FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2021

Financial Instruments, Owned, at Fair Value [Abstract]

FINANCIAL INSTRUMENTS:

RESTRICTED INVESTMENTS — SJI and SJG maintain margin accounts with certain counterparties to support their risk management activities associated with hedging commodities. The balances required to be held in these margin accounts increase as the net value of the outstanding energy-related contracts with the respective counterparties decrease.

The following table provides SJI's (including SJG) and SJG's balances of Restricted Investments as well as presents a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that total to the amounts shown in the consolidated statements of cash flows (in thousands):


	As of December 31, 2021
Balance Sheet Line Item	SJI		SJG
Cash and Cash Equivalents	$	28,754	$	3,360
Restricted Investments	686		686
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	29,440	$	4,046


	As of December 31, 2020
Balance Sheet Line Item	SJI		SJG
Cash and Cash Equivalents	$	34,045	$	1,598
Restricted Investments	7,786		4,826
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	41,831	$	6,424

The carrying amounts of the Restricted Investments for both SJI and SJG approximate their fair values at December 31, 2021 and 2020, which would be included in Level 1 of the fair value hierarchy (see Note 17).

ALLOWANCE FOR CREDIT LOSSES - Accounts receivable and unbilled revenues are recorded gross on the consolidated balance sheets with allowance for credit losses shown as a separate line item titled Provision for Uncollectibles. A summary of changes in the allowance for credit losses for the years ended December 31, 2021 and 2020 are as follows (in thousands):


	2021		2020
SJI (includes SJG and all other consolidated subsidiaries):
Balance at beginning of period	$	30,582	$	19,829
Provision for expected credit losses	10,159		9,558
Regulated assets (A)	7,012		10,953
Recoveries of accounts previously written off	592		909
Uncollectible accounts written off	(6,582)		(10,667)
Balance at end of period	$	41,763	$	30,582

SJG:
Balance at beginning of period	$	17,359	$	14,032
Provision for expected credit losses	7,794		6,209
Regulated assets (A)	3,119		4,845
Recoveries of accounts previously written off	160		424
Uncollectible accounts written off	(3,266)		(8,151)
Balance at end of period	$	25,166	$	17,359

(A) Deferral of incremental costs related to the COVID-19 pandemic as a regulatory asset, resulting from a July 2, 2020 BPU Order (see Note 11).

NOTES RECEIVABLE-AFFILIATES - The carrying amounts of the Note Receivable-Affiliate balances approximate their fair values at December 31, 2021 and 2020, which would be included in Level 2 of the fair value hierarchy (see Note 17). See Note 3 for more detail on these balances.

CONTRACT RECEIVABLES — SJG provides financing to customers for the purpose of attracting conversions to natural gas heating systems from competing fuel sources. The terms of these loans call for customers to make monthly payments over periods ranging from five to ten years, with no interest. The carrying amounts of such loans were $1.7 million and $2.5 million as of December 31, 2021 and 2020, respectively. The current portion of these receivables is reflected in Accounts Receivable and the noncurrent portion is reflected in Contract Receivables on the consolidated balance sheets. The carrying amounts noted above are net of unamortized discounts resulting from imputed interest. The amount of such discounts and the annualized amortization to interest is not material to SJI's or SJG's consolidated financial statements.

In addition, as part of the EET programs, SJG and ETG provide financing to customers to upgrade equipment for the purpose of promoting energy efficiency. The terms of these loans range from two to ten years. The carrying amounts of such loans for SJG were $55.4 million and $46.4 million as of December 31, 2021 and 2020, respectively. The carrying amounts of such loans for ETG were not material at December 31, 2021. On the consolidated balance sheets of SJI and SJG, the current portion of EET loans receivable totaled $11.1 million and $6.4 million as of December 31, 2021 and 2020, respectively, and is reflected in Accounts Receivable; and the noncurrent portion totaled $44.3 million and $40.0 million as of December 31, 2021 and 2020, respectively, and is reflected in Contract Receivables. Given the risk of uncollectibility is low due to the oversight and preapproval required by the BPU, no allowance for credit loss has been recognized on the above-mentioned receivables.

There have been no material impacts to this risk of uncollectibility as a result of COVID-19.

The carrying amounts of these receivables approximate their fair value at December 31, 2021 and 2020, which would be included in Level 2 of the fair value hierarchy (see Note 17).

CREDIT RISK - As of December 31, 2021, there were no individual counterparties that totaled more than five percent of SJI's current and noncurrent Derivatives - Energy Related Assets.

FINANCIAL INSTRUMENTS NOT CARRIED AT FAIR VALUE - The fair value of a financial instrument is the market price to sell an asset or transfer a liability at the measurement date. The carrying amounts of SJI's and SJG's financial instruments approximate their fair values at December 31, 2021 and 2020, except as noted below (in thousands):


	2021		2020
SJI (includes SJG and all consolidated entities)
Estimated fair values of long-term debt	$	3,653,868	$	3,152,224

Carrying amounts of long-term debt, including current maturities (A)	$	3,255,085	$	2,919,201
Net of:
Unamortized debt issuance costs	$	38,462	$	29,574
Unamortized debt discounts	$	5,135	$	5,224

SJG
Estimated fair values of long-term debt	$	1,171,657	$	1,197,052

Carrying amounts of long-term debt, including current maturities	$	1,041,811	$	1,069,089
Net of:
Unamortized debt issuance costs	$	8,726	$	9,357

(A) SJI Long-Term Debt on the consolidated balance sheet as of December 31, 2021 and December 21, 2020 includes $5.6 million and $3.1 million of finance leases, respectively. See Note 9.

For Long-Term Debt (including current maturities), in estimating the fair value, SJI and SJG use the present value of remaining cash flows at the balance sheet date. SJI and SJG based the estimates on interest rates available at the end of each period for debt with similar terms and maturities (Level 2 in the fair value hierarchy, see Note 17).