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DERIVATIVE INSTRUMENTS (Tables)
 3 Months Ended
Dec. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Fair Value of Derivative Assets and Liabilities
The following table reflects the fair value of NJR's derivative assets and liabilities recognized on the Unaudited Condensed Consolidated Balance Sheets as of:
 
 
 
Fair Value
 
 
December 31, 2017
 
September 30, 2017
(Thousands)
Balance Sheet Location
Asset
Derivatives
Liability
Derivatives
Asset
Derivatives
Liability
Derivatives
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
Natural Gas Distribution:
 
 
 
 
 
 
 
 
 
Physical commodity contracts
Derivatives - current
 
$
487

 
$
53

 
$
151

 
$
72

Financial commodity contracts
Derivatives - current
 
—

 
3,478

 
—

 
1,149

Interest rate contracts
Derivatives - current
 
—

 
12,534

 
—

 
8,467

Energy Services:
 
 
 
 
 
 
 
 
 
Physical commodity contracts
Derivatives - current
 
13,247

 
24,531

 
14,588

 
16,589

 
Derivatives - noncurrent
 
2,801

 
14,256

 
7,127

 
8,710

Financial commodity contracts
Derivatives - current
 
32,559

 
56,188

 
15,302

 
20,267

 
Derivatives - noncurrent
 
2,706

 
11,477

 
2,033

 
2,620

Foreign currency contracts
Derivatives - current
 
6

 
4

 
40

 
—

 
Derivatives - noncurrent
 
30

 
26

 
4

 
—

Total fair value of derivatives
 
 
$
51,836

 
$
122,547

 
$
39,245

 
$
57,874
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, 2017:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
16,048

 
$
(3,137
)
 
$
(200
)
 
$
12,711

Financial commodity contracts
 
35,265

 
(29,434
)
 
(5,327
)
 
504

Foreign currency contracts
 
36

 
(30
)
 
—

 
6

Total Energy Services
 
$
51,349

 
$
(32,601
)
 
$
(5,527
)
 
$
13,221

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
487

 
$
(25
)
 
$
—

 
$
462

Total Natural Gas Distribution
 
$
487

 
$
(25
)
 
$
—

 
$
462

Derivative liabilities:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
38,787

 
$
(3,137
)
 
$
—

 
$
35,650

Financial commodity contracts
 
67,665

 
(29,434
)
 
(38,231
)
 
—

Foreign currency contracts
 
30

 
(30
)
 
—

 
—

Total Energy Services
 
$
106,482

 
$
(32,601
)
 
$
(38,231
)
 
$
35,650

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
53

 
$
(25
)
 
$
—

 
$
28

Financial commodity contracts
 
3,478

 
—

 
(3,478
)
 
—

Interest rate contracts
 
12,534

 
—

 
—

 
12,534

Total Natural Gas Distribution
 
$
16,065

 
$
(25
)
 
$
(3,478
)
 
$
12,562

As of September 30, 2017:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
21,715

 
$
(2,173
)
 
$
(200
)
 
$
19,342

Financial commodity contracts
 
17,335

 
(14,121
)
 
—

 
3,214

Foreign currency contracts
 
44

 
—

 
—

 
44

Total Energy Services
 
$
39,094

 
$
(16,294
)
 
$
(200
)
 
$
22,600

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
151

 
$
(20
)
 
$
—

 
$
131

Total Natural Gas Distribution
 
$
151

 
$
(20
)
 
$
—

 
$
131

Derivative liabilities:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
25,299

 
$
(2,173
)
 
$
—

 
$
23,126

Financial commodity contracts
 
22,887

 
(14,121
)
 
(8,766
)
 
—

Total Energy Services
 
$
48,186

 
$
(16,294
)
 
$
(8,766
)
 
$
23,126

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
72

 
$
(20
)
 
$
—

 
$
52

Financial commodity contracts
 
1,149

 
—

 
(1,149
)
 
—

Interest rate contracts
 
8,467

 
—

 
—

 
8,467

Total Natural Gas Distribution
 
$
9,688

 
$
(20
)
 
$
(1,149
)
 
$
8,519

(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, 2017:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
16,048

 
$
(3,137
)
 
$
(200
)
 
$
12,711

Financial commodity contracts
 
35,265

 
(29,434
)
 
(5,327
)
 
504

Foreign currency contracts
 
36

 
(30
)
 
—

 
6

Total Energy Services
 
$
51,349

 
$
(32,601
)
 
$
(5,527
)
 
$
13,221

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
487

 
$
(25
)
 
$
—

 
$
462

Total Natural Gas Distribution
 
$
487

 
$
(25
)
 
$
—

 
$
462

Derivative liabilities:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
38,787

 
$
(3,137
)
 
$
—

 
$
35,650

Financial commodity contracts
 
67,665

 
(29,434
)
 
(38,231
)
 
—

Foreign currency contracts
 
30

 
(30
)
 
—

 
—

Total Energy Services
 
$
106,482

 
$
(32,601
)
 
$
(38,231
)
 
$
35,650

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
53

 
$
(25
)
 
$
—

 
$
28

Financial commodity contracts
 
3,478

 
—

 
(3,478
)
 
—

Interest rate contracts
 
12,534

 
—

 
—

 
12,534

Total Natural Gas Distribution
 
$
16,065

 
$
(25
)
 
$
(3,478
)
 
$
12,562

As of September 30, 2017:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
21,715

 
$
(2,173
)
 
$
(200
)
 
$
19,342

Financial commodity contracts
 
17,335

 
(14,121
)
 
—

 
3,214

Foreign currency contracts
 
44

 
—

 
—

 
44

Total Energy Services
 
$
39,094

 
$
(16,294
)
 
$
(200
)
 
$
22,600

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
151

 
$
(20
)
 
$
—

 
$
131

Total Natural Gas Distribution
 
$
151

 
$
(20
)
 
$
—

 
$
131

Derivative liabilities:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
25,299

 
$
(2,173
)
 
$
—

 
$
23,126

Financial commodity contracts
 
22,887

 
(14,121
)
 
(8,766
)
 
—

Total Energy Services
 
$
48,186

 
$
(16,294
)
 
$
(8,766
)
 
$
23,126

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
72

 
$
(20
)
 
$
—

 
$
52

Financial commodity contracts
 
1,149

 
—

 
(1,149
)
 
—

Interest rate contracts
 
8,467

 
—

 
—

 
8,467

Total Natural Gas Distribution
 
$
9,688

 
$
(20
)
 
$
(1,149
)
 
$
8,519

(1)
Derivative assets and liabilities are presented on a gross basis on the balance sheet as the Company does not elect balance sheet offsetting under ASC 210-20.
(2)
Includes transactions with NAESB netting election, transactions held by FCMs with net margining and transactions with ISDA netting.
(3)
Financial collateral includes cash balances at FCMs as well as cash received from or pledged to other counterparties.
(4)
Net amounts represent presentation of derivative assets and liabilities if the Company were to elect balance sheet offsetting under ASC 210-20.
Effect of Derivative Instruments on Consolidated Statements of Operations
The following table reflects the effect of derivative instruments on the Unaudited Condensed Consolidated Statements of Operations as of:
(Thousands)
Location of gain (loss) recognized in income on derivatives
Amount of gain (loss) recognized
in income on derivatives
 
 
Three Months Ended
 
 
December 31,
Derivatives not designated as hedging instruments:
2017
 
2016
Energy Services:
 
 
 
 
Physical commodity contracts
Operating revenues
$
1,210

 
$
1,743

Physical commodity contracts
Gas purchases
(22,697
)
 
(8,799
)
Financial commodity contracts
Gas purchases
(25,997
)
 
(30,611
)
Foreign currency contracts
Gas purchases
(48
)
 
(86
)
Total unrealized and realized gains (losses)
$
(47,532
)
 
$
(37,753
)
Effect of Derivative Instruments Designated as Cash Flow Hedges on OCI
The following table reflects the (losses) gains associated with NJNG's derivative instruments as of:
 
Three Months Ended
 
December 31,
(Thousands)
2017
 
2016
Natural Gas Distribution:
 
 
 
Physical commodity contracts
$
(2,976
)
 
$
1,050

Financial commodity contracts
(8,808
)
 
11,178

Interest rate contracts
(4,067
)
 
20,371

Total unrealized and realized (losses) gains
$
(15,851
)
 
$
32,599
Schedule of Outstanding Long (Short) Derivatives
NJNG and Energy Services had the following outstanding long (short) derivatives as of:
 
 
 
Volume (Bcf)
 
 
 
December 31,
2017
 
September 30,
2017
Natural Gas Distribution
Futures
 
20.4

 
18.2

 
Physical
 
26.8

 
32.1

Energy Services
Futures
 
(33.4
)
 
(16.4
)
 
Physical
 
(4.6
)
 
(13.1
)
Schedule of Broker Margin Accounts by Company
The balances are as follows:
(Thousands)
Balance Sheet Location
December 31,
2017
September 30,
2017
Natural Gas Distribution
Broker margin - Current assets
$
4,632

$
2,661

Energy Services
Broker margin - Current assets
$
48,218

$
23,166
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, 2017. 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
 
$
182,514

 
Noninvestment grade
 
25,079

 
Internally rated investment grade
 
25,435

 
Internally rated noninvestment grade
 
61,714

 
Total
 
$
294,742