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DERIVATIVE INSTRUMENTS (Tables)
 12 Months Ended
Sep. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Fair Value of Derivative Assets and Liabilities
The following table reflects the fair value of the Company’s derivative assets and liabilities recognized on the Consolidated Balance Sheets as of September 30:
 
 
 
Fair Value
 
 
 
2018
 
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
 
$
85

 
$
192

 
$
151

 
$
72

Financial commodity contracts
Derivatives - current
 
94

 
—

 
—

 
1,149

Interest rate contracts (1)
Derivatives - current
 
—

 
—

 
—

 
8,467

Energy Services:
 
 
 
 
 
 
 
 
 
Physical commodity contracts
Derivatives - current
 
7,667

 
18,158

 
14,588

 
16,589

 
Derivatives - noncurrent
 
3,930

 
11,316

 
7,127

 
8,710

Financial commodity contracts
Derivatives - current
 
19,169

 
28,176

 
15,302

 
20,267

 
Derivatives - noncurrent
 
6,630

 
11,548

 
2,033

 
2,620

Foreign currency contracts
Derivatives - current
 
—

 
126

 
40

 
—

 
Derivatives - noncurrent
 
—

 
118

 
4

 
—

Home Services and Other:
 
 
 
 
 
 
 
 
 
Interest rate contracts
Derivatives - current
 
381

 
—

 
—

 
—

Total fair value of derivatives
 
 
$
37,956

 
$
69,634

 
$
39,245

 
$
57,874


(1)
Includes treasury lock which was settled in March 2018. See Note 8. Debt for more information.
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 and the net amounts the Company could present on the Consolidated Balance Sheets but elects not to.
(Thousands)
Amounts Presented in Balance Sheets (1)
Offsetting Derivative Instruments (2)
Financial Collateral Received/Pledged (3)
Net Amounts (4)
As of September 30, 2018:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
11,597

 
$
(3,944
)
 
$
(200
)
 
$
7,453

Financial commodity contracts
 
25,799

 
(18,775
)
 
—

 
7,024

Total Energy Services
 
$
37,396

 
$
(22,719
)
 
$
(200
)
 
$
14,477

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
85

 
$
(3
)
 
$
—

 
$
82

Financial commodity contracts
 
94

 
—

 
(94
)
 
—

Total Natural Gas Distribution
 
$
179

 
$
(3
)
 
$
(94
)
 
$
82

Home Services and Other
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
381

 
$
—

 
$
—

 
$
381

Total Home Services and Other
 
$
381

 
$
—

 
$
—

 
$
381

Derivative liabilities:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
29,474

 
$
(3,944
)
 
$
—

 
$
25,530

Financial commodity contracts
 
39,724

 
(18,775
)
 
(20,949
)
 
—

Foreign currency contracts
 
244

 
—

 
—

 
244

Total Energy Services
 
$
69,442

 
$
(22,719
)
 
$
(20,949
)
 
$
25,774

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
192

 
$
(3
)
 
$
—

 
$
189

Total Natural Gas Distribution
 
$
192

 
$
(3
)
 
$
—

 
$
189

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 in the balance sheet as the Company does not elect balance sheet offsetting under ASC 210-20.
(2)
Offsetting derivative instruments include 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 and the net amounts the Company could present on the Consolidated Balance Sheets but elects not to.
(Thousands)
Amounts Presented in Balance Sheets (1)
Offsetting Derivative Instruments (2)
Financial Collateral Received/Pledged (3)
Net Amounts (4)
As of September 30, 2018:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
11,597

 
$
(3,944
)
 
$
(200
)
 
$
7,453

Financial commodity contracts
 
25,799

 
(18,775
)
 
—

 
7,024

Total Energy Services
 
$
37,396

 
$
(22,719
)
 
$
(200
)
 
$
14,477

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
85

 
$
(3
)
 
$
—

 
$
82

Financial commodity contracts
 
94

 
—

 
(94
)
 
—

Total Natural Gas Distribution
 
$
179

 
$
(3
)
 
$
(94
)
 
$
82

Home Services and Other
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
381

 
$
—

 
$
—

 
$
381

Total Home Services and Other
 
$
381

 
$
—

 
$
—

 
$
381

Derivative liabilities:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
29,474

 
$
(3,944
)
 
$
—

 
$
25,530

Financial commodity contracts
 
39,724

 
(18,775
)
 
(20,949
)
 
—

Foreign currency contracts
 
244

 
—

 
—

 
244

Total Energy Services
 
$
69,442

 
$
(22,719
)
 
$
(20,949
)
 
$
25,774

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
192

 
$
(3
)
 
$
—

 
$
189

Total Natural Gas Distribution
 
$
192

 
$
(3
)
 
$
—

 
$
189

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 in the balance sheet as the Company does not elect balance sheet offsetting under ASC 210-20.
(2)
Offsetting derivative instruments include 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 the Consolidated Statements of Operations
The following table reflects the effect of derivative instruments on the Consolidated Statements of Operations as of September 30:
(Thousands)
Location of gain (loss) recognized in income on derivatives
Amount of gain (loss) recognized
in income on derivatives
Derivatives not designated as hedging instruments:
2018
 
2017
 
2016
Energy Services:
 
 
 
 
 
 
Physical commodity contracts
Operating revenues
$
(9,311
)
 
$
8,912

 
$
33,034

Physical commodity contracts
Gas purchases
(197
)
 
(27,461
)
 
(45,637
)
Financial commodity contracts
Gas purchases
(24,622
)
 
26,563

 
45,579

Foreign currency contracts
Gas purchases
(379
)
 
41

 
(34
)
Home Services and Other:
 
 
 
 
 
 
Interest rate contracts
Interest expense
334

 
—

 
—

Total unrealized and realized gains (losses)
$
(34,175
)
 
$
8,055

 
$
32,942

The following table reflects the (losses) gains associated with NJNG’s derivative instruments as of September 30:
(Thousands)
2018
 
2017
 
2016
Natural Gas Distribution:
 
 
 
 
 
Physical commodity contracts
$
1,232

 
$
(12,303
)
 
$
(15,756
)
Financial commodity contracts
1,844

 
5,595

 
(7,984
)
Interest rate contracts
8,467

 
14,606

 
(18,845
)
Total unrealized and realized (losses) gains
$
11,543

 
$
7,898

 
$
(42,585
)
Schedule of Outstanding Long (Short) Derivatives
NJNG and Energy Services had the following outstanding long (short) derivatives as of September 30:
 
 
 
Volume (Bcf)
 
 
 
2018
 
2017
Natural Gas Distribution
Futures
 
27.9

 
18.2

 
Physical
 
23.1

 
32.1

Energy Services
Futures
 
(7.0
)
 
(16.4
)
 
Physical
 
51.2

 
(13.1
)
Schedule of Due to (from) Broker-Dealers and Clearing Organizations
The balances as of September 30, by segment, are as follows:
(Thousands)
Balance Sheet Location
2018
2017
Natural Gas Distribution
Broker margin - Current assets
$
2,038

$
2,661

Energy Services
Broker margin - Current assets
$
51,681

$
23,166
Schedules of Concentration of Risk, by Risk Factor
The following is a summary of gross credit exposures grouped by investment and noninvestment grade counterparties, as of September 30, 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
 
$
179,982

 
Noninvestment grade
 
43,486

 
Internally-rated investment grade
 
30,786

 
Internally-rated noninvestment grade
 
25,750

 
Total
 
$
280,004