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DERIVATIVE INSTRUMENTS (Tables)
 6 Months Ended
Mar. 31, 2018
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
 
 
March 31, 2018
 
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
 
$
88

 
$
26

 
$
151

 
$
72

Financial commodity contracts
Derivatives - current
 
375

 
134

 
—

 
1,149

Interest rate contracts
Derivatives - current
 
—

 
—

 
—

 
8,467

Energy Services:
 
 
 
 
 
 
 
 
 
Physical commodity contracts
Derivatives - current
 
6,036

 
16,274

 
14,588

 
16,589

 
Derivatives - noncurrent
 
1,249

 
14,963

 
7,127

 
8,710

Financial commodity contracts
Derivatives - current
 
20,398

 
28,247

 
15,302

 
20,267

 
Derivatives - noncurrent
 
12,232

 
8,537

 
2,033

 
2,620

Foreign currency contracts
Derivatives - current
 
—

 
97

 
40

 
—

 
Derivatives - noncurrent
 
—

 
103

 
4

 
—

Home Services and Other:
 
 
 
 
 
 
 
 
 
Interest rate contracts
Derivatives - current
 
—

 
14

 
—

 
—

 
Derivatives - noncurrent
 
135

 
—

 
—

 
—

Total fair value of derivatives
 
 
$
40,513

 
$
68,395

 
$
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 March 31, 2018:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
7,285

 
$
(1,903
)
 
$
(200
)
 
$
5,182

Financial commodity contracts
 
32,630

 
(20,031
)
 
(608
)
 
11,991

Total Energy Services
 
$
39,915

 
$
(21,934
)
 
$
(808
)
 
$
17,173

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
88

 
$
(5
)
 
$
—

 
$
83

Financial commodity contracts
 
375

 
(134
)
 
—

 
241

Total Natural Gas Distribution
 
$
463

 
$
(139
)
 
$
—

 
$
324

Home Services and Other
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
135

 
$
(14
)
 
$
—

 
$
121

Total Home Services and Other
 
$
135

 
$
(14
)
 
$
—

 
$
121

Derivative liabilities:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
31,237

 
$
(1,903
)
 
$
—

 
$
29,334

Financial commodity contracts
 
36,784

 
(19,492
)
 
(16,757
)
 
535

Foreign currency contracts
 
200

 
—

 
—

 
200

Total Energy Services
 
$
68,221

 
$
(21,395
)
 
$
(16,757
)
 
$
30,069

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
26

 
$
(5
)
 
$
—

 
$
21

Financial commodity contracts
 
134

 
(134
)
 
—

 
—

Total Natural Gas Distribution
 
$
160

 
$
(139
)
 
$
—

 
$
21

Home Services and Other
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
14

 
$
(14
)
 
$
—

 
$
—

Total Home Services and Other
 
$
14

 
$
(14
)
 
$
—

 
$
—

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 March 31, 2018:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
7,285

 
$
(1,903
)
 
$
(200
)
 
$
5,182

Financial commodity contracts
 
32,630

 
(20,031
)
 
(608
)
 
11,991

Total Energy Services
 
$
39,915

 
$
(21,934
)
 
$
(808
)
 
$
17,173

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
88

 
$
(5
)
 
$
—

 
$
83

Financial commodity contracts
 
375

 
(134
)
 
—

 
241

Total Natural Gas Distribution
 
$
463

 
$
(139
)
 
$
—

 
$
324

Home Services and Other
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
135

 
$
(14
)
 
$
—

 
$
121

Total Home Services and Other
 
$
135

 
$
(14
)
 
$
—

 
$
121

Derivative liabilities:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
31,237

 
$
(1,903
)
 
$
—

 
$
29,334

Financial commodity contracts
 
36,784

 
(19,492
)
 
(16,757
)
 
535

Foreign currency contracts
 
200

 
—

 
—

 
200

Total Energy Services
 
$
68,221

 
$
(21,395
)
 
$
(16,757
)
 
$
30,069

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
26

 
$
(5
)
 
$
—

 
$
21

Financial commodity contracts
 
134

 
(134
)
 
—

 
—

Total Natural Gas Distribution
 
$
160

 
$
(139
)
 
$
—

 
$
21

Home Services and Other
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
14

 
$
(14
)
 
$
—

 
$
—

Total Home Services and Other
 
$
14

 
$
(14
)
 
$
—

 
$
—

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
Six Months Ended
 
 
March 31,
March 31,
Derivatives not designated as hedging instruments:
2018
 
2017
2018
 
2017
Energy Services:
 
 
 
 
 
 
 
Physical commodity contracts
Operating revenues
$
(11,952
)
 
$
4,982

$
(10,742
)
 
$
6,725

Physical commodity contracts
Gas purchases
(44,646
)
 
(3,982
)
(67,343
)
 
(12,781
)
Financial commodity contracts
Gas purchases
13,767

 
38,121

(12,230
)
 
7,510

Foreign currency contracts
Gas purchases
(215
)
 
53

(263
)
 
(33
)
Home Services and Other:
 
 
 
 
 
 
 
Interest rate contracts
Interest expense
121

 
—

121

 
—

Total unrealized and realized gains (losses)
$
(42,925
)
 
$
39,174

$
(90,457
)
 
$
1,421
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
Six Months Ended
 
March 31,
March 31,
(Thousands)
2018
 
2017
2018
 
2017
Natural Gas Distribution:
 
 
 
 
 
 
Physical commodity contracts
$
(12,879
)
 
$
(3,780
)
$
(15,855
)
 
$
(2,730
)
Financial commodity contracts
7,232

 
(418
)
(1,576
)
 
10,760

Interest rate contracts
12,534

 
(1,690
)
8,467

 
18,681

Total unrealized and realized (losses) gains
$
6,887

 
$
(5,888
)
$
(8,964
)
 
$
26,711
Schedule of Outstanding Long (Short) Derivatives
NJNG and Energy Services had the following outstanding long (short) derivatives as of:
 
 
 
Volume (Bcf)
 
 
 
March 31,
2018
 
September 30,
2017
Natural Gas Distribution
Futures
 
24.9

 
18.2

 
Physical
 
33.2

 
32.1

Energy Services
Futures
 
(13.0
)
 
(16.4
)
 
Physical
 
36.5

 
(13.1
)
Schedule of Broker Margin Accounts by Company
The balances are as follows:
(Thousands)
Balance Sheet Location
March 31,
2018
September 30,
2017
Natural Gas Distribution
Broker margin - Current assets
$
3,612

$
2,661

Energy Services
Broker margin - Current assets
$
56,358

$
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 March 31, 2018. 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
 
$
175,076

 
Noninvestment grade
 
21,228

 
Internally rated investment grade
 
20,818

 
Internally rated noninvestment grade
 
47,079

 
Total
 
$
264,201