC will be reduced to 10 percent. |
LEASES
LEASES | 3 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
LEASES | 12. LEASES Lessee Accounting The Company determines if an arrangement is a lease at inception based on whether the Company has the right to control the use of an identified asset, the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset and accounts for leases in accordance with ASC 842, Leases . Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term, including payments at commencement that depend on an index or rate. Most leases in which the Company is the lessee do not have a readily determinable implicit rate, so an incremental borrowing rate, based on the information available at the lease commencement date, is utilized to determine the present value of lease payments. When a secured borrowing rate is not readily available, unsecured borrowing rates are adjusted for the effects of collateral to determine the incremental borrowing rate. The Company uses the implicit rate for agreements in which it is a lessor. The Company has not entered into any material agreements in which it is a lessor. Lease expense and lease income are recognized on a straight-line basis over the lease term for operating leases. The Company’s lease agreements primarily consist of commercial solar land leases, storage and capacity leases, equipment and real property, including land and office facilities, office equipment and the sale leaseback of its natural gas meters. Certain leases contain escalation provisions for inflation metrics. The storage leases contain a variable payment component that relates to the change in the inflation metrics that are not known past the current payment period. The variable components of these lease payments are excluded from the lease payments that are used to determine the related right-of-use lease asset and liability. The variable portion of these leases are recognized as leasing expenses when they are incurred. The capacity lease payments are fully variable and based on the amount of natural gas stored in the storage caverns. Generally, the Company’s solar land lease terms are between 20 and 50 years and may include multiple options to extend the terms for an additional five two seven The Company has lease agreements with lease and non-lease components and has elected the practical expedient to combine lease and non-lease components for certain classes of leases, such as office buildings, solar land leases and office equipment. Variable payments are not considered material to the Company. The Company’s lease agreements do not contain any material residual value guarantees, material restrictions or material covenants. There are no material lease transactions with related parties. The following table presents the Company's lease costs included in the Unaudited Condensed Consolidated Statements of Operations: Three Months Ended December 31, (Thousands) Income Statement Location 2021 2020 Operating lease cost (1) Operation and maintenance $ 2,119 $ 2,089 Finance lease cost Amortization of right-of-use assets Depreciation and amortization 396 1,246 Interest on lease liabilities Interest expense, net of capitalized interest 80 221 Total finance lease cost 476 1,467 Short-term lease cost Operation and maintenance 11 127 Variable lease cost Operation and maintenance 191 153 Total lease cost $ 2,797 $ 3,836 (1) Net of capitalized costs. The following table presents supplemental cash flow information related to leases: Three Months Ended December 31, (Thousands) 2021 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 2,037 $ 1,737 Operating cash flows for finance leases $ 170 $ 2,176 Financing cash flows for finance leases $ 2,275 $ 5,997 Assets obtained or modified for operating lease liabilities totaled approximately $808,000 and $9.3 million during the three months ended December 31, 2021 and 2020, respectively. Assets obtained or modified through finance lease liabilities totaled $17.3 million during the three months ended December 31, 2021. There were no assets obtained or modified through finance lease liabilities during the three months ended December 31, 2020. The following table presents the balance and classifications of the Company's right of use assets and lease liabilities included in the Unaudited Condensed Consolidated Balance Sheets: (Thousands) Balance Sheet Location December 31, 2021 September 30, Assets Noncurrent Operating lease assets Operating lease assets $ 173,617 $ 173,928 Finance lease assets Utility plant 23,286 13,489 Total lease assets $ 196,903 $ 187,417 Liabilities Current Operating lease liabilities Operating lease liabilities $ 4,531 $ 4,300 Finance lease liabilities Current maturities of long-term debt 6,397 5,393 Noncurrent Operating lease liabilities Operating lease liabilities 141,356 141,363 Finance lease liabilities Long-term debt 28,673 14,742 Total lease liabilities $ 180,957 $ 165,798 For operating lease assets and liabilities, the weighted average remaining lease term was 29.7 years and 29.6 years and the weighted average discount rate used in the valuation over the remaining lease term was 3.2 percent as of both December 31, 2021 and September 30, 2021. For finance lease assets and liabilities as of December 31, 2021 and September 30, 2021, the weighted average remaining lease term was 4.7 years and 3.4 years, respectively, and the weighted average discount rate used in the valuation over the remaining lease term is 2.7 percent and 3.5 percent as of December 31, 2021 and September 30, 2021, respectively. |
LEASES | 12. LEASES Lessee Accounting The Company determines if an arrangement is a lease at inception based on whether the Company has the right to control the use of an identified asset, the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset and accounts for leases in accordance with ASC 842, Leases . Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term, including payments at commencement that depend on an index or rate. Most leases in which the Company is the lessee do not have a readily determinable implicit rate, so an incremental borrowing rate, based on the information available at the lease commencement date, is utilized to determine the present value of lease payments. When a secured borrowing rate is not readily available, unsecured borrowing rates are adjusted for the effects of collateral to determine the incremental borrowing rate. The Company uses the implicit rate for agreements in which it is a lessor. The Company has not entered into any material agreements in which it is a lessor. Lease expense and lease income are recognized on a straight-line basis over the lease term for operating leases. The Company’s lease agreements primarily consist of commercial solar land leases, storage and capacity leases, equipment and real property, including land and office facilities, office equipment and the sale leaseback of its natural gas meters. Certain leases contain escalation provisions for inflation metrics. The storage leases contain a variable payment component that relates to the change in the inflation metrics that are not known past the current payment period. The variable components of these lease payments are excluded from the lease payments that are used to determine the related right-of-use lease asset and liability. The variable portion of these leases are recognized as leasing expenses when they are incurred. The capacity lease payments are fully variable and based on the amount of natural gas stored in the storage caverns. Generally, the Company’s solar land lease terms are between 20 and 50 years and may include multiple options to extend the terms for an additional five two seven The Company has lease agreements with lease and non-lease components and has elected the practical expedient to combine lease and non-lease components for certain classes of leases, such as office buildings, solar land leases and office equipment. Variable payments are not considered material to the Company. The Company’s lease agreements do not contain any material residual value guarantees, material restrictions or material covenants. There are no material lease transactions with related parties. The following table presents the Company's lease costs included in the Unaudited Condensed Consolidated Statements of Operations: Three Months Ended December 31, (Thousands) Income Statement Location 2021 2020 Operating lease cost (1) Operation and maintenance $ 2,119 $ 2,089 Finance lease cost Amortization of right-of-use assets Depreciation and amortization 396 1,246 Interest on lease liabilities Interest expense, net of capitalized interest 80 221 Total finance lease cost 476 1,467 Short-term lease cost Operation and maintenance 11 127 Variable lease cost Operation and maintenance 191 153 Total lease cost $ 2,797 $ 3,836 (1) Net of capitalized costs. The following table presents supplemental cash flow information related to leases: Three Months Ended December 31, (Thousands) 2021 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 2,037 $ 1,737 Operating cash flows for finance leases $ 170 $ 2,176 Financing cash flows for finance leases $ 2,275 $ 5,997 Assets obtained or modified for operating lease liabilities totaled approximately $808,000 and $9.3 million during the three months ended December 31, 2021 and 2020, respectively. Assets obtained or modified through finance lease liabilities totaled $17.3 million during the three months ended December 31, 2021. There were no assets obtained or modified through finance lease liabilities during the three months ended December 31, 2020. The following table presents the balance and classifications of the Company's right of use assets and lease liabilities included in the Unaudited Condensed Consolidated Balance Sheets: (Thousands) Balance Sheet Location December 31, 2021 September 30, Assets Noncurrent Operating lease assets Operating lease assets $ 173,617 $ 173,928 Finance lease assets Utility plant 23,286 13,489 Total lease assets $ 196,903 $ 187,417 Liabilities Current Operating lease liabilities Operating lease liabilities $ 4,531 $ 4,300 Finance lease liabilities Current maturities of long-term debt 6,397 5,393 Noncurrent Operating lease liabilities Operating lease liabilities 141,356 141,363 Finance lease liabilities Long-term debt 28,673 14,742 Total lease liabilities $ 180,957 $ 165,798 For operating lease assets and liabilities, the weighted average remaining lease term was 29.7 years and 29.6 years and the weighted average discount rate used in the valuation over the remaining lease term was 3.2 percent as of both December 31, 2021 and September 30, 2021. For finance lease assets and liabilities as of December 31, 2021 and September 30, 2021, the weighted average remaining lease term was 4.7 years and 3.4 years, respectively, and the weighted average discount rate used in the valuation over the remaining lease term is 2.7 percent and 3.5 percent as of December 31, 2021 and September 30, 2021, respectively. |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 3 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | 13. COMMITMENTS AND CONTINGENT LIABILITIES Cash Commitments NJNG has entered into long-term contracts, expiring at various dates through November 2038, for the supply, transportation and storage of natural gas. These contracts include annual fixed charges of approximately $191.0 million at current contract rates and volumes for the remainder of the fiscal year, which are recoverable through BGSS. For the purpose of securing storage and pipeline capacity, the Energy Services segment enters into storage and pipeline capacity contracts, which require the payment of certain demand charges by Energy Services to maintain the ability to access such natural gas storage or pipeline capacity, during a fixed time period, which generally ranges from one Commitments as of December 31, 2021, for natural gas purchases and future demand fees for the next five fiscal year periods are as follows: (Thousands) 2022 2023 2024 2025 2026 Thereafter Energy Services: Natural gas purchases $ 101,257 $ 1,857 $ — $ — $ — $ — Storage demand fees 15,217 12,177 6,698 5,018 2,375 906 Pipeline demand fees 49,519 46,628 22,259 19,131 15,211 18,648 Sub-total Energy Services $ 165,993 $ 60,662 $ 28,957 $ 24,149 $ 17,586 $ 19,554 NJNG: Natural gas purchases $ 7,668 $ — $ — $ — $ — $ — Storage demand fees 34,738 38,107 17,743 7,740 2,171 1,879 Pipeline demand fees 104,124 144,971 133,176 132,456 125,788 1,121,334 Sub-total NJNG $ 146,530 $ 183,078 $ 150,919 $ 140,196 $ 127,959 $ 1,123,213 Total $ 312,523 $ 243,740 $ 179,876 $ 164,345 $ 145,545 $ 1,142,767 Certain pipeline demand fees totaling approximately $4.0 million per year, for which Energy Services is the responsible party, are being paid for by the counterparty to a capacity release transaction beginning November 1, 2021 for a period of 10 years. Legal Proceedings Manufactured Gas Plant Remediation NJNG is responsible for the remedial cleanup of certain former MGP sites, dating back to gas operations in the late 1800s and early 1900s, which contain contaminated residues from former gas manufacturing operations. NJNG is currently involved in administrative proceedings with the NJDEP and participating in various studies and investigations by outside consultants, to determine the nature and extent of any such contaminated residues and to develop appropriate programs of remedial action, where warranted, under NJDEP regulations. NJNG periodically, and at least annually, performs an environmental review of former MGP sites located in Atlantic Highlands, Berkeley, Long Branch, Manchester, Toms River, Freehold and Aberdeen, New Jersey, including a review of potential liability for investigation and remedial action. NJNG estimated at the time of the most recent review that total future expenditures at the former MGP sites for which it is responsible, including potential liabilities for natural resource damages that might be brought by the NJDEP for alleged injury to groundwater or other natural resources concerning these sites will range from approximately $115.7 million to $178.7 million. NJNG’s estimate of these liabilities is based upon known facts, existing technology and enacted laws and regulations in place when the review was completed. Where it is probable that costs will be incurred, and the information is sufficient to establish a range of possible liability, NJNG accrues the most likely amount in the range. If no point within the range is more likely than the other, it is NJNG’s policy to accrue the lower end of the range. Accordingly, as of December 31, 2021, NJNG recorded a MGP remediation liability and a corresponding regulatory asset of approximately $126.9 million on the Unaudited Condensed Consolidated Balance Sheets based on the most likely amount. The actual costs to be incurred by NJNG are dependent upon several factors, including final determination of remedial action, changing technologies and governmental regulations, the ultimate ability of other responsible parties to pay and insurance recoveries, if any. In June 2019, NJNG initiated a preliminary assessment of a site in Aberdeen, New Jersey to determine prior ownership and if former MGP operations were active at the location. The preliminary assessment and site investigation activities are ongoing at the Aberdeen, NJ site location. The estimated costs to complete the preliminary assessment and site investigation phase are included in the MGP remediation liability and corresponding regulatory asset on the Unaudited Condensed Consolidated Balance Sheets at December 31, 2021 and September 30, 2021. NJNG will continue to gather information to determine whether the obligation exists to undertake remedial action, if any, and refine its estimate of potential costs for this site as more information becomes available. NJNG recovers its remediation expenditures, including carrying costs, over rolling seven-year periods pursuant to a RAC approved by the BPU. On April 7, 2021, the BPU approved an increase in the RAC, which increased the annual recovery from $9.7 million to $11.1 million and was effective May 1, 2021. On September 30, 2021, NJNG filed its annual SBC application requesting to recover remediation expenses including an increase in the RAC, of approximately $2.0 million annually, effective April 1, 2022. As of December 31, 2021, $64.7 million of previously incurred remediation costs, net of recoveries from customers and insurance proceeds, are included in regulatory assets on the Unaudited Condensed Consolidated Balance Sheets. NJNG will continue to seek recovery of MGP-related costs through the RAC. If any future regulatory position indicates that the recovery of such costs is not probable, the related non-recoverable costs would be charged to income in the period of such determination. General The Company is involved, and from time to time in the future may be involved, in a number of pending and threatened judicial, regulatory and arbitration proceedings relating to matters that arise in the ordinary course of business. In view of the inherent difficulty of predicting the outcome of litigation matters, particularly when such matters are in their early stages or where the claimants seek indeterminate damages, the Company cannot state with confidence what the eventual outcome of the pending litigation will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines or penalties related to each pending matter will be, if any. In accordance with applicable accounting guidance, the Company establishes accruals for litigation for those matters that present loss contingencies as to which it is both probable that a loss will be incurred and the amount of such loss can be reasonably estimated. The Company also discloses contingent matters for which there is a reasonable possibility of a loss. Based upon currently available information, the Company believes that the results of litigation that are currently pending, taken together, will not have a materially adverse effect on the Company’s financial condition, results of operations or cash flows. The actual results of resolving the pending litigation matters may be substantially higher than the amounts accrued. The foregoing statements about the Company’s litigation are based upon the Company’s judgments, assumptions and estimates and are necessarily subjective and uncertain. The Company has a number of threatened and pending litigation matters at various stages. |
REPORTING SEGMENT AND OTHER OPE
REPORTING SEGMENT AND OTHER OPERATIONS DATA | 3 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
REPORTING SEGMENT AND OTHER OPERATIONS DATA | 14. REPORTING SEGMENT AND OTHER OPERATIONS DATA The Company organizes its businesses based on a combination of factors, including its products and its regulatory environment. As a result, the Company manages its businesses through the following reporting segments and other operations: the Natural Gas Distribution segment consists of regulated energy and off-system, capacity and storage management operations; the Clean Energy Ventures segment consists of capital investments in clean energy projects; the Energy Services segment consists of unregulated wholesale and retail energy operations; the Storage and Transportation segment consists of the Company’s investments in natural gas transportation and storage facilities; the Home Services and Other operations consist of heating, cooling and water appliance sales, installations and services, other investments and general corporate activities. Information related to the Company's various reporting segments and other operations is detailed below: Three Months Ended December 31, (Thousands) 2021 2020 Operating revenues Natural Gas Distribution External customers $ 274,435 $ 195,729 Intercompany 337 — Clean Energy Ventures External customers 10,183 6,370 Energy Services External customers (1) 365,788 227,349 Intercompany 3,456 2,128 Storage and Transportation External customers 11,584 12,447 Intercompany 559 657 Subtotal 666,342 444,680 Home Services and Other External customers 13,852 12,410 Intercompany 99 167 Eliminations (4,451) (2,952) Total $ 675,842 $ 454,305 Depreciation and amortization Natural Gas Distribution $ 22,893 $ 19,169 Clean Energy Ventures 5,233 5,433 Energy Services (2) 28 42 Storage and Transportation 2,133 2,640 Subtotal 30,287 27,284 Home Services and Other 204 260 Eliminations (98) (182) Total $ 30,393 $ 27,362 Interest income (3) Natural Gas Distribution $ 193 $ 82 Storage and Transportation 377 694 Subtotal 570 776 Home Services and Other 155 132 Eliminations (224) (239) Total $ 501 $ 669 (1) Includes sales to Canada for the Energy Services segment, which are immaterial. (2) The amortization of acquired wholesale energy contracts is excluded above and is included in natural gas purchases - nonutility on the Unaudited Condensed Consolidated Statements of Operations. (3) Included in other income, net on the Unaudited Condensed Consolidated Statements of Operations. Three Months Ended December 31, (Thousands) 2021 2020 Interest expense, net of capitalized interest Natural Gas Distribution $ 10,995 $ 8,974 Clean Energy Ventures 5,427 5,034 Energy Services 675 680 Storage and Transportation 2,136 3,982 Subtotal 19,233 18,670 Home Services and Other 244 1,116 Total $ 19,477 $ 19,786 Income tax provision (benefit) Natural Gas Distribution $ 13,204 $ 8,367 Clean Energy Ventures (2,046) (3,086) Energy Services 20,505 12,122 Storage and Transportation 343 646 Subtotal 32,006 18,049 Home Services and Other 246 118 Eliminations (1,445) (726) Total $ 30,807 $ 17,441 Equity in earnings (loss) of affiliates Storage and Transportation $ 1,056 $ 3,193 Eliminations (481) (518) Total $ 575 $ 2,675 Net financial earnings (loss) Natural Gas Distribution $ 51,080 $ 49,467 Clean Energy Ventures (6,821) (10,274) Energy Services 17,567 1,500 Storage and Transportation 2,962 3,508 Subtotal 64,788 44,201 Home Services and Other 447 (62) Eliminations 535 518 Total $ 65,770 $ 44,657 Capital expenditures Natural Gas Distribution $ 73,464 $ 79,246 Clean Energy Ventures 25,380 22,335 Storage and Transportation 65,375 7,613 Subtotal 164,219 109,194 Home Services and Other 79 686 Total $ 164,298 $ 109,880 Investments in equity investees Storage and Transportation $ — $ 286 Total $ — $ 286 The Company's assets for the various reporting segments and business operations are detailed below: (Thousands) December 31, 2021 September 30, Assets at end of period: Natural Gas Distribution $ 3,861,240 $ 3,707,461 Clean Energy Ventures 937,696 914,788 Energy Services 393,744 365,423 Storage and Transportation 928,653 862,407 Subtotal 6,121,333 5,850,079 Home Services and Other 148,368 162,134 Intercompany assets (1) (288,544) (289,935) Total $ 5,981,157 $ 5,722,278 (1) Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation. The Chief Executive Officer, who uses NFE as a measure of profit or loss in measuring the results of the Company's reporting segments and operations, is the chief operating decision maker of the Company. A reconciliation of consolidated NFE to consolidated net income is as follows: Three Months Ended December 31, (Thousands) 2021 2020 Net financial earnings $ 65,770 $ 44,657 Less: Unrealized (gain) on derivative instruments and related transactions (82,191) (37,491) Tax effect 19,536 8,913 Effects of economic hedging related to natural gas inventory 23,577 (7,532) Tax effect (5,603) 1,790 NFE tax adjustment (861) (2,068) Net income $ 111,312 $ 81,045 The Company uses derivative instruments as economic hedges of purchases and sales of physical natural gas inventory. For GAAP purposes, these derivatives are recorded at fair value and related changes in fair value are included in reported earnings. Revenues and cost of natural gas related to physical natural gas flow are recognized when the natural gas is delivered to customers. Consequently, there is a mismatch in the timing of earnings recognition between the economic hedges and physical natural gas flows. Timing differences occur in two ways: • unrealized gains and losses on derivatives are recognized in reported earnings in periods prior to physical natural gas inventory flows; and • unrealized gains and losses of prior periods are reclassified as realized gains and losses when derivatives are settled in the same period as physical natural gas inventory movements occur. NFE is a measure of the earnings based on eliminating these timing differences, to effectively match the earnings effects of the economic hedges with the physical sale of natural gas, SRECs and foreign currency contracts. Consequently, to reconcile between net income and NFE, current period unrealized gains and losses on the derivatives are excluded from NFE as a reconciling item. Realized derivative gains and losses are also included in current period net income. However, NFE includes only realized gains and losses related to natural gas sold out of inventory, effectively matching the full earnings effects of the derivatives with realized margins on physical natural gas flows. NFE also excludes impairment charges associated with equity method investments, which are non-cash charges considered unusual in nature that occur infrequently and are not indicative of the Company's performance for its ongoing operations. Included in the tax effects are current and deferred income tax expense corresponding with the components of NFE. The Company also calculates a quarterly tax adjustment based on an estimated annual effective tax rate for NFE purposes. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 15. RELATED PARTY TRANSACTIONS Effective April 1, 2020, NJNG entered into a 5-year agreement for 3 Bcf of firm storage capacity with Steckman Ridge, which expires on March 31, 2025. Under the terms of the agreement, NJNG incurs demand fees, at market rates, of approximately $9.3 million annually, a portion of which is eliminated in consolidation. These fees are recoverable through NJNG’s BGSS mechanism and are included as a component of regulatory assets. Energy Services may periodically enter into storage or park and loan agreements with its affiliated FERC-jurisdictional natural gas storage facility, Steckman Ridge. As of December 31, 2021, Energy Services has entered into transactions with Steckman Ridge for varying terms, all of which expire by October 31, 2022. Demand fees, net of eliminations, associated with Steckman Ridge were as follows: Three Months Ended December 31, (Thousands) 2021 2020 Natural Gas Distribution $ 1,558 $ 1,568 Energy Services 288 166 Total $ 1,846 $ 1,734 The following table summarizes demand fees payable to Steckman Ridge as of: (Thousands) December 31, 2021 September 30, Natural Gas Distribution $ 775 $ 778 Energy Services 76 83 Total $ 851 $ 861 NJNG and Energy Services have entered into various AMAs, the effects of which are eliminated in consolidation. Under the terms of these agreements, NJNG releases certain transportation and storage contracts to Energy Services. As of December 31, 2021, NJNG and Energy Services had one AMA with an expiration date of March 31, 2022. NJNG has entered into a 5-year transportation precedent agreement with Adelphia Gateway for committed capacity of 130,000 Dths per day, which is expected to begin during the 3rd quarter of fiscal 2022, dependent upon the completion of a compressor. Energy Services has a 5-year agreement for 3 Bcf of firm storage capacity with Leaf River, which is eliminated in consolidation and expires in March 2024. In March 2021, NJNG and Clean Energy Ventures entered into a 15-year sublease and PPA agreement related to an onsite solar array and the related energy output at the Company’s headquarters in Wall, New Jersey, the effects of which are immaterial to the consolidated financial statements. In July 2021, NJNG entered into 16-year lease agreements with various NJR subsidiaries for office space at the Company’s headquarters in Wall, New Jersey, the effects of which are eliminated in consolidation. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Consolidation | The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared by the Company in accordance with the rules and regulations of the SEC and GAAP. The September 30, 2021 Balance Sheet data is derived from the audited financial statements of the Company. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's 2021 Annual Report on Form 10-K. The Unaudited Condensed Consolidated Financial Statements include the accounts of NJR and its subsidiaries. In the opinion of management, the accompanying Unaudited Condensed Consolidated Financial Statements reflect all adjustments necessary for a fair presentation of the results of the interim periods presented. These adjustments are of a normal and recurring nature. Because of the seasonal nature of the Company's utility and wholesale energy services operations, in addition to other factors, the financial results for the interim periods presented are not indicative of the results that are to be expected for the fiscal year ending September 30, 2022. Intercompany transactions and accounts have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company to make estimates that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingencies during the reporting period. On a quarterly basis or more frequently whenever events or changes in circumstances indicate a need, the Company evaluates its estimates, including those related to the calculation of the fair value of derivative instruments, debt, equity method investments, unbilled revenues, allowance for doubtful accounts, provisions for depreciation and amortization, long-lived assets, regulatory assets and liabilities, income taxes, pensions and other postemployment benefits, contingencies related to environmental matters and litigation. Asset retirement obligations are evaluated as often as needed. The Company’s estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The Company has legal, regulatory and environmental proceedings during the normal course of business that can result in loss contingencies. When evaluating the potential for a loss, the Company will establish a reserve if a loss is probable and can be reasonably estimated, in which case it is the Company’s policy to accrue the full amount of such estimates. Where the information is sufficient only to establish a range of probable liability, and no point within the range is more likely than any other, it is the Company’s policy to accrue the lower end of the range. In the normal course of business, estimated amounts are subsequently adjusted to actual results that may differ from estimates. |
Revenues | Revenues Revenues from the sale of natural gas to NJNG customers are recognized in the period that natural gas is delivered and consumed by customers, including an estimate for unbilled revenue. NJNG records unbilled revenue for natural gas services. Natural gas sales to individual customers are based on meter readings, which are performed on a systematic basis throughout the month. At the end of each month, the amount of natural gas delivered to each customer after the last meter reading through the end of the respective accounting period is estimated, and recognizes unbilled revenues related to these amounts. The unbilled revenue estimates are based on estimated customer usage by customer type, weather effects, unaccounted-for natural gas and the most current tariff rates. Clean Energy Ventures recognizes revenue when SRECs are transferred to counterparties. SRECs are physically delivered through the transfer of certificates as per contractual settlement schedules. The Clean Energy Act of 2018 established guidelines for the closure of the SREC registration program to new applicants in New Jersey. The SREC program officially closed to new qualified solar projects on April 30, 2020. In December 2019, the BPU established the TREC as the successor to the SREC program. TRECs provide a fixed compensation base multiplied by an assigned project factor in order to determine their value. The project factor is determined by the type and location of the project, as defined. All TRECs generated are required to be purchased monthly by a TREC program administrator as appointed by the BPU. In June 2020, Clean Energy Ventures began generating TRECs for qualified new residential and commercial solar projects placed into service following the close of the SREC program. TREC revenue is recognized when TRECs are generated and are transferred monthly based upon metered solar electricity activity. Revenues for Energy Services are recognized when the natural gas is physically delivered to the customer. In addition, changes in the fair value of derivatives that economically hedge the forecasted sales of the natural gas are recognized in operating revenues as they occur, as noted above. Energy Services also recognizes changes in the fair value of SREC derivative contracts as a component of operating revenues. During December 2020, Energy Services entered into a series of AMAs with an investment grade public utility to release pipeline capacity associated with certain natural gas transportation contracts, which commenced on November 1, 2021. The AMAs include a series of temporary and permanent releases and revenue under these agreements is recognized as the performance obligations are satisfied. For temporary releases of pipeline capacity, revenue is recognized on a straight-line basis over the agreed upon term. For permanent releases of pipeline capacity, which represent a transfer of contractual rights for such capacity, revenue is recognized upon the transfer of the underlying contractual rights. During the three months ended December 31, 2021, Energy Services recognized $22.1 million of operating revenue on the Unaudited Condensed Consolidated Statements of Operations. Amounts received in excess of revenue totaling $64.7 million are included in deferred revenue on the Unaudited Condensed Consolidated Balance Sheets. The Storage and Transportation segment generates revenues from firm storage contracts and transportation contracts, related usage fees and hub services for the use of storage space, injections and withdrawals from their natural gas storage facility and the delivery of natural gas to customers. Demand fees are recognized as revenue over the term of the related agreement while usage fees and hub services revenues are recognized as services are performed. Revenues from all other activities are recorded in the period during which products or services are delivered and accepted by customers, or over the related contractual term. See Note 3. Revenue for further information. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash on deposit and temporary investments with maturities of three months or less, and excludes restricted cash related to irrevocable letters of credit at Leaf River and escrow balances for utility plant projects at NJNG, which are recorded in other noncurrent assets on the Unaudited Condensed Consolidated Balance Sheets, respectively. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company segregates financial assets, primarily trade receivables and unbilled revenues due in one year or less, into portfolio segments based on shared risk characteristics, such as geographical location and regulatory environment, for evaluation of expected credit losses. Historical and current information, such as average write-offs, are applied to each portfolio segment to estimate the allowance for losses on uncollectible receivables. Additionally, the allowance for losses on uncollectible receivables is adjusted for reasonable and supportable forecasts of future economic conditions, which can include changing weather, commodity prices, regulations, and macroeconomic factors, such as unemployment rates among others, including the estimated impact of the ongoing pandemic on the outstanding balances. In December 2021, the Company deferred a portion of costs incurred related to bad debt for NJNG associated with customer accounts receivable as a regulatory asset resulting from the impacts of the ongoing COVID-19 pandemic. See Note 4. Regulation for additional information. |
Loans Receivable | Loans ReceivableNJNG currently provides loans, with terms ranging from two |
Software Costs | Software CostsThe Company capitalizes certain costs, such as software design and configuration, coding, testing and installation, that are incurred to purchase or create and implement computer software for internal use. Capitalized costs include external costs of materials and services utilized in developing or obtaining internal-use software and payroll and payroll-related costs for employees who are directly associated with and devote time to the internal-use software project. Maintenance costs are expensed as incurred. Upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. Amortization is recorded on the straight-line basis over the estimated useful lives. |
Sale Leasebacks | Sale Leasebacks NJNG utilizes sale leaseback arrangements as a financing mechanism to fund certain of its capital expenditures related to natural gas meters, whereby the physical asset is sold concurrent with an agreement to lease the asset back. These agreements include options to renew the lease or repurchase the asset at the end of the term. Proceeds from sale leaseback transactions are accounted for as financing arrangements and are included in long-term debt on the Unaudited Condensed Consolidated Balance Sheets. NJNG received $17.3 million during the three months ended December 31, 2021, in connection with the sale leaseback of its natural gas meters. There were no natural gas meter sale leasebacks recorded during the three months ended December 31, 2020. In addition, for certain of its commercial solar energy projects, the Company enters into lease agreements that provide for the sale of commercial solar energy assets to third parties and the concurrent leaseback of the assets. For sale leaseback transactions where the Company has concluded that the arrangement does not qualify as a sale as the Company retains control of the underlying assets and, as such, the Company uses the financing method to account for the transaction. Under the financing method, the Company recognizes the proceeds received from the buyer-lessor that constitute a payment to acquire the solar energy asset as a financing arrangement, which is recorded as a component of debt on the Unaudited Condensed Consolidated Balance Sheets. The Company continues to operate the solar assets and is responsible for related expenses and entitled to retain the revenue generated from RECs and energy sales. The ITCs and other tax benefits associated with these solar projects transfer to the buyer; however, the payments are structured so that Clean Energy Ventures is compensated for the transfer of the related tax attributes. Accordingly, Clean Energy Ventures recognizes the equivalent value of the tax attributes in other income on the Unaudited Condensed Consolidated Statements of Operations over the respective five-year ITC recapture periods, starting with the second year of the lease. During the three months ended December 31, 2021 and 2020, Clean Energy Ventures received proceeds of $3.3 million and $12.1 million, respectively, in connection with the sale leaseback of commercial solar projects. The proceeds received were recognized as a financing obligation on the Unaudited Condensed Consolidated Balance Sheets. |
Recently Adopted Updates to the Accounting Standards Codification | Recently Adopted Updates to the Accounting Standards Codification Income Taxes In December 2019, the FASB issued ASU No. 2019-12, an amendment to ASC 740, Income Taxes , which simplifies the accounting for income taxes and changes the accounting for certain income tax transactions, among other minor improvements. The Company adopted this guidance on October 1, 2021, and applied it on a prospective basis. The amendments in this update were either not applicable, currently applied, or did not have a material impact on the Company's financial position, results of operations, cash flows or disclosures. Investments - Equity Securities, Investments - Equity Method and Joint Ventures and Derivatives and Hedging In January 2020, the FASB issued ASU No. 2020-01, an amendment to ASC 321, Investments - Equity Securities, ASC 323 , Investments - Equity Method and Joint Ventures, and ASC 815 , Derivatives and Hedging, which clarifies the interactions between the three ASU topics. The update requires an entity to evaluate observable transactions that necessitate applying or discontinuing the equity method of accounting when applying the measurement alternative in Topic 321. This evaluation occurs prior to applying or upon ceasing the equity method. The update also states that when applying paragraph 815-10-15-141(a) for forward contracts and purchased options, an entity is not required to assess whether the underlying securities will be accounted for under the equity method in accordance with Topic 323 or fair value method under Topic 825 upon settlement or exercise. The Company adopted this guidance on October 1, 2021, and applied it on a prospective basis. There was no material impact on the Company's financial position, results of operations, cash flows or disclosures. Other In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements , which clarifies application of various provisions in the ASC by amending and adding new headings, cross referencing to other guidance, and refining or correcting terminology. It also improves the consistency by amending the ASC to include all disclosure guidance in the appropriate section. The Company adopted this guidance on October 1, 2021, and applied it on a prospective basis. There was no material impact on the Company's financial position, results of operations, cash flows or disclosures. Other Recent Updates to the Accounting Standards Codification Debt and Other In August 2020, the FASB issued ASU No. 2020-06, an amendment to ASC 470, Debt , and ASC 815, Derivatives and Hedging , which changes the accounting for convertible instruments by reducing the number of acceptable accounting models to three models including, the embedded derivative, substantial premium, and traditional no proceeds allocated models. The guidance is effective for the Company beginning October 1, 2022, and the Company can elect to apply it on either a modified or a full retrospective basis. The Company does not currently have convertible debt instruments and thus does not expect the amendments to have an impact on its financial position, results of operations, cash flows and disclosures upon adoption. In May 2021, the FASB issued ASU No. 2021-04, an amendment to ASC 470, Debt , ASC 260, Earnings per Share , ASC 718, Stock Compensation , and ASC 815, Derivatives and Hedging. The update impacts equity-classified written call options that remain equity-classified after a modification or exchange. The guidance is effective for the Company beginning October 1, 2022, and will be applied on a prospective basis. The Company does not currently have equity-classified written call options and thus does not expect the amendments to have an impact on its financial position, results of operations, cash flows and disclosures upon adoption. Leases In July 2021, the FASB issued ASU No. 2021-05, an amendment to ASC 842, Leases , which requires a lessor to classify a lease with entirely or partially variable payments that do not depend on an index or rate as an operating lease if another classification, including sales-type or direct financing would trigger a loss at the lease commencement date. The guidance is effective for the Company beginning October 1, 2022, and the Company can elect to apply it either on a retrospective basis to leases that have commenced or have been modified under ASC 842 or on a prospective basis. The Company is currently evaluating the amendments to understand the impact on its financial position, results of operations, cash flows and disclosures upon adoption. Business Combinations In October 2021, the FASB issued ASU No. 2021-08, an amendment to ASC 805, Business Combinations , which requires that an acquirer recognize, and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers . The guidance is effective for the Company beginning October 1, 2023, and will be applied on a prospective basis to new acquisitions following the date of adoption. The Company is currently evaluating the amendments to understand the impact on its financial position, results of operations, cash flows and disclosures upon adoption. |
Derivative Instruments | The Company is subject primarily to commodity price risk due to fluctuations in the market price of natural gas, SRECs and electricity. To manage this risk, the Company enters into a variety of derivative instruments including, but not limited to, futures contracts, physical forward contracts, financial options and swaps to economically hedge the commodity price risk associated with its existing and anticipated commitments to purchase and sell natural gas, SRECs and electricity. In addition, the Company is exposed to foreign currency and interest rate risk and may utilize foreign currency derivatives to hedge Canadian dollar denominated natural gas purchases and/or sales and interest rate derivatives to reduce exposure to fluctuations in interest rates. All of these types of contracts are accounted for as derivatives, unless the Company elects NPNS, which is done on a contract-by-contract election. Accordingly, all of the financial and certain of the Company's physical derivative instruments are recorded at fair value on the Unaudited Condensed Consolidated Balance Sheets. For a more detailed discussion of the Company’s fair value measurement policies and level disclosures associated with the Company’s derivative instruments, see Note 6. Fair Value . Energy Services Energy Services chooses not to designate its financial commodity and physical forward commodity derivatives as accounting hedges or to elect NPNS. The changes in the fair value of these derivatives are recorded as a component of natural gas purchases or operating revenues, as appropriate for Energy Services, on the Unaudited Condensed Consolidated Statements of Operations as unrealized gains or losses. For Energy Services at settlement, realized gains and losses on all financial derivative instruments are recognized as a component of natural gas purchases and realized gains and losses on all physical derivatives follow the presentation of the related unrealized gains and losses as a component of either natural gas purchases or operating revenues. Energy Services also enters into natural gas transactions in Canada and, consequently, is exposed to fluctuations in the value of Canadian currency relative to the U.S. dollar. Energy Services may utilize foreign currency derivatives to lock in the exchange rates associated with natural gas transactions denominated in Canadian currency. The derivatives may include currency forwards, futures, or swaps and are accounted for as derivatives. These derivatives are typically used to hedge demand fee payments on pipeline capacity, storage and natural gas purchase agreements. As a result of Energy Services entering into transactions to borrow natural gas, commonly referred to as “park and loans,” an embedded derivative is recognized relating to differences between the fair value of the amount borrowed and the fair value of the amount that will ultimately be repaid, based on changes in the forward price for natural gas prices at the borrowed location over the contract term. This embedded derivative is accounted for as a forward sale in the month in which the repayment of the borrowed natural gas is expected to occur, and is considered a derivative transaction that is recorded at fair value on the Unaudited Condensed Consolidated Balance Sheets, with changes in value recognized in current period earnings. Expected production of SRECs is hedged through the use of forward and futures contracts. All contracts require the Company to physically deliver SRECs through the transfer of certificates as per contractual settlement schedules. Energy Services recognizes changes in the fair value of these derivatives as a component of operating revenues. Upon settlement of the contract, the related revenue is recognized when the SREC is transferred to the counterparty. Natural Gas Distribution Changes in fair value of NJNG's financial commodity derivatives are recorded as a component of regulatory assets or liabilities on the Unaudited Condensed Consolidated Balance Sheets. The Company elects NPNS accounting treatment on all physical commodity contracts that NJNG entered into on or before December 31, 2015, and accounts for these contracts on an accrual basis. Accordingly, physical natural gas purchases are recognized in regulatory assets or liabilities on the Unaudited Condensed Consolidated Balance Sheets when the contract settles and the natural gas is delivered. The average cost of natural gas is charged to expense in the current period earnings based on the BGSS factor times the therm sales. Effective for contracts executed on or after January 1, 2016, NJNG no longer elects NPNS accounting treatment on a portfolio basis. However, since NPNS is a contract-by-contract election, where it makes sense to do so, NJNG can and may elect to treat certain contracts as normal. Because NJNG recovers these amounts through future BGSS rates as increases or decreases to the cost of natural gas in NJNG’s tariff for natural gas service, the changes in fair value of these contracts are deferred as a component of regulatory assets or liabilities on the Unaudited Condensed Consolidated Balance Sheets. Clean Energy Ventures The Company elects NPNS accounting treatment on PPA contracts executed by Clean Energy Ventures that meet the definition of a derivative and accounts for the contract on an accrual basis. Accordingly, electricity sales are recognized in revenues throughout the term of the PPA as electricity is delivered. NPNS is a contract-by-contract election and where it makes sense to do so, the Company can and may elect to treat certain contracts as normal. |
Fair Value Hierarchy | Fair Value Hierarchy The Company applies fair value measurement guidance to its financial assets and liabilities, as appropriate, which include financial derivatives and physical commodity contracts qualifying as derivatives, investments in equity securities and other financial assets and liabilities. In addition, authoritative accounting literature prescribes the use of a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based on the source of the data used to develop the price inputs. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to inputs that are based on unobservable market data and include the following: Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets. The Company's Level 1 assets and liabilities include exchange traded natural gas futures and options contracts, listed equities and money market funds. Exchange traded futures and options contracts include all energy contracts traded on the NYMEX, CME and ICE that the Company refers to internally as basis swaps, fixed swaps, futures and financial options that are cleared through a FCM. Level 2 Other significant observable inputs such as interest rates or price data, including both commodity and basis pricing that is observed either directly or indirectly from publications or pricing services. The Company's Level 2 assets and liabilities include over-the-counter physical forward commodity contracts and swap contracts, SREC forward sales or derivatives that are initially valued using observable quotes and are subsequently adjusted to include time value, credit risk or estimated transport pricing components for which no basis price is available. Level 2 financial derivatives consist of transactions with non-FCM counterparties (basis swaps, fixed swaps and/or options). Inputs are verifiable and do not require significant management judgment. For some physical commodity contracts the Company utilizes transportation tariff rates that are publicly available and that it considers to be observable inputs that are equivalent to market data received from an independent source. There are no significant judgments or adjustments applied to the transportation tariff inputs and no market perspective is required. Even if the transportation tariff input were considered to be a “model,” it would still be considered to be a Level 2 input as the data is: • widely accepted and public; • non-proprietary and sourced from an independent third party; and • observable and published. These additional adjustments are generally not considered to be significant to the ultimate recognized values. Level 3 Inputs derived from a significant amount of unobservable market data. These include the Company's best estimate of fair value and are derived primarily through the use of internal valuation methodologies. |
Lessee Accounting | Lessee Accounting The Company determines if an arrangement is a lease at inception based on whether the Company has the right to control the use of an identified asset, the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset and accounts for leases in accordance with ASC 842, Leases . Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term, including payments at commencement that depend on an index or rate. Most leases in which the Company is the lessee do not have a readily determinable implicit rate, so an incremental borrowing rate, based on the information available at the lease commencement date, is utilized to determine the present value of lease payments. When a secured borrowing rate is not readily available, unsecured borrowing rates are adjusted for the effects of collateral to determine the incremental borrowing rate. The Company uses the implicit rate for agreements in which it is a lessor. The Company has not entered into any material agreements in which it is a lessor. Lease expense and lease income are recognized on a straight-line basis over the lease term for operating leases. The Company’s lease agreements primarily consist of commercial solar land leases, storage and capacity leases, equipment and real property, including land and office facilities, office equipment and the sale leaseback of its natural gas meters. Certain leases contain escalation provisions for inflation metrics. The storage leases contain a variable payment component that relates to the change in the inflation metrics that are not known past the current payment period. The variable components of these lease payments are excluded from the lease payments that are used to determine the related right-of-use lease asset and liability. The variable portion of these leases are recognized as leasing expenses when they are incurred. The capacity lease payments are fully variable and based on the amount of natural gas stored in the storage caverns. Generally, the Company’s solar land lease terms are between 20 and 50 years and may include multiple options to extend the terms for an additional five two seven The Company has lease agreements with lease and non-lease components and has elected the practical expedient to combine lease and non-lease components for certain classes of leases, such as office buildings, solar land leases and office equipment. Variable payments are not considered material to the Company. The Company’s lease agreements do not contain any material residual value guarantees, material restrictions or material covenants. There are no material lease transactions with related parties. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Restricted Cash | The following table provides a reconciliation of cash and cash equivalents and restricted cash reported in the Unaudited Condensed Consolidated Balance Sheets to the total amounts in the Unaudited Condensed Consolidated Statements of Cash Flows as follows: (Thousands) December 31, 2021 September 30, December 31, Balance Sheet Cash and cash equivalents $ 1,259 $ 4,749 $ 22,358 Restricted cash in other noncurrent assets $ 1,294 $ 1,294 $ 2,431 Statements of Cash Flow Cash, cash equivalents and restricted cash $ 2,553 $ 6,043 $ 24,789 |
Summary of Natural Gas in Storage | The following table summarizes natural gas in storage, at average cost by segment as of: December 31, 2021 September 30, 2021 ($ in thousands) Natural Gas in Storage Bcf Natural Gas in Storage Bcf Natural Gas Distribution $ 110,673 22.7 $ 115,824 27.6 Energy Services 132,019 28.9 77,782 18.8 Total $ 242,692 51.6 $ 193,606 46.4 |
Schedule of Software Costs Included in the Consolidated Financial Statements | The following tables present the software costs included in the Unaudited Condensed Consolidated Financial Statements: (Thousands) December 31, 2021 September 30, Balance Sheets Utility plant, at cost $ 16,777 $ 16,543 Construction work in progress $ 11,725 $ 7,801 Nonutility plant and equipment, at cost $ 341 $ 338 Construction work in progress $ 1 $ 8 Accumulated depreciation and amortization, utility plant $ (1,644) $ (1,333) Accumulated depreciation and amortization, nonutility plant and equipment $ (16) $ (29) Software costs $ 5,464 $ 5,582 Three Months Ended December 31, Statements of Operations 2021 2020 Operation and maintenance (1) $ 2,523 $ 1,924 Depreciation and amortization $ 299 $ 253 (1) During the three months ended December 31, 2021 and 2020, approximately $113,000 and $77,000, respectively, was amortized from software costs into O&M. |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents the changes in the components of accumulated other comprehensive (loss) income, net of related tax effects during the three months ended December 31, 2021 and 2020: (Thousands) Cash Flow Hedges Postemployment Benefit Obligation Total Balance at September 30, 2021 $ (9,376) $ (25,152) $ (34,528) Other comprehensive income, net of tax Amounts reclassified from accumulated other comprehensive loss, net of tax of $(79), $(233), $(312), respectively 264 766 (1) 1,030 Balance at December 31, 2021 $ (9,112) $ (24,386) $ (33,498) Balance at September 30, 2020 $ (10,397) $ (33,918) $ (44,315) Other comprehensive income, net of tax Amounts reclassified from accumulated other comprehensive loss, net of tax of $(112), $(245) and $(357) 231 812 (1) 1,043 Balance at December 31, 2020 $ (10,166) $ (33,106) $ (43,272) (1) Included in the computation of net periodic pension cost, a component of operations and maintenance expense on the Unaudited Condensed Consolidated Statements of Operations. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligation, recognition period | 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 natural 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 electricity Clean Energy Ventures operates wholly-owned solar 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. Clean Energy Ventures Transition renewable energy certificates Clean Energy Ventures generates TRECs, which are created for every MWh of electricity produced by a solar generator. The performance obligation of Clean Energy Ventures is to generate electricity and TRECs, which are purchased monthly by a REC Administrator. Revenue is recognized upon generation. Energy Services 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 in line with the terms of the contract and based on the services provided. Payment is due upon receipt of the invoice. For temporary releases of pipeline capacity, revenue is recognized on a straight-line basis over the agreed upon term. Storage and Transportation Natural gas services The performance obligation of the Storage and Transportation segment is to provide the customer with storage and transportation services. The Storage and Transportation segment generates revenues from firm storage contracts and transportation contracts, injection and withdrawal at the storage facility and the delivery of natural gas to customers. Revenue is recognized over time as customers receive the benefits of its service as it is performed on their behalf using an output method based on actual deliveries. Demand fees are recognized as revenue over the term of the related agreement. 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: Energy Services Natural gas services For a permanent release of pipeline capacity, the performance obligation of NJRES is the release of the pipeline capacity associated with certain natural gas transportation contracts and the transfer of the underlying contractual rights to the counterparty. Revenue is recognized upon the transfer of the underlying contractual rights. Storage and Transportation Natural gas services The performance obligation of the Storage and Transportation segment is to provide the customer with storage and transportation services. The Storage and Transportation segment generates revenues from usage fees and hub services for the use of storage space, injection and withdrawal from the storage facility. Hub services include park and loan transactions and wheeling. Usage fees and hub services revenues are recognized as services are performed. 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 recognized at a point in time upon completion of the installation, which is when the customer is billed. |
Disaggregation of Revenue | Disaggregated revenues from contracts with customers by product line and by reporting segment and other business operations during the three months ended December 31, 2021 and 2020, are as follows: (Thousands) Natural Gas Distribution Clean Energy Ventures Energy Services Storage and Transportation Home Services Total 2021 Natural gas utility sales (1) $ 223,796 — — — — $ 223,796 Natural gas services — — 27,879 12,143 — 40,022 Service contracts — — — — 8,467 8,467 Installations and maintenance — — — — 5,484 5,484 Renewable energy certificates — 846 — — — 846 Electricity sales — 6,470 — — — 6,470 Eliminations (2 (337) — — (559) (99) (995) Revenues from contracts with customers 223,459 7,316 27,879 11,584 13,852 284,090 Alternative revenue programs (3) 10,654 — — — — 10,654 Derivative instruments 40,322 2,867 (4) 341,365 — — 384,554 Eliminations (2) — — (3,456) — — (3,456) Revenues out of scope 50,976 2,867 337,909 — — 391,752 Total operating revenues $ 274,435 10,183 365,788 11,584 13,852 $ 675,842 2020 Natural gas utility sales $ 189,364 — — — — $ 189,364 Natural gas services — — 6,428 13,104 — 19,532 Service contracts — — — — 8,259 8,259 Installations and maintenance — — — — 4,318 4,318 Renewable energy certificates — 690 — — — 690 Electricity sales — 4,388 — — — 4,388 Eliminations (1) — — — (657) (167) (824) Revenues from contracts with customers 189,364 5,078 6,428 12,447 12,410 225,727 Alternative revenue programs (3) 1,568 — — — — 1,568 Derivative instruments 4,797 1,292 (4) 223,049 — — 229,138 Eliminations (2) — — (2,128) — — (2,128) Revenues out of scope 6,365 1,292 220,921 — — 228,578 Total operating revenues $ 195,729 6,370 227,349 12,447 12,410 $ 454,305 (1) Includes building rent related to the Wall headquarters, which is eliminated in consolidation. (2) Consists of transactions between subsidiaries that are eliminated in consolidation. (3) Includes CIP revenue. (4) Includes SREC revenue. Disaggregated revenues from contracts with customers by customer type and by reporting segment and other business operations during the three months ended December 31, 2021 and 2020, are as follows: (Thousands) Natural Gas Distribution Clean Energy Ventures Energy Services Storage and Transportation Home Services Total 2021 Residential $ 151,308 2,972 — — 13,775 $ 168,055 Commercial and industrial 47,184 4,344 27,879 11,584 77 91,068 Firm transportation 22,675 — — — — 22,675 Interruptible and off-tariff 2,292 — — — — 2,292 Revenues out of scope 50,976 2,867 337,909 — — 391,752 Total operating revenues $ 274,435 10,183 365,788 11,584 13,852 $ 675,842 2020 Residential $ 137,224 2,722 — — 12,204 $ 152,150 Commercial and industrial 29,229 2,356 6,428 12,447 206 50,666 Firm transportation 21,104 — — — — 21,104 Interruptible and off-tariff 1,807 — — — — 1,807 Revenues out of scope 6,365 1,292 220,921 — — 228,578 Total operating revenues $ 195,729 6,370 227,349 12,447 12,410 $ 454,305 |
Expected Timing of Performance | The timing of revenue recognition, customer billings and cash collections resulting 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, 2021 and 2020, are as follows: Customer Accounts Receivable Customers' Credit (Thousands) Billed Unbilled Balances and Deposits Balance as of September 30, 2021 $ 212,838 $ 10,351 $ 32,586 Increase 53,977 62,598 6,080 Balance as of December 31, 2021 $ 266,815 $ 72,949 $ 38,666 Balance as of September 30, 2020 $ 134,173 $ 9,226 $ 25,934 Increase 63,468 44,568 7,014 Balance as of December 31, 2020 $ 197,641 $ 53,794 $ 32,948 |
Performance obligation, in excess of billings | The following table provides information about receivables, 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, 2021 and September 30, 2021: (Thousands) Natural Gas Distribution Clean Energy Ventures Energy Services Storage and Transportation Home Services Total December 31, 2021 Customer accounts receivable Billed $ 102,890 4,608 153,014 4,339 1,964 $ 266,815 Unbilled 71,542 1,407 — — — 72,949 Customers' credit balances and deposits (38,666) — — — — (38,666) Total $ 135,766 6,015 153,014 4,339 1,964 $ 301,098 September 30, 2021 Customer accounts receivable Billed $ 54,514 5,534 147,087 3,956 1,747 $ 212,838 Unbilled 8,427 1,924 — — — 10,351 Customers' credit balances and deposits (32,586) — — — — (32,586) Total $ 30,355 7,458 147,087 3,956 1,747 $ 190,603 |
REGULATION (Tables)
REGULATION (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Regulated Operations [Abstract] | |
Schedule of Regulator Liabilities | Regulatory assets and liabilities included on the Unaudited Condensed Consolidated Balance Sheets for NJNG are comprised of the following: (Thousands) December 31, 2021 September 30, Regulatory assets-current New Jersey Clean Energy Program $ 14,416 $ 16,308 Conservation Incentive Program 22,493 11,839 Other current regulatory assets 1,371 1,554 Total current regulatory assets $ 38,280 $ 29,701 Regulatory assets-noncurrent Environmental remediation costs: Expended, net of recoveries $ 64,662 $ 58,483 Liability for future expenditures 126,881 135,012 Deferred income taxes 39,613 39,694 SAVEGREEN 37,342 32,941 Postemployment and other benefit costs 114,515 117,194 Deferred storm damage costs 3,800 4,343 Cost of removal 99,160 99,238 Other noncurrent regulatory assets 38,685 32,695 Total noncurrent regulatory assets $ 524,658 $ 519,600 Regulatory liability-current Overrecovered natural gas costs $ 11,659 $ 5,510 Derivatives at fair value, net 7,340 22,497 Total current regulatory liabilities $ 18,999 $ 28,007 Regulatory liabilities-noncurrent Tax Act impact (1) $ 189,131 $ 190,386 Derivatives at fair value, net — 1,166 Other noncurrent regulatory liabilities 688 336 Total noncurrent regulatory liabilities $ 189,819 $ 191,888 (1) Reflects the re-measurement and subsequent amortization of NJNG's net deferred tax liabilities as a result of the change in federal tax rates enacted in the Tax Act. At December 31, 2021, other noncurrent regulatory assets include deferred pandemic costs of $10.7 million primarily related to a portion of bad debt associated with customer accounts receivable resulting from the impacts of the ongoing COVID-19 pandemic. These costs are eligible for future regulatory recovery. Regulatory assets and liabilities included on the Unaudited Condensed Consolidated Balance Sheets for Adelphia Gateway are comprised of the following: (Thousands) December 31, 2021 September 30, Total current regulatory assets $ 373 $ 417 Total noncurrent regulatory assets $ 3,416 $ 2,499 Total noncurrent regulatory liabilities $ 895 $ 1,163 |
Schedule of Regulatory Assets | Regulatory assets and liabilities included on the Unaudited Condensed Consolidated Balance Sheets for NJNG are comprised of the following: (Thousands) December 31, 2021 September 30, Regulatory assets-current New Jersey Clean Energy Program $ 14,416 $ 16,308 Conservation Incentive Program 22,493 11,839 Other current regulatory assets 1,371 1,554 Total current regulatory assets $ 38,280 $ 29,701 Regulatory assets-noncurrent Environmental remediation costs: Expended, net of recoveries $ 64,662 $ 58,483 Liability for future expenditures 126,881 135,012 Deferred income taxes 39,613 39,694 SAVEGREEN 37,342 32,941 Postemployment and other benefit costs 114,515 117,194 Deferred storm damage costs 3,800 4,343 Cost of removal 99,160 99,238 Other noncurrent regulatory assets 38,685 32,695 Total noncurrent regulatory assets $ 524,658 $ 519,600 Regulatory liability-current Overrecovered natural gas costs $ 11,659 $ 5,510 Derivatives at fair value, net 7,340 22,497 Total current regulatory liabilities $ 18,999 $ 28,007 Regulatory liabilities-noncurrent Tax Act impact (1) $ 189,131 $ 190,386 Derivatives at fair value, net — 1,166 Other noncurrent regulatory liabilities 688 336 Total noncurrent regulatory liabilities $ 189,819 $ 191,888 (1) Reflects the re-measurement and subsequent amortization of NJNG's net deferred tax liabilities as a result of the change in federal tax rates enacted in the Tax Act. At December 31, 2021, other noncurrent regulatory assets include deferred pandemic costs of $10.7 million primarily related to a portion of bad debt associated with customer accounts receivable resulting from the impacts of the ongoing COVID-19 pandemic. These costs are eligible for future regulatory recovery. Regulatory assets and liabilities included on the Unaudited Condensed Consolidated Balance Sheets for Adelphia Gateway are comprised of the following: (Thousands) December 31, 2021 September 30, Total current regulatory assets $ 373 $ 417 Total noncurrent regulatory assets $ 3,416 $ 2,499 Total noncurrent regulatory liabilities $ 895 $ 1,163 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivative Assets and Liabilities | The following table presents the fair value of the Company's derivative assets and liabilities recognized on the Unaudited Condensed Consolidated Balance Sheets as of: Derivatives at Fair Value December 31, 2021 September 30, 2021 (Thousands) Balance Sheet Location Assets Liabilities Assets Liabilities Derivatives not designated as hedging instruments: Natural Gas Distribution: Physical commodity contracts Derivatives - current $ 234 $ 4 $ 36 $ 16 Financial commodity contracts Derivatives - current 5,032 240 2,046 13 Energy Services: Physical commodity contracts Derivatives - current 2,285 18,592 2,818 24,592 Derivatives - noncurrent 135 15,261 333 13,237 Financial commodity contracts Derivatives - current 32,164 11,209 30,226 62,521 Derivatives - noncurrent 1,843 — 3,068 260 Foreign currency contracts Derivatives - current 68 4 125 3 Derivatives - noncurrent — — 2 — Total fair value of derivatives $ 41,761 $ 45,310 $ 38,654 $ 100,642 |
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, 2021: Derivative assets: Energy Services Physical commodity contracts $ 2,420 $ (908) $ (200) $ 1,312 Financial commodity contracts 34,007 (9,247) — 24,760 Foreign currency contracts 68 (4) — 64 Total Energy Services $ 36,495 $ (10,159) $ (200) $ 26,136 Natural Gas Distribution Physical commodity contracts $ 234 $ — $ — $ 234 Financial commodity contracts 5,032 (240) — 4,792 Total Natural Gas Distribution $ 5,266 $ (240) $ — $ 5,026 Derivative liabilities: Energy Services Physical commodity contracts $ 33,853 $ (908) $ — $ 32,945 Financial commodity contracts 11,209 (9,247) — 1,962 Foreign currency contracts 4 (4) — — Total Energy Services $ 45,066 $ (10,159) $ — $ 34,907 Natural Gas Distribution Physical commodity contracts $ 4 $ — $ — $ 4 Financial commodity contracts 240 (240) — — Total Natural Gas Distribution $ 244 $ (240) $ — $ 4 As of September 30, 2021: Derivative assets: Energy Services Physical commodity contracts $ 3,151 $ (894) $ (700) $ 1,557 Financial commodity contracts 33,294 (33,294) 20,532 20,532 Foreign currency contracts 127 (3) 124 Total Energy Services $ 36,572 $ (34,191) $ 19,832 $ 22,213 Natural Gas Distribution Physical commodity contracts $ 36 $ (8) $ — $ 28 Financial commodity contracts 2,046 (13) — 2,033 Total Natural Gas Distribution $ 2,082 $ (21) $ — $ 2,061 Derivative liabilities: Energy Services Physical commodity contracts $ 37,829 $ (894) $ — $ 36,935 Financial commodity contracts 62,781 (33,294) — 29,487 Foreign currency contracts 3 (3) — — Total Energy Services $ 100,613 $ (34,191) $ — $ 66,422 Natural Gas Distribution Physical commodity contracts $ 16 $ (8) $ — $ 8 Financial commodity contracts 13 (13) — — Total Natural Gas Distribution $ 29 $ (21) $ — $ 8 (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, 2021: Derivative assets: Energy Services Physical commodity contracts $ 2,420 $ (908) $ (200) $ 1,312 Financial commodity contracts 34,007 (9,247) — 24,760 Foreign currency contracts 68 (4) — 64 Total Energy Services $ 36,495 $ (10,159) $ (200) $ 26,136 Natural Gas Distribution Physical commodity contracts $ 234 $ — $ — $ 234 Financial commodity contracts 5,032 (240) — 4,792 Total Natural Gas Distribution $ 5,266 $ (240) $ — $ 5,026 Derivative liabilities: Energy Services Physical commodity contracts $ 33,853 $ (908) $ — $ 32,945 Financial commodity contracts 11,209 (9,247) — 1,962 Foreign currency contracts 4 (4) — — Total Energy Services $ 45,066 $ (10,159) $ — $ 34,907 Natural Gas Distribution Physical commodity contracts $ 4 $ — $ — $ 4 Financial commodity contracts 240 (240) — — Total Natural Gas Distribution $ 244 $ (240) $ — $ 4 As of September 30, 2021: Derivative assets: Energy Services Physical commodity contracts $ 3,151 $ (894) $ (700) $ 1,557 Financial commodity contracts 33,294 (33,294) 20,532 20,532 Foreign currency contracts 127 (3) 124 Total Energy Services $ 36,572 $ (34,191) $ 19,832 $ 22,213 Natural Gas Distribution Physical commodity contracts $ 36 $ (8) $ — $ 28 Financial commodity contracts 2,046 (13) — 2,033 Total Natural Gas Distribution $ 2,082 $ (21) $ — $ 2,061 Derivative liabilities: Energy Services Physical commodity contracts $ 37,829 $ (894) $ — $ 36,935 Financial commodity contracts 62,781 (33,294) — 29,487 Foreign currency contracts 3 (3) — — Total Energy Services $ 100,613 $ (34,191) $ — $ 66,422 Natural Gas Distribution Physical commodity contracts $ 16 $ (8) $ — $ 8 Financial commodity contracts 13 (13) — — Total Natural Gas Distribution $ 29 $ (21) $ — $ 8 (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 presents the effect of derivative instruments recognized on the Unaudited Condensed Consolidated Statements of Operations for the periods set forth below: (Thousands) Location of gain (loss) recognized in income on derivatives Amount of gain (loss) recognized Three Months Ended December 31, Derivatives not designated as hedging instruments: 2021 2020 Energy Services: Physical commodity contracts Operating revenues $ 150 $ 5,252 Physical commodity contracts Natural gas purchases 1,505 (5,054) Financial commodity contracts Natural gas purchases 61,189 47,755 Foreign currency contracts Natural gas purchases — 200 Total unrealized and realized loss $ 62,844 $ 48,153 |
Effect of Derivative Instruments Designated as Cash Flow Hedges on OCI | The following table reflects the gains (losses) associated with NJNG's derivative instruments for the periods set forth below: Three Months Ended December 31, (Thousands) 2021 2020 Natural Gas Distribution: Physical commodity contracts $ 1,696 $ 342 Financial commodity contracts (14,647) (4,272) Total unrealized and realized (loss) $ (12,951) $ (3,930) |
Schedule of Outstanding Long (Short) Derivatives | NJNG and Energy Services had the following outstanding long (short) derivatives as of: Volume (Bcf) Transaction Type December 31, 2021 September 30, Natural Gas Distribution Futures 24.0 22.2 Physical Commodity 1.5 7.6 Energy Services Futures (22.0) (13.4) Swaps (0.2) (0.3) Physical Commodity (4.9) 0.6 |
Schedule of Broker Margin Accounts by Company | The balances are as follows: (Thousands) Balance Sheet Location December 31, 2021 September 30, Natural Gas Distribution Restricted broker margin accounts-current assets $ 5,358 $ 2,790 Energy Services Restricted broker margin accounts-current assets $ 37,358 $ 70,050 Restricted broker margin accounts-current liabilities $ (15,475) $ — |
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, 2021. 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 $ 185,828 Noninvestment grade 11,016 Internally rated investment grade 23,742 Internally rated noninvestment grade 30,016 Total $ 250,602 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | The estimated fair value of long-term debt, including current maturities, excluding finance leases, debt issuance costs and solar asset financing obligations, is as follows: (Thousands) December 31, 2021 September 30, Carrying value (1) (2) (3) $ 2,202,845 $ 2,102,845 Fair market value $ 2,373,791 $ 2,288,544 (1) Excludes finance leases of $35.1 million and $20.1 million as of December 31, 2021 and September 30, 2021, respectively. (2) Excludes NJNG's debt issuance costs of $10.3 million and $9.1 million as of December 31, 2021 and September 30, 2021, respectively. (3) Excludes NJR's debt issuance costs of $3.7 million and $3.3 million as of December 31, 2021 and September 30, 2021, respectively. |
Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized as follows: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Thousands) (Level 1) (Level 2) (Level 3) Total As of December 31, 2021: Assets: Physical commodity contracts $ — $ 2,654 $ — $ 2,654 Financial commodity contracts 39,039 — — 39,039 Financial commodity contracts - foreign exchange — 68 — 68 Money market funds 41 — — 41 Other 2,085 — — 2,085 Total assets at fair value $ 41,165 $ 2,722 $ — $ 43,887 Liabilities: Physical commodity contracts $ — $ 33,857 $ — $ 33,857 Financial commodity contracts 11,278 171 — 11,449 Financial commodity contracts - foreign exchange — 4 — 4 Total liabilities at fair value $ 11,278 $ 34,032 $ — $ 45,310 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Thousands) (Level 1) (Level 2) (Level 3) Total As of September 30, 2021: Assets: Physical commodity contracts $ — $ 3,187 $ — $ 3,187 Financial commodity contracts 35,340 — — 35,340 Financial commodity contracts - foreign exchange — 127 — 127 Money market funds 41 — — 41 Other 1,815 — — 1,815 Total assets at fair value $ 37,196 $ 3,314 $ — $ 40,510 Liabilities: Physical commodity contracts $ — $ 37,845 $ — $ 37,845 Financial commodity contracts 62,188 606 — 62,794 Financial commodity contracts - foreign exchange — 3 — 3 Total liabilities at fair value $ 62,188 $ 38,454 $ — $ 100,642 |
INVESTMENTS IN EQUITY INVESTE_2
INVESTMENTS IN EQUITY INVESTEES (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Investments, All Other Investments [Abstract] | |
Schedule of Equity Method Investments | 's investments in equity method investees include the following as of: (Thousands) December 31, 2021 September 30, Steckman Ridge (1) $ 108,770 $ 109,050 PennEast 5,479 5,479 Total $ 114,249 $ 114,529 (1) Includes loans with a total outstanding principal balance of $70.4 million for both December 31, 2021 and September 30, 2021, which accrue interest at a variable rate that resets quarterly and are due October 1, 2023. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Basic and Diluted | The following table presents the calculation of the Company's basic and diluted earnings per share for: Three Months Ended December 31, (Thousands, except per share amounts) 2021 2020 Net income, as reported $ 111,312 $ 81,045 Basic earnings per share Weighted average shares of common stock outstanding-basic 95,944 96,114 Basic earnings per common share $1.16 $0.84 Diluted earnings per share Weighted average shares of common stock outstanding-basic 95,944 96,114 Incremental shares (1) 412 301 Weighted average shares of common stock outstanding-diluted 96,356 96,415 Diluted earnings per common share (2)(3) $1.16 $0.84 (1) Incremental shares consist primarily of unvested stock awards and performance shares. |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Line of Credit Facilities | A summary of NJR's credit facility and NJNG's commercial paper program and credit facility are as follows: (Thousands) December 31, 2021 September 30, Expiration Dates NJR Bank revolving credit facilities (1) $ 500,000 $ 500,000 September 2026 Notes outstanding at end of period $ 310,550 $ 219,100 Weighted average interest rate at end of period 1.13 % 1.05 % Amount available at end of period (2) $ 169,862 $ 270,312 NJNG Bank revolving credit facilities (3) $ 250,000 $ 250,000 September 2026 Commercial paper and notes outstanding at end of period $ 177,400 $ 158,200 Weighted average interest rate at end of period 0.55 % 0.17 % Amount available at end of period (4) $ 71,869 $ 91,069 (1) Committed credit facilities, which require commitment fees of 0.10 percent on the unused amounts. (2) Letters of credit outstanding total $19.6 million at December 31, 2021 and $10.6 million at September 30, 2021, which reduces the amount available by the same amount. (3) Committed credit facilities, which require commitment fees of 0.075 percent on the unused amounts. (4) Letters of credit outstanding total $731,000 at both December 31, 2021 and September 30, 2021, which reduces the amount available by the same amount. |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Cost | The components of the net periodic cost for pension benefits, including the Company's Pension Equalization Plan, and OPEB costs (principally health care and life insurance) for employees and covered dependents were as follows: Pension OPEB Three Months Ended Three Months Ended December 31, December 31, (Thousands) 2021 2020 2021 2020 Service cost $ 2,073 $ 2,182 $ 1,076 $ 1,211 Interest cost 2,408 2,278 1,589 1,518 Expected return on plan assets (5,319) (5,224) (1,894) (1,683) Recognized actuarial loss 2,186 2,862 1,421 1,977 Prior service cost (credit) amortization 25 25 (36) (45) Net periodic benefit cost $ 1,373 $ 2,123 $ 2,156 $ 2,978 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Lease, Cost | The following table presents the Company's lease costs included in the Unaudited Condensed Consolidated Statements of Operations: Three Months Ended December 31, (Thousands) Income Statement Location 2021 2020 Operating lease cost (1) Operation and maintenance $ 2,119 $ 2,089 Finance lease cost Amortization of right-of-use assets Depreciation and amortization 396 1,246 Interest on lease liabilities Interest expense, net of capitalized interest 80 221 Total finance lease cost 476 1,467 Short-term lease cost Operation and maintenance 11 127 Variable lease cost Operation and maintenance 191 153 Total lease cost $ 2,797 $ 3,836 (1) Net of capitalized costs. The following table presents supplemental cash flow information related to leases: Three Months Ended December 31, (Thousands) 2021 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ 2,037 $ 1,737 Operating cash flows for finance leases $ 170 $ 2,176 Financing cash flows for finance leases $ 2,275 $ 5,997 |
Assets And Liabilities, Lessee | The following table presents the balance and classifications of the Company's right of use assets and lease liabilities included in the Unaudited Condensed Consolidated Balance Sheets: (Thousands) Balance Sheet Location December 31, 2021 September 30, Assets Noncurrent Operating lease assets Operating lease assets $ 173,617 $ 173,928 Finance lease assets Utility plant 23,286 13,489 Total lease assets $ 196,903 $ 187,417 Liabilities Current Operating lease liabilities Operating lease liabilities $ 4,531 $ 4,300 Finance lease liabilities Current maturities of long-term debt 6,397 5,393 Noncurrent Operating lease liabilities Operating lease liabilities 141,356 141,363 Finance lease liabilities Long-term debt 28,673 14,742 Total lease liabilities $ 180,957 $ 165,798 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Long-term Purchase Commitment | Commitments as of December 31, 2021, for natural gas purchases and future demand fees for the next five fiscal year periods are as follows: (Thousands) 2022 2023 2024 2025 2026 Thereafter Energy Services: Natural gas purchases $ 101,257 $ 1,857 $ — $ — $ — $ — Storage demand fees 15,217 12,177 6,698 5,018 2,375 906 Pipeline demand fees 49,519 46,628 22,259 19,131 15,211 18,648 Sub-total Energy Services $ 165,993 $ 60,662 $ 28,957 $ 24,149 $ 17,586 $ 19,554 NJNG: Natural gas purchases $ 7,668 $ — $ — $ — $ — $ — Storage demand fees 34,738 38,107 17,743 7,740 2,171 1,879 Pipeline demand fees 104,124 144,971 133,176 132,456 125,788 1,121,334 Sub-total NJNG $ 146,530 $ 183,078 $ 150,919 $ 140,196 $ 127,959 $ 1,123,213 Total $ 312,523 $ 243,740 $ 179,876 $ 164,345 $ 145,545 $ 1,142,767 |
REPORTING SEGMENT AND OTHER O_2
REPORTING SEGMENT AND OTHER OPERATIONS DATA (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Information related to the Company's various reporting segments and other operations is detailed below: Three Months Ended December 31, (Thousands) 2021 2020 Operating revenues Natural Gas Distribution External customers $ 274,435 $ 195,729 Intercompany 337 — Clean Energy Ventures External customers 10,183 6,370 Energy Services External customers (1) 365,788 227,349 Intercompany 3,456 2,128 Storage and Transportation External customers 11,584 12,447 Intercompany 559 657 Subtotal 666,342 444,680 Home Services and Other External customers 13,852 12,410 Intercompany 99 167 Eliminations (4,451) (2,952) Total $ 675,842 $ 454,305 Depreciation and amortization Natural Gas Distribution $ 22,893 $ 19,169 Clean Energy Ventures 5,233 5,433 Energy Services (2) 28 42 Storage and Transportation 2,133 2,640 Subtotal 30,287 27,284 Home Services and Other 204 260 Eliminations (98) (182) Total $ 30,393 $ 27,362 Interest income (3) Natural Gas Distribution $ 193 $ 82 Storage and Transportation 377 694 Subtotal 570 776 Home Services and Other 155 132 Eliminations (224) (239) Total $ 501 $ 669 (1) Includes sales to Canada for the Energy Services segment, which are immaterial. (2) The amortization of acquired wholesale energy contracts is excluded above and is included in natural gas purchases - nonutility on the Unaudited Condensed Consolidated Statements of Operations. (3) Included in other income, net on the Unaudited Condensed Consolidated Statements of Operations. Three Months Ended December 31, (Thousands) 2021 2020 Interest expense, net of capitalized interest Natural Gas Distribution $ 10,995 $ 8,974 Clean Energy Ventures 5,427 5,034 Energy Services 675 680 Storage and Transportation 2,136 3,982 Subtotal 19,233 18,670 Home Services and Other 244 1,116 Total $ 19,477 $ 19,786 Income tax provision (benefit) Natural Gas Distribution $ 13,204 $ 8,367 Clean Energy Ventures (2,046) (3,086) Energy Services 20,505 12,122 Storage and Transportation 343 646 Subtotal 32,006 18,049 Home Services and Other 246 118 Eliminations (1,445) (726) Total $ 30,807 $ 17,441 Equity in earnings (loss) of affiliates Storage and Transportation $ 1,056 $ 3,193 Eliminations (481) (518) Total $ 575 $ 2,675 Net financial earnings (loss) Natural Gas Distribution $ 51,080 $ 49,467 Clean Energy Ventures (6,821) (10,274) Energy Services 17,567 1,500 Storage and Transportation 2,962 3,508 Subtotal 64,788 44,201 Home Services and Other 447 (62) Eliminations 535 518 Total $ 65,770 $ 44,657 Capital expenditures Natural Gas Distribution $ 73,464 $ 79,246 Clean Energy Ventures 25,380 22,335 Storage and Transportation 65,375 7,613 Subtotal 164,219 109,194 Home Services and Other 79 686 Total $ 164,298 $ 109,880 Investments in equity investees Storage and Transportation $ — $ 286 Total $ — $ 286 |
Schedule of Assets for Business Segments and Business Operations | The Company's assets for the various reporting segments and business operations are detailed below: (Thousands) December 31, 2021 September 30, Assets at end of period: Natural Gas Distribution $ 3,861,240 $ 3,707,461 Clean Energy Ventures 937,696 914,788 Energy Services 393,744 365,423 Storage and Transportation 928,653 862,407 Subtotal 6,121,333 5,850,079 Home Services and Other 148,368 162,134 Intercompany assets (1) (288,544) (289,935) Total $ 5,981,157 $ 5,722,278 (1) Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation. |
Reconciliation of Consolidated NFE to Consolidated Net Income | A reconciliation of consolidated NFE to consolidated net income is as follows: Three Months Ended December 31, (Thousands) 2021 2020 Net financial earnings $ 65,770 $ 44,657 Less: Unrealized (gain) on derivative instruments and related transactions (82,191) (37,491) Tax effect 19,536 8,913 Effects of economic hedging related to natural gas inventory 23,577 (7,532) Tax effect (5,603) 1,790 NFE tax adjustment (861) (2,068) Net income $ 111,312 $ 81,045 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of Demand Fees and Demand Fees Payable | Demand fees, net of eliminations, associated with Steckman Ridge were as follows: Three Months Ended December 31, (Thousands) 2021 2020 Natural Gas Distribution $ 1,558 $ 1,568 Energy Services 288 166 Total $ 1,846 $ 1,734 The following table summarizes demand fees payable to Steckman Ridge as of: (Thousands) December 31, 2021 September 30, Natural Gas Distribution $ 775 $ 778 Energy Services 76 83 Total $ 851 $ 861 |
NATURE OF THE BUSINESS (Details
NATURE OF THE BUSINESS (Details) | 3 Months Ended |
Dec. 31, 2021customersubsidiary | |
Steckman Ridge | |
Nature of Business [Line Items] | |
Ownership percentage | 50.00% |
PennEast | |
Nature of Business [Line Items] | |
Ownership percentage | 20.00% |
Natural Gas Distribution | |
Nature of Business [Line Items] | |
Total retail customers | customer | 566,600 |
NJR Retail Holdings Corporation | |
Nature of Business [Line Items] | |
Number of principal subsidiaries | subsidiary | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 1,259 | $ 4,749 | $ 22,358 | |
Restricted cash in other noncurrent assets | 1,294 | 1,294 | 2,431 | |
Cash, cash equivalents and restricted cash | $ 2,553 | $ 6,043 | $ 24,789 | $ 119,423 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ADDITIONAL INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Operating revenues | $ 675,842 | $ 454,305 | |
Loans receivable in other noncurrent assets | 32,600 | $ 32,300 | |
Proceeds from sale leaseback transaction | 17,300 | 0 | |
Proceeds from sale leaseback transaction - solar | 3,300 | 12,124 | |
Financial Asset, Not Past Due | |||
Finite-Lived Intangible Assets [Line Items] | |||
Loans receivable in other current assets | 14,100 | $ 14,200 | |
Energy Services | |||
Finite-Lived Intangible Assets [Line Items] | |||
Operating revenues | 22,100 | ||
Deferred revenue | 64,700 | ||
Natural Gas Distribution | |||
Finite-Lived Intangible Assets [Line Items] | |||
Proceeds from sale leaseback transaction | $ 17,300 | $ 0 | |
Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Loans receivable, term | 2 years | ||
Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Loans receivable, term | 10 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - NATURAL GAS IN STORAGE (Details) $ in Thousands | Dec. 31, 2021USD ($)Bcf | Sep. 30, 2021USD ($)Bcf |
Inventory [Line Items] | ||
Natural Gas in Storage, value | $ | $ 242,692 | $ 193,606 |
Natural Gas in Storage, Bcf | Bcf | 51.6 | 46.4 |
Natural Gas Distribution | ||
Inventory [Line Items] | ||
Natural Gas in Storage, value | $ | $ 110,673 | $ 115,824 |
Natural Gas in Storage, Bcf | Bcf | 22.7 | 27.6 |
Energy Services | ||
Inventory [Line Items] | ||
Natural Gas in Storage, value | $ | $ 132,019 | $ 77,782 |
Natural Gas in Storage, Bcf | Bcf | 28.9 | 18.8 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SOFTWARE COSTS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | |
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | |||
Capitalized software costs | $ 5,464 | $ 5,582 | |
Software amortization | 113 | $ 77 | |
Operation and maintenance | |||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | |||
Software costs | 2,523 | 1,924 | |
Depreciation and amortization | |||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | |||
Software costs | 299 | $ 253 | |
Utility plant, at cost | |||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | |||
Software costs | 16,777 | 16,543 | |
Construction work in progress | Regulated | |||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | |||
Software costs | 11,725 | 7,801 | |
Construction work in progress | Unregulated | |||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | |||
Software costs | 1 | 8 | |
Nonutility plant and equipment, at cost | |||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | |||
Software costs | 341 | 338 | |
Accumulated depreciation and amortization, utility plant | |||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | |||
Accumulated depreciation and amortization | (1,644) | (1,333) | |
Accumulated depreciation and amortization, nonutility plant and equipment | |||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | |||
Accumulated depreciation and amortization | $ (16) | $ (29) |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | ||
Balance as of beginning of period | $ 1,630,862 | $ 1,643,896 |
Balance as of end of period | 1,716,978 | 1,698,214 |
Cash Flow Hedges | ||
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | ||
Balance as of beginning of period | (9,376) | (10,397) |
Amounts reclassified from accumulated other comprehensive income, net of tax | 264 | 231 |
Balance as of end of period | (9,112) | (10,166) |
Tax on amounts reclassified from accumulated other comprehensive income | (79) | (112) |
Postemployment Benefit Obligation | ||
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | ||
Balance as of beginning of period | (25,152) | (33,918) |
Amounts reclassified from accumulated other comprehensive income, net of tax | 766 | 812 |
Balance as of end of period | (24,386) | (33,106) |
Tax on amounts reclassified from accumulated other comprehensive income | (233) | (245) |
Total | ||
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | ||
Balance as of beginning of period | (34,528) | (44,315) |
Amounts reclassified from accumulated other comprehensive income, net of tax | 1,030 | 1,043 |
Balance as of end of period | (33,498) | (43,272) |
Tax on amounts reclassified from accumulated other comprehensive income | $ (312) | $ (357) |
REVENUE - DISAGGREGATED REVENUE
REVENUE - DISAGGREGATED REVENUE - PRODUCT (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | $ 284,090 | $ 225,727 |
Alternative revenue programs | 10,654 | 1,568 |
Derivative instruments | 384,554 | 229,138 |
Revenues out of scope | 391,752 | 228,578 |
Total operating revenues | 675,842 | 454,305 |
Natural gas utility sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 223,796 | 189,364 |
Natural gas services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 40,022 | 19,532 |
Service contracts | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 8,467 | 8,259 |
Installations and maintenance | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 5,484 | 4,318 |
Renewable energy certificates | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 846 | 690 |
Electricity sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 6,470 | 4,388 |
Energy Services | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | 22,100 | |
Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | 666,342 | 444,680 |
Operating Segments | Natural Gas Distribution | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 223,459 | 189,364 |
Alternative revenue programs | 10,654 | 1,568 |
Derivative instruments | 40,322 | 4,797 |
Revenues out of scope | 50,976 | 6,365 |
Total operating revenues | 274,435 | 195,729 |
Operating Segments | Natural Gas Distribution | Natural gas utility sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 223,796 | 189,364 |
Operating Segments | Natural Gas Distribution | Natural gas services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Natural Gas Distribution | Service contracts | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Natural Gas Distribution | Installations and maintenance | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Natural Gas Distribution | Renewable energy certificates | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Natural Gas Distribution | Electricity sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Clean Energy Ventures | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 7,316 | 5,078 |
Alternative revenue programs | 0 | 0 |
Derivative instruments | 2,867 | 1,292 |
Revenues out of scope | 2,867 | 1,292 |
Total operating revenues | 10,183 | 6,370 |
Operating Segments | Clean Energy Ventures | Natural gas utility sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Clean Energy Ventures | Natural gas services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Clean Energy Ventures | Service contracts | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Clean Energy Ventures | Installations and maintenance | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Clean Energy Ventures | Renewable energy certificates | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 846 | 690 |
Operating Segments | Clean Energy Ventures | Electricity sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 6,470 | 4,388 |
Operating Segments | Energy Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 27,879 | 6,428 |
Alternative revenue programs | 0 | 0 |
Derivative instruments | 341,365 | 223,049 |
Revenues out of scope | 337,909 | 220,921 |
Total operating revenues | 365,788 | 227,349 |
Operating Segments | Energy Services | Natural gas utility sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Energy Services | Natural gas services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 27,879 | 6,428 |
Operating Segments | Energy Services | Service contracts | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Energy Services | Installations and maintenance | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Energy Services | Renewable energy certificates | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Energy Services | Electricity sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Storage and Transportation | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 11,584 | 12,447 |
Alternative revenue programs | 0 | 0 |
Derivative instruments | 0 | 0 |
Revenues out of scope | 0 | 0 |
Total operating revenues | 11,584 | 12,447 |
Operating Segments | Storage and Transportation | Natural gas utility sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Storage and Transportation | Natural gas services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 12,143 | 13,104 |
Operating Segments | Storage and Transportation | Service contracts | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Storage and Transportation | Installations and maintenance | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Storage and Transportation | Renewable energy certificates | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Operating Segments | Storage and Transportation | Electricity sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Home Services and Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues out of scope | 0 | 0 |
Total operating revenues | 13,852 | 12,410 |
Home Services and Other | Home Services and Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 13,852 | 12,410 |
Alternative revenue programs | 0 | 0 |
Derivative instruments | 0 | 0 |
Revenues out of scope | 0 | 0 |
Total operating revenues | 13,852 | 12,410 |
Home Services and Other | Home Services and Other | Natural gas utility sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Home Services and Other | Home Services and Other | Natural gas services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Home Services and Other | Home Services and Other | Service contracts | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 8,467 | 8,259 |
Home Services and Other | Home Services and Other | Installations and maintenance | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 5,484 | 4,318 |
Home Services and Other | Home Services and Other | Renewable energy certificates | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Home Services and Other | Home Services and Other | Electricity sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | (995) | (824) |
Revenues out of scope | (3,456) | (2,128) |
Eliminations | Natural Gas Distribution | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | (337) | 0 |
Revenues out of scope | 0 | 0 |
Eliminations | Clean Energy Ventures | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Revenues out of scope | 0 | 0 |
Eliminations | Energy Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Revenues out of scope | (3,456) | (2,128) |
Eliminations | Storage and Transportation | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | (559) | (657) |
Revenues out of scope | 0 | 0 |
Eliminations | Home Services and Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | (99) | (167) |
Revenues out of scope | $ 0 | $ 0 |
REVENUE - DISAGGREGATED REVEN_2
REVENUE - DISAGGREGATED REVENUE - TYPE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | $ 284,090 | $ 225,727 |
Revenues out of scope | 391,752 | 228,578 |
Total operating revenues | 675,842 | 454,305 |
Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 168,055 | 152,150 |
Commercial and industrial | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 91,068 | 50,666 |
Firm transportation | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 22,675 | 21,104 |
Interruptible and off-tariff | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 2,292 | 1,807 |
Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | 666,342 | 444,680 |
Home Services and Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues out of scope | 0 | 0 |
Total operating revenues | 13,852 | 12,410 |
Home Services and Other | Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 13,775 | 12,204 |
Home Services and Other | Commercial and industrial | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 77 | 206 |
Home Services and Other | Firm transportation | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Home Services and Other | Interruptible and off-tariff | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Natural Gas Distribution | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 223,459 | 189,364 |
Revenues out of scope | 50,976 | 6,365 |
Total operating revenues | 274,435 | 195,729 |
Natural Gas Distribution | Operating Segments | Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 151,308 | 137,224 |
Natural Gas Distribution | Operating Segments | Commercial and industrial | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 47,184 | 29,229 |
Natural Gas Distribution | Operating Segments | Firm transportation | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 22,675 | 21,104 |
Natural Gas Distribution | Operating Segments | Interruptible and off-tariff | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 2,292 | 1,807 |
Clean Energy Ventures | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 7,316 | 5,078 |
Revenues out of scope | 2,867 | 1,292 |
Total operating revenues | 10,183 | 6,370 |
Clean Energy Ventures | Operating Segments | Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 2,972 | 2,722 |
Clean Energy Ventures | Operating Segments | Commercial and industrial | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 4,344 | 2,356 |
Clean Energy Ventures | Operating Segments | Firm transportation | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Clean Energy Ventures | Operating Segments | Interruptible and off-tariff | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Energy Services | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | 22,100 | |
Energy Services | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 27,879 | 6,428 |
Revenues out of scope | 337,909 | 220,921 |
Total operating revenues | 365,788 | 227,349 |
Energy Services | Operating Segments | Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Energy Services | Operating Segments | Commercial and industrial | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 27,879 | 6,428 |
Energy Services | Operating Segments | Firm transportation | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Energy Services | Operating Segments | Interruptible and off-tariff | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Storage and Transportation | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 11,584 | 12,447 |
Revenues out of scope | 0 | 0 |
Total operating revenues | 11,584 | 12,447 |
Storage and Transportation | Operating Segments | Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Storage and Transportation | Operating Segments | Commercial and industrial | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 11,584 | 12,447 |
Storage and Transportation | Operating Segments | Firm transportation | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | 0 | 0 |
Storage and Transportation | Operating Segments | Interruptible and off-tariff | ||
Disaggregation of Revenue [Line Items] | ||
Revenues from contracts with customers | $ 0 | $ 0 |
REVENUE - TIMING OF REVENUE REC
REVENUE - TIMING OF REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Timing of Revenue Recognition [Roll Forward] | ||
Billed, beginning | $ 212,838 | $ 134,173 |
Unbilled, beginning | 10,351 | 9,226 |
Customers' credit, beginning | 32,586 | 25,934 |
Increase (decrease) for accounts receivable, billed | 53,977 | 63,468 |
Increase (decrease) for unbilled revenue | 62,598 | 44,568 |
Increase (decrease) for customers' credits | 6,080 | 7,014 |
Billed, end | 266,815 | 197,641 |
Unbilled, end | 72,949 | 53,794 |
Customers' credit, end | $ 38,666 | $ 32,948 |
REVENUE - TIMING OF REVENUE R_2
REVENUE - TIMING OF REVENUE RECOGNITION - BALANCE SHEET (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Customer accounts receivable | ||||
Billed | $ 266,815 | $ 212,838 | $ 197,641 | $ 134,173 |
Unbilled revenues | 72,949 | 10,351 | 53,794 | 9,226 |
Customers' credit balances and deposits | (38,666) | (32,586) | $ (32,948) | $ (25,934) |
Customers accounts receivables & Customers' credit balances and deposits | 301,098 | 190,603 | ||
Operating Segments | Natural Gas Distribution | ||||
Customer accounts receivable | ||||
Billed | 102,890 | 54,514 | ||
Unbilled revenues | 71,542 | 8,427 | ||
Customers' credit balances and deposits | (38,666) | (32,586) | ||
Customers accounts receivables & Customers' credit balances and deposits | 135,766 | 30,355 | ||
Operating Segments | Clean Energy Ventures | ||||
Customer accounts receivable | ||||
Billed | 4,608 | 5,534 | ||
Unbilled revenues | 1,407 | 1,924 | ||
Customers' credit balances and deposits | 0 | 0 | ||
Customers accounts receivables & Customers' credit balances and deposits | 6,015 | 7,458 | ||
Operating Segments | Energy Services | ||||
Customer accounts receivable | ||||
Billed | 153,014 | 147,087 | ||
Unbilled revenues | 0 | 0 | ||
Customers' credit balances and deposits | 0 | 0 | ||
Customers accounts receivables & Customers' credit balances and deposits | 153,014 | 147,087 | ||
Operating Segments | Storage and Transportation | ||||
Customer accounts receivable | ||||
Billed | 4,339 | 3,956 | ||
Unbilled revenues | 0 | 0 | ||
Customers' credit balances and deposits | 0 | 0 | ||
Customers accounts receivables & Customers' credit balances and deposits | 4,339 | 3,956 | ||
Home Services and Other | ||||
Customer accounts receivable | ||||
Billed | 1,964 | 1,747 | ||
Unbilled revenues | 0 | 0 | ||
Customers' credit balances and deposits | 0 | 0 | ||
Customers accounts receivables & Customers' credit balances and deposits | $ 1,964 | $ 1,747 |
REGULATION - REGULATORY FILINGS
REGULATION - REGULATORY FILINGS (Details) - USD ($) $ in Thousands | Jan. 26, 2022 | Nov. 19, 2021 | Nov. 17, 2021 | Dec. 31, 2021 | Sep. 30, 2021 |
Schedule of Regulatory Filings [Line Items] | |||||
Other noncurrent regulatory assets | $ 528,074 | $ 522,099 | |||
Natural Gas Distribution | |||||
Schedule of Regulatory Filings [Line Items] | |||||
Other noncurrent regulatory assets | $ 10,700 | ||||
Base Rate Stipulation | |||||
Schedule of Regulatory Filings [Line Items] | |||||
Weighted average cost of capital | 6.84% | ||||
Approved return on equity | 9.60% | ||||
Approved equity capital structure, percentage | 54.00% | ||||
Public utilities, approved depreciation rate, percentage | 2.78% | ||||
BPU | Natural Gas Distribution | |||||
Schedule of Regulatory Filings [Line Items] | |||||
Requested rate increase (decrease), amount | $ 79,000 | ||||
SAFE II and NJ RISE | |||||
Schedule of Regulatory Filings [Line Items] | |||||
Approved rate increase (decrease), amount | $ 269 | ||||
BGSS | Natural Gas Distribution | |||||
Schedule of Regulatory Filings [Line Items] | |||||
Requested rate increase (decrease), amount | 2,900 | ||||
BGSS | Natural Gas Distribution | |||||
Schedule of Regulatory Filings [Line Items] | |||||
Requested rate increase (decrease), amount | $ 24,200 | ||||
BGSS Balancing | Natural Gas Distribution | |||||
Schedule of Regulatory Filings [Line Items] | |||||
Requested rate increase (decrease), amount | 13,000 | ||||
Conservation Incentive Program | Natural Gas Distribution | |||||
Schedule of Regulatory Filings [Line Items] | |||||
Requested rate increase (decrease), amount | $ (6,300) | ||||
SAVEGREEN | Subsequent Event | |||||
Schedule of Regulatory Filings [Line Items] | |||||
Annual recovery increase | $ 2,200 |
REGULATION - REGULATORY ASSETS
REGULATION - REGULATORY ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-current | $ 38,653 | $ 30,118 |
Overrecovered natural gas costs | 18,999 | 28,007 |
Regulatory liabilities-noncurrent | 190,714 | 193,051 |
NJNG | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-current | 38,280 | 29,701 |
Regulatory assets-noncurrent | 524,658 | 519,600 |
Overrecovered natural gas costs | 18,999 | 28,007 |
Regulatory liabilities-noncurrent | 189,819 | 191,888 |
Adelphia | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-current | 373 | 417 |
Regulatory assets-noncurrent | 3,416 | 2,499 |
Regulatory liabilities-noncurrent | 895 | 1,163 |
Total current regulatory liabilities | NJNG | ||
Regulatory Assets And Liabilities [Line Items] | ||
Overrecovered natural gas costs | 11,659 | 5,510 |
Derivatives at fair value, net | NJNG | ||
Regulatory Assets And Liabilities [Line Items] | ||
Overrecovered natural gas costs | 7,340 | 22,497 |
Regulatory liabilities-noncurrent | 0 | 1,166 |
Tax Act impact | NJNG | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory liabilities-noncurrent | 189,131 | 190,386 |
Other noncurrent regulatory liabilities | NJNG | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory liabilities-noncurrent | 688 | 336 |
New Jersey Clean Energy Program | NJNG | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-current | 14,416 | 16,308 |
Conservation Incentive Program | NJNG | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-current | 22,493 | 11,839 |
Other current regulatory assets | NJNG | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-current | 1,371 | 1,554 |
Regulatory assets-noncurrent | 38,685 | 32,695 |
Expended, net of recoveries | NJNG | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 64,662 | 58,483 |
Liability for future expenditures | NJNG | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 126,881 | 135,012 |
Deferred income taxes | NJNG | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 39,613 | 39,694 |
SAVEGREEN | NJNG | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 37,342 | 32,941 |
Postemployment and other benefit costs | NJNG | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 114,515 | 117,194 |
Deferred storm damage costs | NJNG | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 3,800 | 4,343 |
Cost of removal | NJNG | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | $ 99,160 | $ 99,238 |
DERIVATIVE INSTRUMENTS - BALANC
DERIVATIVE INSTRUMENTS - BALANCE SHEET RELATED DISCLOSURES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Fair Value | ||
Derivative assets, current | $ 39,783 | $ 35,251 |
Derivative liabilities, current | 30,049 | 87,145 |
Derivative assets, noncurrent | 1,978 | 3,403 |
Derivative liabilities, noncurrent | 15,261 | 13,497 |
Not Designated as Hedging Instrument | ||
Fair Value | ||
Derivative assets | 41,761 | 38,654 |
Derivative liabilities | 45,310 | 100,642 |
Natural Gas Distribution | Not Designated as Hedging Instrument | Physical commodity contracts | ||
Fair Value | ||
Derivative assets, current | 234 | 36 |
Derivative liabilities, current | 4 | 16 |
Natural Gas Distribution | Not Designated as Hedging Instrument | Financial commodity contracts | ||
Fair Value | ||
Derivative assets, current | 5,032 | 2,046 |
Derivative liabilities, current | 240 | 13 |
Energy Services | Not Designated as Hedging Instrument | Physical commodity contracts | ||
Fair Value | ||
Derivative assets, current | 2,285 | 2,818 |
Derivative liabilities, current | 18,592 | 24,592 |
Derivative assets, noncurrent | 135 | 333 |
Derivative liabilities, noncurrent | 15,261 | 13,237 |
Energy Services | Not Designated as Hedging Instrument | Financial commodity contracts | ||
Fair Value | ||
Derivative assets, current | 32,164 | 30,226 |
Derivative liabilities, current | 11,209 | 62,521 |
Derivative assets, noncurrent | 1,843 | 3,068 |
Derivative liabilities, noncurrent | 0 | 260 |
Energy Services | Not Designated as Hedging Instrument | Foreign currency contracts | ||
Fair Value | ||
Derivative assets, current | 68 | 125 |
Derivative liabilities, current | 4 | 3 |
Derivative assets, noncurrent | 0 | 2 |
Derivative liabilities, noncurrent | $ 0 | $ 0 |
DERIVATIVE INSTRUMENTS - OFFSET
DERIVATIVE INSTRUMENTS - OFFSETTING OF ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Energy Services | ||
Derivative assets: | ||
Amounts Presented in Balance Sheets | $ 36,495 | $ 36,572 |
Offsetting Derivative Instruments | (10,159) | (34,191) |
Financial Collateral Received/Pledged | (200) | 19,832 |
Net Amounts | 26,136 | 22,213 |
Derivative liabilities: | ||
Amounts Presented in Balance Sheets | 45,066 | 100,613 |
Offsetting Derivative Instruments | (10,159) | (34,191) |
Financial Collateral Received/Pledged | 0 | 0 |
Net Amounts | 34,907 | 66,422 |
Energy Services | Physical commodity contracts | ||
Derivative assets: | ||
Amounts Presented in Balance Sheets | 2,420 | 3,151 |
Offsetting Derivative Instruments | (908) | (894) |
Financial Collateral Received/Pledged | (200) | (700) |
Net Amounts | 1,312 | 1,557 |
Derivative liabilities: | ||
Amounts Presented in Balance Sheets | 33,853 | 37,829 |
Offsetting Derivative Instruments | (908) | (894) |
Financial Collateral Received/Pledged | 0 | 0 |
Net Amounts | 32,945 | 36,935 |
Energy Services | Financial commodity contracts | ||
Derivative assets: | ||
Amounts Presented in Balance Sheets | 34,007 | 33,294 |
Offsetting Derivative Instruments | (9,247) | (33,294) |
Financial Collateral Received/Pledged | 0 | 20,532 |
Net Amounts | 24,760 | 20,532 |
Derivative liabilities: | ||
Amounts Presented in Balance Sheets | 11,209 | 62,781 |
Offsetting Derivative Instruments | (9,247) | (33,294) |
Financial Collateral Received/Pledged | 0 | 0 |
Net Amounts | 1,962 | 29,487 |
Energy Services | Foreign currency contracts | ||
Derivative assets: | ||
Amounts Presented in Balance Sheets | 68 | 127 |
Offsetting Derivative Instruments | (4) | (3) |
Financial Collateral Received/Pledged | 0 | |
Net Amounts | 64 | 124 |
Derivative liabilities: | ||
Amounts Presented in Balance Sheets | 4 | 3 |
Offsetting Derivative Instruments | (4) | (3) |
Financial Collateral Received/Pledged | 0 | 0 |
Net Amounts | 0 | 0 |
Natural Gas Distribution | ||
Derivative assets: | ||
Amounts Presented in Balance Sheets | 5,266 | 2,082 |
Offsetting Derivative Instruments | (240) | (21) |
Financial Collateral Received/Pledged | 0 | 0 |
Net Amounts | 5,026 | 2,061 |
Derivative liabilities: | ||
Amounts Presented in Balance Sheets | 244 | 29 |
Offsetting Derivative Instruments | (240) | (21) |
Financial Collateral Received/Pledged | 0 | 0 |
Net Amounts | 4 | 8 |
Natural Gas Distribution | Physical commodity contracts | ||
Derivative assets: | ||
Amounts Presented in Balance Sheets | 234 | 36 |
Offsetting Derivative Instruments | 0 | (8) |
Financial Collateral Received/Pledged | 0 | 0 |
Net Amounts | 234 | 28 |
Derivative liabilities: | ||
Amounts Presented in Balance Sheets | 4 | 16 |
Offsetting Derivative Instruments | 0 | (8) |
Financial Collateral Received/Pledged | 0 | 0 |
Net Amounts | 4 | 8 |
Natural Gas Distribution | Financial commodity contracts | ||
Derivative assets: | ||
Amounts Presented in Balance Sheets | 5,032 | 2,046 |
Offsetting Derivative Instruments | (240) | (13) |
Financial Collateral Received/Pledged | 0 | 0 |
Net Amounts | 4,792 | 2,033 |
Derivative liabilities: | ||
Amounts Presented in Balance Sheets | 240 | 13 |
Offsetting Derivative Instruments | (240) | (13) |
Financial Collateral Received/Pledged | 0 | 0 |
Net Amounts | $ 0 | $ 0 |
DERIVATIVE INSTRUMENTS - INCOME
DERIVATIVE INSTRUMENTS - INCOME STATEMENT RELATED DISCLOSURES (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (losses) gains recognized in income on derivatives | $ 62,844 | $ 48,153 |
Energy Services | Physical commodity contracts | Operating revenues | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (losses) gains recognized in income on derivatives | 150 | 5,252 |
Energy Services | Physical commodity contracts | Natural gas purchases | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (losses) gains recognized in income on derivatives | 1,505 | (5,054) |
Energy Services | Financial commodity contracts | Natural gas purchases | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (losses) gains recognized in income on derivatives | 61,189 | 47,755 |
Energy Services | Foreign currency contracts | Natural gas purchases | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (losses) gains recognized in income on derivatives | 0 | 200 |
Natural Gas Distribution | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (losses) gains recognized in income on derivatives | (12,951) | (3,930) |
Natural Gas Distribution | Physical commodity contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (losses) gains recognized in income on derivatives | 1,696 | 342 |
Natural Gas Distribution | Financial commodity contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (losses) gains recognized in income on derivatives | $ (14,647) | $ (4,272) |
DERIVATIVE INSTRUMENTS - ADDITI
DERIVATIVE INSTRUMENTS - ADDITIONAL INFORMATION (Details) certificate in Thousands, $ in Thousands | 3 Months Ended | ||
Dec. 31, 2021USD ($)certificate | Dec. 31, 2020USD ($) | Sep. 30, 2021USD ($)certificate | |
Treasury Lock | Interest expense | |||
Derivative [Line Items] | |||
Amount of pre-tax gain (loss) reclassified from OCI into income | $ (343) | $ (343) | |
Foreign currency contracts | |||
Derivative [Line Items] | |||
Notional amount | $ (63) | $ (123) | |
Physical commodity contracts | Energy Services | |||
Derivative [Line Items] | |||
Number of SRECs (in certificates) | certificate | 1,400 | 1,400 |
DERIVATIVE INSTRUMENTS - VOLUME
DERIVATIVE INSTRUMENTS - VOLUME (Details) - Bcf | 3 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Sep. 30, 2021 | |
Natural Gas Distribution | Long | Futures | ||
Derivative [Line Items] | ||
Notional amount | 24 | 22.2 |
Natural Gas Distribution | Long | Physical Commodity | ||
Derivative [Line Items] | ||
Notional amount | 1.5 | 7.6 |
Energy Services | Long | Physical Commodity | ||
Derivative [Line Items] | ||
Notional amount | (4.9) | 0.6 |
Energy Services | Short | Futures | ||
Derivative [Line Items] | ||
Notional amount | (22) | (13.4) |
Energy Services | Short | Swaps | ||
Derivative [Line Items] | ||
Notional amount | (0.2) | (0.3) |
DERIVATIVE INSTRUMENTS - BROKER
DERIVATIVE INSTRUMENTS - BROKER MARGIN DEPOSITS (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Natural Gas Distribution | Assets, Current | ||
Derivative [Line Items] | ||
Broker margin - Current assets | $ 5,358 | $ 2,790 |
Energy Services | Assets, Current | ||
Derivative [Line Items] | ||
Broker margin - Current assets | 37,358 | 70,050 |
Energy Services | Liabilities, Current | ||
Derivative [Line Items] | ||
Broker margin - Current assets | $ (15,475) | $ 0 |
DERIVATIVE INSTRUMENTS - CREDIT
DERIVATIVE INSTRUMENTS - CREDIT RISK EXPOSURE (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2021USD ($) | |
Credit Risk Exposure [Line Items] | |
Gross Credit Exposure | $ 250,602 |
Investment grade | |
Credit Risk Exposure [Line Items] | |
Gross Credit Exposure | 185,828 |
Noninvestment grade | |
Credit Risk Exposure [Line Items] | |
Gross Credit Exposure | 11,016 |
Internally rated investment grade | |
Credit Risk Exposure [Line Items] | |
Gross Credit Exposure | 23,742 |
Internally rated noninvestment grade | |
Credit Risk Exposure [Line Items] | |
Gross Credit Exposure | $ 30,016 |
FAIR VALUE - DEBT (Details)
FAIR VALUE - DEBT (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Finance leases | $ 35,100 | $ 20,100 |
NJR | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt issuance costs | 3,700 | 3,300 |
Natural Gas Distribution | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt issuance costs | 10,300 | 9,100 |
Level 2 | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 2,202,845 | 2,102,845 |
Level 2 | Fair market value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 2,373,791 | $ 2,288,544 |
FAIR VALUE - ADDITIONAL INFORMA
FAIR VALUE - ADDITIONAL INFORMATION (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Sep. 30, 2021 |
Solar Asset Financing | Fair market value | Clean Energy Ventures | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 131.5 | $ 132.5 |
FAIR VALUE - HIERARCHY (Details
FAIR VALUE - HIERARCHY (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other | $ 2,085 | $ 1,815 |
Total assets at fair value | 43,887 | 40,510 |
Total liabilities at fair value | 45,310 | 100,642 |
Physical commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 2,654 | 3,187 |
Liabilities | 33,857 | 37,845 |
Financial commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 39,039 | 35,340 |
Liabilities | 11,449 | 62,794 |
Foreign currency contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 68 | 127 |
Liabilities | 4 | 3 |
Quoted Prices in Active Markets for Identical Assets, (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other | 2,085 | 1,815 |
Total assets at fair value | 41,165 | 37,196 |
Total liabilities at fair value | 11,278 | 62,188 |
Quoted Prices in Active Markets for Identical Assets, (Level 1) | Physical commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets, (Level 1) | Financial commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 39,039 | 35,340 |
Liabilities | 11,278 | 62,188 |
Quoted Prices in Active Markets for Identical Assets, (Level 1) | Foreign currency contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other | 0 | 0 |
Total assets at fair value | 2,722 | 3,314 |
Total liabilities at fair value | 34,032 | 38,454 |
Significant Other Observable Inputs (Level 2) | Physical commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 2,654 | 3,187 |
Liabilities | 33,857 | 37,845 |
Significant Other Observable Inputs (Level 2) | Financial commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 171 | 606 |
Significant Other Observable Inputs (Level 2) | Foreign currency contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 68 | 127 |
Liabilities | 4 | 3 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other | 0 | 0 |
Total assets at fair value | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Physical commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Financial commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Foreign currency contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 0 | 0 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 41 | 41 |
Money market funds | Quoted Prices in Active Markets for Identical Assets, (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 41 | 41 |
Money market funds | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Money market funds | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 0 | $ 0 |
INVESTMENTS IN EQUITY INVESTE_3
INVESTMENTS IN EQUITY INVESTEES (Details) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2021USD ($)mi | Jun. 30, 2021USD ($) | Sep. 30, 2021USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||
Investments in equity investees | $ 114,249 | $ 114,529 | |
Other than temporary impairment | $ 92,000 | ||
Other than temporary impairment, net of tax | $ 74,500 | ||
PennEast | NJR Pipeline | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 20.00% | ||
Steckman Ridge | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments in equity investees | $ 108,770 | 109,050 | |
Total outstanding principal balance of loans | $ 70,400 | 70,400 | |
Ownership percentage | 50.00% | ||
PennEast | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments in equity investees | $ 5,479 | $ 5,479 | |
Ownership percentage | 20.00% | ||
Construction plan, project area (in miles) | mi | 120 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net income, as reported | $ 111,312 | $ 81,045 |
Basic earnings per share | ||
Weighted average shares of common stock outstanding-basic (in shares) | 95,944,000 | 96,114,000 |
Basic earnings per common share (usd per share) | $ 1.16 | $ 0.84 |
Diluted earnings per share | ||
Weighted average shares of common stock outstanding-basic (in shares) | 95,944,000 | 96,114,000 |
Incremental shares (in shares) | 412,000 | 301,000 |
Weighted average shares of common stock outstanding-diluted (in shares) | 96,356,000 | 96,415,000 |
Diluted earnings per common share (usd per share) | $ 1.16 | $ 0.84 |
Share-based Payment Arrangement | ||
Diluted earnings per share | ||
Anti-dilutive shares excluded from the calculation of diluted earnings per share (in shares) | 32,317 |
DEBT - CREDIT FACILITIES (Detai
DEBT - CREDIT FACILITIES (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Sep. 30, 2021 | |
NJR | Letter of Credit on Behalf of NJRES | ||
Line of Credit Facility [Line Items] | ||
Letters of credit outstanding, amount | $ 19,600,000 | $ 10,600,000 |
NJNG | Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Letters of credit outstanding, amount | $ 731,000 | 731,000 |
Revolving Credit Facility | NJR | ||
Line of Credit Facility [Line Items] | ||
Commitment fee percentage | 0.10% | |
Revolving Credit Facility | NJNG | ||
Line of Credit Facility [Line Items] | ||
Commitment fee percentage | 0.075% | |
Revolving Credit Facility | Committed Credit Facilities Due December 2023 | NJR | ||
Line of Credit Facility [Line Items] | ||
Bank revolving credit facilities | $ 500,000,000 | 500,000,000 |
Amount outstanding at end of period | $ 310,550,000 | $ 219,100,000 |
Weighted average interest rate at end of period | 1.13% | 1.05% |
Amount available at end of period | $ 169,862,000 | $ 270,312,000 |
Revolving Credit Facility | Committed Credit Facilities Due December 2023 | NJNG | ||
Line of Credit Facility [Line Items] | ||
Bank revolving credit facilities | 250,000,000 | 250,000,000 |
Amount outstanding at end of period | $ 177,400,000 | $ 158,200,000 |
Weighted average interest rate at end of period | 0.55% | 0.17% |
Amount available at end of period | $ 71,869,000 | $ 91,069,000 |
DEBT - LONG TERM DEBT (Details)
DEBT - LONG TERM DEBT (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Oct. 28, 2021 | |
Debt Instrument [Line Items] | |||
Proceeds from sale leaseback transaction | $ 17,300 | $ 0 | |
Proceeds from sale leaseback transaction - solar | 3,300 | 12,124 | |
Senior Notes | Natural Gas Distribution | |||
Debt Instrument [Line Items] | |||
Face amount | $ 100,000 | ||
Senior Notes | Natural Gas Distribution | Fixed Interest Rate Maturing 2051 | |||
Debt Instrument [Line Items] | |||
Face amount | $ 50,000 | ||
Stated interest rate | 2.97% | ||
Senior Notes | Natural Gas Distribution | Fixed Interest Rate Maturing 2061 | |||
Debt Instrument [Line Items] | |||
Face amount | $ 50,000 | ||
Stated interest rate | 3.07% | ||
Clean Energy Ventures | |||
Debt Instrument [Line Items] | |||
Proceeds from sale leaseback transaction - solar | $ 3,300 | 12,100 | |
Clean Energy Ventures | Minimum | |||
Debt Instrument [Line Items] | |||
Sale leaseback transaction lease term | 5 years | ||
Clean Energy Ventures | Maximum | |||
Debt Instrument [Line Items] | |||
Sale leaseback transaction lease term | 15 years | ||
Natural Gas Distribution | |||
Debt Instrument [Line Items] | |||
Proceeds from sale leaseback transaction | $ 17,300 | $ 0 | |
Payments for sale leaseback transaction | $ 1,100 |
EMPLOYEE BENEFIT PLANS - COMPON
EMPLOYEE BENEFIT PLANS - COMPONENTS OF NET PERIODIC COST (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Pension | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | $ 2,073 | $ 2,182 |
Interest cost | 2,408 | 2,278 |
Expected return on plan assets | (5,319) | (5,224) |
Recognized actuarial loss | 2,186 | 2,862 |
Prior service cost (credit) amortization | 25 | 25 |
Net periodic benefit cost | 1,373 | 2,123 |
OPEB | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | 1,076 | 1,211 |
Interest cost | 1,589 | 1,518 |
Expected return on plan assets | (1,894) | (1,683) |
Recognized actuarial loss | 1,421 | 1,977 |
Prior service cost (credit) amortization | (36) | (45) |
Net periodic benefit cost | $ 2,156 | $ 2,978 |
EMPLOYEE BENEFIT PLANS - ADDITI
EMPLOYEE BENEFIT PLANS - ADDITIONAL INFORMATION (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Pension | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Employer contributions | $ 0 | $ 0 |
OPEB | Minimum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Estimated future employer contributions | 5,000,000 | |
OPEB | Maximum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Estimated future employer contributions | $ 10,000,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | ||||||
Forecasted effective tax rate | 21.60% | 17.60% | ||||
Revaluation of deferred tax assets and liabilities | $ 166 | $ (76) | ||||
Actual effective tax rate | 21.70% | 17.70% | ||||
ITC carryforward | $ 226,100 | $ 224,200 | ||||
Effective term | 20 years | |||||
Potential net capital loss | $ 61,800 | |||||
Valuation allowance | 23,700 | 23,600 | ||||
Operating loss carryforward, valuation allowance | $ 17,300 | |||||
Investment tax credit, solar property, percentage | 26.00% | 26.00% | 30.00% | |||
Scenario, Forecast | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Investment tax credit, solar property, percentage | 10.00% | 22.00% | ||||
Capital Loss Carryforward | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Tax credit carryforward, valuation allowance | $ 6,400 | |||||
State | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Net operating loss carryforwards | $ 461,900 | $ 554,600 | ||||
State | Minimum | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Effective term | 7 years | |||||
State | Maximum | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Effective term | 20 years |
LEASES - ADDITIONAL INFORMATION
LEASES - ADDITIONAL INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | |
Lessee, Lease, Description [Line Items] | |||
ROU asset obtained in exchange for operating lease liability | $ 808 | $ 9,300 | |
ROU asset obtained in exchange for finance lease liability | $ 17,300 | $ 0 | |
Weighted average remaining lease term, operating lease | 29 years 8 months 12 days | 29 years 7 months 6 days | |
Operating lease, discount rate | 3.20% | 3.20% | |
Weighted average remaining lease term, finance lease | 4 years 8 months 12 days | 3 years 4 months 24 days | |
Finance lease, discount rate | 2.70% | 3.50% | |
Solar Property | Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract | 20 years | ||
Renewal term | 5 years | ||
Solar Property | Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract | 50 years | ||
Renewal term | 20 years | ||
Office Building | Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract | 2 years | ||
Office Building | Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract | 17 years | ||
Meter License | Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract | 7 years | ||
Meter License | Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract | 10 years | ||
Equipment | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract | 6 years | ||
Storage and Capacity | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract | 50 years |
LEASES - LEASE COST (Details)
LEASES - LEASE COST (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Operating lease cost | $ 2,119 | $ 2,089 |
Amortization of right-of-use assets | 396 | 1,246 |
Interest on lease liabilities | 80 | 221 |
Total finance lease cost | 476 | 1,467 |
Short-term lease cost | 11 | 127 |
Variable lease cost | 191 | 153 |
Total lease cost | $ 2,797 | $ 3,836 |
LEASES - SUPPLEMENTAL CASH FLOW
LEASES - SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Operating cash flows for operating leases | $ 2,037 | $ 1,737 |
Operating cash flows for finance leases | 170 | 2,176 |
Financing cash flows for finance leases | $ 2,275 | $ 5,997 |
LEASES - RIGHT-OF-USE ASSETS AN
LEASES - RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
NONCURRENT ASSETS | ||
Operating lease assets | $ 173,617 | $ 173,928 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Utility plant, at cost | Utility plant, at cost |
Finance lease assets | $ 23,286 | $ 13,489 |
Total lease assets | 196,903 | 187,417 |
Current | ||
Operating lease liabilities | $ 4,531 | $ 4,300 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current maturities of long-term debt | Current maturities of long-term debt |
Finance lease liabilities | $ 6,397 | $ 5,393 |
Noncurrent | ||
Operating lease liabilities | $ 141,356 | $ 141,363 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term debt | Long-term debt |
Finance lease liabilities | $ 28,673 | $ 14,742 |
Total lease liabilities | $ 180,957 | $ 165,798 |
COMMITMENTS AND CONTINGENT LI_3
COMMITMENTS AND CONTINGENT LIABILITIES - SCHEDULE OF FUTURE COMMITTED EXPENSES (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2021USD ($) | |
Long-term Purchase Commitment [Line Items] | |
Current charges recoverable through BGSS | $ 191,000 |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2022 | 312,523 |
2023 | 243,740 |
2024 | 179,876 |
2025 | 164,345 |
2026 | 145,545 |
Thereafter | 1,142,767 |
Energy Services | |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2022 | 165,993 |
2023 | 60,662 |
2024 | 28,957 |
2025 | 24,149 |
2026 | 17,586 |
Thereafter | 19,554 |
Energy Services | Natural gas purchases | |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2022 | 101,257 |
2023 | 1,857 |
2024 | 0 |
2025 | 0 |
2026 | 0 |
Thereafter | 0 |
Energy Services | Storage demand fees | |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2022 | 15,217 |
2023 | 12,177 |
2024 | 6,698 |
2025 | 5,018 |
2026 | 2,375 |
Thereafter | 906 |
Energy Services | Pipeline demand fees | |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2022 | 49,519 |
2023 | 46,628 |
2024 | 22,259 |
2025 | 19,131 |
2026 | 15,211 |
Thereafter | 18,648 |
Annual pipeline obligation to be paid over 10 year period | 4,000 |
Natural Gas Distribution | |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2022 | 146,530 |
2023 | 183,078 |
2024 | 150,919 |
2025 | 140,196 |
2026 | 127,959 |
Thereafter | 1,123,213 |
Natural Gas Distribution | Natural gas purchases | |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2022 | 7,668 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
2026 | 0 |
Thereafter | 0 |
Natural Gas Distribution | Storage demand fees | |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2022 | 34,738 |
2023 | 38,107 |
2024 | 17,743 |
2025 | 7,740 |
2026 | 2,171 |
Thereafter | 1,879 |
Natural Gas Distribution | Pipeline demand fees | |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2022 | 104,124 |
2023 | 144,971 |
2024 | 133,176 |
2025 | 132,456 |
2026 | 125,788 |
Thereafter | $ 1,121,334 |
Minimum | Energy Services | |
Long-term Purchase Commitment [Line Items] | |
Storage and pipeline capacity, contract term | 1 year |
Maximum | Energy Services | |
Long-term Purchase Commitment [Line Items] | |
Storage and pipeline capacity, contract term | 10 years |
COMMITMENTS AND CONTINGENT LI_4
COMMITMENTS AND CONTINGENT LIABILITIES - LEGAL PROCEEDINGS (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Apr. 07, 2021 | Sep. 09, 2020 | Dec. 31, 2021 |
Site Contingency [Line Items] | ||||
Manufactured gas plant remediation | $ 135,012 | $ 126,872 | ||
Recovery from third party of environmental remediation cost, period | 7 years | |||
Regulatory assets | 522,099 | $ 528,074 | ||
Expended, net of recoveries | ||||
Site Contingency [Line Items] | ||||
Regulatory assets | 64,700 | |||
RAC | ||||
Site Contingency [Line Items] | ||||
Approved rate, amount | $ 11,100 | $ 9,700 | ||
Approved rate increase (decrease), amount | $ 2,000 | |||
Minimum | ||||
Site Contingency [Line Items] | ||||
Product liability contingency, loss exposure in excess of accrual, best estimate | 115,700 | |||
Maximum | ||||
Site Contingency [Line Items] | ||||
Product liability contingency, loss exposure in excess of accrual, best estimate | $ 178,700 |
REPORTING SEGMENT AND OTHER O_3
REPORTING SEGMENT AND OTHER OPERATIONS DATA - RECONCILIATION OF SEGMENT INCOME TO CONSOLIDATED (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Utility | $ 274,435 | $ 195,729 |
Nonutility | 401,407 | 258,576 |
Operating revenues | 675,842 | 454,305 |
Depreciation and amortization | 30,393 | 27,362 |
Interest income | 501 | 669 |
Interest expense, net of capitalized interest | 19,477 | 19,786 |
Income tax provision (benefit) | 30,807 | 17,441 |
Impairment of equity method investment | 575 | 2,675 |
Net financial earnings (loss) | 65,770 | 44,657 |
Capital expenditures | 164,298 | 109,880 |
Investments in equity investees | 0 | 286 |
Energy Services | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 22,100 | |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 666,342 | 444,680 |
Depreciation and amortization | 30,287 | 27,284 |
Interest income | 570 | 776 |
Interest expense, net of capitalized interest | 19,233 | 18,670 |
Income tax provision (benefit) | 32,006 | 18,049 |
Net financial earnings (loss) | 64,788 | 44,201 |
Capital expenditures | 164,219 | 109,194 |
Operating Segments | Natural Gas Distribution, External Customers | ||
Segment Reporting Information [Line Items] | ||
Utility | 274,435 | 195,729 |
Operating Segments | Clean Energy Ventures | ||
Segment Reporting Information [Line Items] | ||
Nonutility | 10,183 | 6,370 |
Operating revenues | 10,183 | 6,370 |
Depreciation and amortization | 5,233 | 5,433 |
Interest expense, net of capitalized interest | 5,427 | 5,034 |
Income tax provision (benefit) | (2,046) | (3,086) |
Net financial earnings (loss) | (6,821) | (10,274) |
Capital expenditures | 25,380 | 22,335 |
Operating Segments | Energy Services | ||
Segment Reporting Information [Line Items] | ||
Nonutility | 365,788 | 227,349 |
Operating revenues | 365,788 | 227,349 |
Depreciation and amortization | 28 | 42 |
Interest expense, net of capitalized interest | 675 | 680 |
Income tax provision (benefit) | 20,505 | 12,122 |
Net financial earnings (loss) | 17,567 | 1,500 |
Operating Segments | Storage and Transportation | ||
Segment Reporting Information [Line Items] | ||
Nonutility | 11,584 | 12,447 |
Operating revenues | 11,584 | 12,447 |
Depreciation and amortization | 2,133 | 2,640 |
Interest income | 377 | 694 |
Interest expense, net of capitalized interest | 2,136 | 3,982 |
Income tax provision (benefit) | 343 | 646 |
Impairment of equity method investment | 1,056 | 3,193 |
Net financial earnings (loss) | 2,962 | 3,508 |
Capital expenditures | 65,375 | 7,613 |
Investments in equity investees | 0 | 286 |
Operating Segments | Natural Gas Distribution | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 274,435 | 195,729 |
Depreciation and amortization | 22,893 | 19,169 |
Interest income | 193 | 82 |
Interest expense, net of capitalized interest | 10,995 | 8,974 |
Income tax provision (benefit) | 13,204 | 8,367 |
Net financial earnings (loss) | 51,080 | 49,467 |
Capital expenditures | 73,464 | 79,246 |
Intercompany | ||
Segment Reporting Information [Line Items] | ||
Nonutility | 99 | 167 |
Intercompany | Natural Gas Distribution, External Customers | ||
Segment Reporting Information [Line Items] | ||
Utility | 337 | 0 |
Intercompany | Energy Services | ||
Segment Reporting Information [Line Items] | ||
Nonutility | 3,456 | 2,128 |
Intercompany | Storage and Transportation | ||
Segment Reporting Information [Line Items] | ||
Nonutility | 559 | 657 |
Home Services and Other | ||
Segment Reporting Information [Line Items] | ||
Nonutility | 13,852 | 12,410 |
Operating revenues | 13,852 | 12,410 |
Depreciation and amortization | 204 | 260 |
Interest income | 155 | 132 |
Interest expense, net of capitalized interest | 244 | 1,116 |
Income tax provision (benefit) | 246 | 118 |
Net financial earnings (loss) | 447 | (62) |
Capital expenditures | 79 | 686 |
Eliminations | ||
Segment Reporting Information [Line Items] | ||
Nonutility | (4,451) | (2,952) |
Depreciation and amortization | (98) | (182) |
Interest income | (224) | (239) |
Income tax provision (benefit) | (1,445) | (726) |
Impairment of equity method investment | (481) | (518) |
Net financial earnings (loss) | $ 535 | $ 518 |
REPORTING SEGMENT AND OTHER O_4
REPORTING SEGMENT AND OTHER OPERATIONS DATA - RECONCILIATION OF SEGMENT ASSETS TO CONSOLIDATED (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 5,981,157 | $ 5,722,278 |
Operating Segments | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 6,121,333 | 5,850,079 |
Operating Segments | Natural Gas Distribution | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 3,861,240 | 3,707,461 |
Operating Segments | Clean Energy Ventures | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 937,696 | 914,788 |
Operating Segments | Energy Services | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 393,744 | 365,423 |
Operating Segments | Storage and Transportation | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 928,653 | 862,407 |
Home Services and Other | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 148,368 | 162,134 |
Intercompany Assets | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ (288,544) | $ (289,935) |
REPORTING SEGMENT AND OTHER O_5
REPORTING SEGMENT AND OTHER OPERATIONS DATA - NET FINANCIAL EARNINGS (LOSS) RECONCILIATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting [Abstract] | ||
Net financial earnings (loss) | $ 65,770 | $ 44,657 |
Less: | ||
Unrealized (gain) on derivative instruments and related transactions | (82,191) | (37,491) |
Tax effect | 19,536 | 8,913 |
Effects of economic hedging related to natural gas inventory | 23,577 | (7,532) |
Tax effect | (5,603) | 1,790 |
NFE tax adjustment | (861) | (2,068) |
NET INCOME | $ 111,312 | $ 81,045 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | Apr. 01, 2020USD ($)Bcf | Mar. 31, 2021 | Dec. 31, 2021USD ($)dth / dleaseBcf | Dec. 31, 2020USD ($) | Sep. 30, 2021USD ($) | Jul. 31, 2021 |
Related Party Transaction [Line Items] | ||||||
Demand fees expense recognized pertaining to related party agreement | $ 1,846 | $ 1,734 | ||||
Demand fees payable | $ 851 | $ 861 | ||||
Number of asset management agreements | lease | 1 | |||||
NJNG to NJRES Affiliate | ||||||
Related Party Transaction [Line Items] | ||||||
Asset management agreement, period | 5 years | |||||
NJNG to Steckman RIdge Affiliate | ||||||
Related Party Transaction [Line Items] | ||||||
Natural gas sold at cost under asset management agreement (in Bcf) | Bcf | 3 | |||||
Approximate annual demand fees under agreement | $ 9,300 | |||||
Demand fees expense recognized pertaining to related party agreement | $ 1,558 | 1,568 | ||||
Demand fees payable | 775 | 778 | ||||
NJRES to Steckman Ridge Affiliate | ||||||
Related Party Transaction [Line Items] | ||||||
Demand fees expense recognized pertaining to related party agreement | 288 | $ 166 | ||||
Demand fees payable | $ 76 | $ 83 | ||||
NJN G to Adelphia Affiliate | ||||||
Related Party Transaction [Line Items] | ||||||
Transportation precedent agreement term | 5 years | |||||
Transportation capacity under precedent agreement with PennEast (in bcf per day) | dth / d | 130,000 | |||||
Leaf River Energy Center LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Natural gas sold at cost under asset management agreement (in Bcf) | Bcf | 3 | |||||
Storage capacity agreement term | 5 years | |||||
NJNG and Clean Energy Ventures to PPA | ||||||
Related Party Transaction [Line Items] | ||||||
Sublease agreement term | 15 years | |||||
NJNG To NJR Subsidiaries | ||||||
Related Party Transaction [Line Items] | ||||||
Term of contract | 16 years |