ASSET RETIREMENT OBLIGATIONS

12 Months Ended

Sep. 30, 2018

Asset Retirement Obligation Disclosure [Abstract]

11. ASSET RETIREMENT OBLIGATIONS

The Company recognizes AROs when the legal obligation to retire an asset has been incurred and a reasonable estimate of fair value can be made. Accordingly, the Company recognizes AROs related to the costs associated with cutting and capping its main and service gas distribution pipelines of NJNG, which is required by New Jersey law when taking such gas distribution pipeline out of service. The Company also recognizes AROs related to Clean Energy Ventures’ solar and wind assets when there are decommissioning provisions in Clean Energy Ventures’ lease agreements that require removal of the asset.

Accretion amounts associated with NJNG’s ARO are recognized as part of its depreciation expense and the corresponding regulatory asset and liability will be shown gross on the Consolidated Balance Sheets. Accretion amounts associated with Clean Energy Ventures’ ARO are recognized as a component of operations and maintenance expense on the Consolidated Statements of Operations.

The following is an analysis of the change in the Company’s AROs for the fiscal years ended September 30:



(Thousands)	2018						2017
	NJNG			NJRCEV			NJNG			NJRCEV
Balance at October 1	$	24,825		$	6,595		$	23,521		$	4,858
Accretion	1,366			198			1,304			245
Additions	1,880			517			729			1,492
Revisions in estimated cash flows	(2,133		)	—			(245		)	—
Retirements	(298		)	—			(484		)	—
Reclassification to held for sale or sold	—			(4,262		)	—			—
Balance at period end	$	25,640		$	3,048		$	24,825		$	6,595

Accretion for the next five years, for the fiscal years ended September 30, is estimated to be as follows:



	Estimated
(Thousands)	Accretion
2019	$	1,557
2020	1,627
2021	1,702
2022	1,778
2023	1,863
Total	$	8,527