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REGULATORY ASSETS AND REGULATORY LIABILITIES
 9 Months Ended
Sep. 30, 2021
Regulatory Assets and Liabilities Disclosure [Abstract]  
REGULATORY ASSETS AND REGULATORY LIABILITIES REGULATORY ASSETS AND REGULATORY LIABILITIES:
Except as described below, there have been no significant changes to the nature or balances of the Utilities' regulatory assets and liabilities since December 31, 2020, which are described in Note 11 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2020.

The Utilities' Regulatory Assets as of September 30, 2021 and December 31, 2020 consisted of the following items (in thousands):
September 30, 2021
SJGETGTotal SJI
Environmental Remediation Costs:
Expended - Net$153,080 $13,909 $166,989 
Liability for Future Expenditures100,209 77,565 177,774 
   Insurance Recovery Receivables— (6,807)(6,807)
Deferred ARO Costs46,412 30,807 77,219 
Deferred Pension Costs - Unrecognized Prior Service Cost— 31,692 31,692 
Deferred Pension and Other Postretirement Benefit Costs77,426 8,466 85,892 
Deferred Gas Costs - Net20,301 — 20,301 
CIP Receivable6,827 — 6,827 
SBC Receivable (excluding RAC)5,018 — 5,018 
Deferred Interest Rate Contracts8,027 — 8,027 
EET/EEP17,764 5,472 23,236 
Pipeline Supplier Service Charges365 — 365 
Pipeline Integrity Cost6,612 — 6,612 
AFUDC - Equity Related Deferrals12,155 — 12,155 
WNC— 5,497 5,497 
Other Regulatory Assets25,888 22,802 48,690 
Total Regulatory Assets$480,084 $189,403 $669,487 
December 31, 2020
SJGETGTotal SJI
Environmental Remediation Costs:
Expended - Net$157,340 $5,196 $162,536 
Liability for Future Expenditures101,243 91,837 193,080 
   Insurance Recovery Receivables— (6,807)(6,807)
Deferred ARO Costs42,365 25,453 67,818 
Deferred Pension Costs - Unrecognized Prior Service Cost— 33,898 33,898 
Deferred Pension and Other Postretirement Benefit Costs77,426 8,466 85,892 
Deferred Gas Costs - Net19,178 — 19,178 
CIP Receivable21,013 — 21,013 
SBC Receivable (excluding RAC)3,453 — 3,453 
Deferred Interest Rate Contracts9,938 — 9,938 
EET/EEP18,725 3,062 21,787 
Pipeline Supplier Service Charges434 — 434 
Pipeline Integrity Cost6,091 — 6,091 
AFUDC - Equity Related Deferrals11,822 — 11,822 
WNC— 7,444 7,444 
Other Regulatory Assets26,056 10,359 36,415 
Total Regulatory Assets$495,084 $178,908 $673,992 

Except where noted below, all regulatory assets are or are expected to be recovered through utility rate charges, as detailed in the following discussion. The Utilities are currently permitted to recover interest on Environmental Remediation Costs, SBC Receivable, EET and Pipeline Integrity Costs, while the other assets are being recovered without a return on investment.

ENVIRONMENTAL REMEDIATION COSTS - SJG and ETG have regulatory assets associated with environmental costs related to the cleanup of environmental sites as discussed in Note 15 of SJI's and SJG's Annual Report on Form 10-K for the year ended December 31, 2020. The BPU allows SJG and ETG to recover the deferred costs not recovered from insurance carriers through their RAC mechanisms over seven-year periods after the costs are incurred.

DEFERRED ARO COSTS - The Utilities record AROs primarily related to the legal obligation to cut and cap gas distribution pipelines when taking those pipelines out of service. Deferred ARO costs represent the period to period passage of time (accretion) and the revision of originally estimated cash flows to settle the retirement obligation. The increase from December 31, 2020 to September 30, 2021 is due to retirement costs, inflation and discount rates used to measure the expected retirement costs. There is no impact on earnings as a result of these changes.

DEFERRED GAS COSTS - NET - Over/under collections of gas costs are monitored through SJG's and ETG's BGSS clause. SJG's balance as of December 31, 2020 included $22.9 million of costs related to a previous pricing dispute on a long-term gas supply contract. As of June 1, 2021, SJG has begun to recover these costs from its customers through the BGSS clause. SJG’s deferred gas costs-net are currently in an under-collected position, resulting in a regulatory asset. ETG's deferred gas costs-net are over-recovered at September 30, 2021, resulting in a regulatory liability.

CIP RECEIVABLE - The CIP tracking mechanism at SJG adjusts earnings when the actual usage per customer experienced during the period varies from an established baseline usage per customer. Actual usage per customer was more than the established baseline during the first nine months of 2021, resulting in a reduction of the regulatory asset at September 30, 2021 as compared to December 31, 2020. This is primarily the result of colder than normal weather experienced in the region.

OTHER REGULATORY ASSETS - The increase from December 31, 2020 to September 30, 2021 is primarily related to incremental costs incurred related to the impacts to our business from the COVID-19 pandemic. On July 2, 2020, the BPU issued an Order authorizing New Jersey's regulated utilities to create a COVID-19-related regulatory asset by deferring on their books and records the prudently incurred incremental costs related to COVID-19 beginning on March 9, 2020 and continuing through September 30, 2021, or 60 days after the termination of the public health emergency, whichever is later. On September 14, 2021, the BPU extended this period to December 31, 2022. The Company is required to file quarterly reports with the BPU,
along with a petition of recovery of such incremental costs with the BPU by December 31, 2022 or within 60 days of the close of the tracking period, whichever is later. As of September 30, 2021 and December 31, 2020, ETG deferred $12.3 million and $5.8 million, respectively, and SJG deferred $7.6 million and $4.7 million, respectively, of incremental costs principally related to expected credit losses from uncollectibles as a result of the COVID-19 pandemic, specifically related to changes in payment patterns observed to date and consideration of macroeconomic factors. We have deemed these costs to be probable of recovery.

The Utilities Regulatory Liabilities as of September 30, 2021 and December 31, 2020 consisted of the following items (in thousands):
September 30, 2021
SJGETGTotal SJI
Excess Plant Removal Costs$12,160 $33,992 $46,152 
Excess Deferred Taxes211,020 111,724 322,744 
Deferred Gas Costs - Net— 44,482 44,482 
Amounts to be Refunded to Customers— 3,379 3,379 
Other Regulatory Liabilities— 1,665 1,665 
Total Regulatory Liabilities$223,180 $195,242 $418,422 
December 31, 2020
 SJGETGTotal SJI
Excess Plant Removal Costs$12,666 $37,953 $50,619 
Excess Deferred Taxes232,694 113,888 346,582 
Deferred Gas Costs - Net— 15,322 15,322 
Amounts to be Refunded to Customers— 6,969 6,969 
Other Regulatory Liabilities— 1,085 1,085 
Total Regulatory Liabilities$245,360 $175,217 $420,577 


EXCESS DEFERRED TAXES - This liability is recognized as a result of Tax Reform enacted into law on December 22, 2017. The decrease in these liabilities for SJI and SJG from December 31, 2020 to September 30, 2021 is related to excess tax amounts returned to customers through customer billings. See Note 10 of SJI's and SJG's Annual Report on Form 10-K for the year ended December 31, 2020.
DEFERRED GAS COSTS - NET - Over/under collections of gas costs are monitored through ETG's BGSS mechanism. Net under collected gas costs are classified as a regulatory asset and net over collected gas costs are classified as a regulatory liability. Derivative contracts used to hedge natural gas purchase are also included in the BGSS, subject to BPU approval. The increase from December 31, 2020 to September 30, 2021 is primarily driven by the change in the value of the energy related derivative contracts.