INVESTMENTS IN EQUITY INVESTEES

Investments in equity investees includes NJR's equity method and cost method investments.

Equity Method Investments

During the fourth quarter of fiscal 2014, NJR, through a subsidiary, NJR Pipeline Company, formed PennEast with four other investors, with another investor joining in October 2014, plans to construct and operate a 108-mile pipeline that will extend from northeast Pennsylvania to western New Jersey.

As of September 30, NJR's equity method investments include the following:



(Thousands)	2014		2013
Steckman Ridge ⁽¹⁾	$	128,413	$	129,707
Iroquois	24,042		23,084
PennEast	555		—
Total	$	153,010	$	152,791

(1)Includes loans with a total outstanding principal balance of $70.4 million for both fiscal 2014 and 2013, which accrue interest at a variable rate that resets quarterly and are due October 1, 2023.

NJRES and NJNG have entered into transportation, storage and park and loan agreements with Steckman Ridge and Iroquois. In addition, NJNG has entered into a precedent capacity agreement with PennEast with an estimated service date of November 1, 2017. See Note 15. Related Party Transactions for more information on these intercompany transactions.

Cost Method Investments

In fiscal 2012, NJR invested $8.8 million in OwnEnergy, a developer of onshore wind projects, for an 18.7 percent ownership interest and the option, but not the obligation, to purchase certain qualified projects.

During fiscal 2014, NJRCEV agreed to acquire the development rights to the following onshore wind farms from OwnEnergy:


•	a $21.2 million 9.7 MW project in Two Dot, Montana that was completed in June 2014; and


•	a $42 million, 20 MW project in Carroll County, Iowa that is currently under construction and expected to be operational in the second quarter of fiscal 2015.

Accordingly, NJRCEV reclassified $2.4 million associated with the wind purchase option from its investment to property, plant and equipment on the Consolidated Balance Sheets, which represents the costs associated with the rights to develop the projects above.

During the fourth quarter of fiscal 2014, due to its concerns surrounding the ability of OwnEnergy to fulfill its future obligation to present qualified projects to NJRCEV for investment, the Company reassessed the value of its cost method investment, as well as remaining value of its wind purchase option and determined that it was other-than-temporarily impaired. As a result, NJRCEV recognized an impairment loss of $6.4 million, $3.8 million after tax, which is included in other income, net on the Consolidated Statements of Operations.

On October 9, 2014, NJRCEV also acquired the development rights to an $85 million, 48 MW wind project in Rush County, Kansas that is currently under construction and is expected to commence commercial operation in the first quarter of fiscal 2016.