REVENUE

9 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

3. REVENUE

Revenue is recognized when a performance obligation is satisfied by transferring control of a product or service to a customer. Revenue is measured based on consideration specified in a contract with a customer using the output method of progress. The Company elected to apply the invoice practical expedient for recognizing revenue, whereby the amounts invoiced to customers represent the value to the customer and the Company’s performance completion as of the invoice date. Therefore the Company does not disclose related unsatisfied performance obligations. The Company also elected the practical expedient to exclude from the transaction price all sales taxes that are assessed by a governmental authority and therefore presents sales tax net in operating revenues on the Unaudited Condensed Consolidated Statements of Operations.

Below is a listing of performance obligations that arise from contracts with customers, along with details on the satisfaction of each performance obligation, the significant payment terms and the nature of the goods and services being transferred, by reporting segment and other business operations:



Revenue Recognized Over Time:
Segment	Performance Obligation	Description
Natural Gas Distribution	Natural gas utility sales	NJNG's performance obligation is to provide natural gas to residential, commercial and industrial customers as demanded, based on regulated tariff rates, which are established by the BPU. Revenues from the sale of natural gas are recognized in the period that gas is delivered and consumed by customers, including an estimate for quantities consumed but not billed during the period. Payment is due each month for the previous month's deliveries. Natural gas sales to individual customers are based on meter readings, which are performed on a systematic basis throughout the billing period. The unbilled revenue estimates are based on estimated customer usage by customer type, weather effects and the most current tariff rates. NJNG is entitled to be compensated for performance completed until service is terminated. Customers may elect to purchase the natural gas commodity from NJNG or may contract separately to purchase natural gas directly from third-party suppliers. As NJNG is acting as an agent on behalf of the third party supplier, revenue is recorded for the delivery of natural gas to the customer.
Clean Energy Ventures	Commercial solar and wind electricity	Clean Energy Ventures operates wholly-owned solar and formerly operated wind projects that recognize revenue as electricity is generated and transferred to the customer. The performance obligation is to provide electricity to the customer in accordance with contract terms or the interconnection agreement and is satisfied upon transfer of electricity generated. Due to the sale of our wind assets, wind electricity sales ceased in February 2019. Revenue is recognized as invoiced and the payment is due each month for the previous month's services.
Clean Energy Ventures	Residential solar electricity	Clean Energy Ventures provides access to residential rooftop and ground-mount solar equipment to customers who then pay the Company a monthly fee. The performance obligation is to provide electricity to the customer based on generation from the underlying residential solar asset and is satisfied upon transfer of electricity generated. Revenue is derived from the contract terms and is recognized as invoiced, with the payment due each month for the previous month's services.
Energy Services	Wholesale natural gas services	The performance obligation of Energy Services is to provide the customer transportation, storage and asset management services on an as needed basis. Energy Services generates revenue through management fees, demand charges, reservation fees and transportation charges centered around the buying and selling of the natural gas commodity, representing one series of distinct performance obligations. Revenue is recognized based upon the underlying natural gas quantities physically delivered and the customer obtaining control. Energy Services invoices customers on a monthly basis in line with the terms of the contract and based on the services provided. Payment is due each month for the previous month's invoiced services.
Home Services and Other	Service contracts	Home Services enters into service contracts with homeowners to provide maintenance and replacement services of applicable heating, cooling or ventilation equipment. All services provided relate to a distinct performance obligation which is to provide services for the specific equipment over the term of the contract. Revenue is recognized on a straight line basis over the term of the contract and payment is due upon receipt of the invoice.
Revenue Recognized at a Point in Time:
Home Services and Other	Installations	Home Services installs appliances, including but not limited to, furnaces, air conditioning units, boilers and generators to customers. The distinct performance obligation is the installation of the contracted appliance, which is satisfied at the point in time the item is installed. The transaction price for each installation differs accordingly. Revenue is recognition at a point in time upon completion of the installation, which is when the customer is billed.

Disaggregated revenues from contracts with customers by product line and by reporting segment and other business operations during the three months ended June 30, 2019, is as follows:



	Regulated		Unregulated
(Thousands)	Natural Gas Distribution		Clean Energy Ventures	Energy Services	Home Services and Other		Total
Natural gas utility sales	$	115,525	—	—	—		$	115,525
Wholesale natural gas services	—		—	3,876	—		3,876
Service contracts	—		—	—	7,890		7,890
Installations and maintenance	—		—	—	5,193		5,193
Electricity sales	—		4,745	—	—		4,745
Eliminations⁽¹⁾	—		—	—	(456	)	(456		)
Revenues from contracts with customers	115,525		4,745	3,876	12,627		136,773
Alternative revenue programs	2,025		—	—	—		2,025
Derivative Instruments	3,232		6,705	286,145	—		296,082
Eliminations⁽¹⁾	—		—	62	—		62
Revenues out of scope	5,257		6,705	286,207	—		298,169
Total operating revenues	$	120,782	11,450	290,083	12,627		$	434,942


(1)	Consists of transactions between subsidiaries that are eliminated in consolidation.

Disaggregated revenues from contracts with customers by product line and by reporting segment and other business operations during the nine months ended June 30, 2019, is as follows:



	Regulated		Unregulated
(Thousands)	Natural Gas Distribution		Clean Energy Ventures	Energy Services		Home Services and Other		Total
Natural gas utility sales	$	598,676	—	—		—		$	598,676
Wholesale natural gas services	—		—	26,204		—		26,204
Service contracts	—		—	—		23,533		23,533
Installations and maintenance	—		—	—		14,373		14,373
Electricity sales	—		16,944	—		—		16,944
Eliminations⁽¹⁾	—		—	—		(1,653	)	(1,653		)
Revenues from contracts with customers	598,676		16,944	26,204		36,253		678,077
Alternative revenue programs	9,059		—	—		—		9,059
Derivative Instruments	14,432		20,763	1,398,909		—		1,434,104
Eliminations⁽¹⁾	—		—	(8,276	)	—		(8,276		)
Revenues out of scope	23,491		20,763	1,390,633		—		1,434,887
Total operating revenues	$	622,167	37,707	1,416,837		36,253		$	2,112,964


(1)	Consists of transactions between subsidiaries that are eliminated in consolidation.

Disaggregated revenues from contracts with customers by customer type and by reporting segment and other business operations during the three months ended June 30, 2019, is as follows:



	Regulated		Unregulated
(Thousands)	Natural Gas Distribution		Clean Energy Ventures	Energy Services	Home Services and Other	Total
Residential	$	63,984	2,304	—	12,388	$	78,676
Commercial and industrial	37,511		2,441	3,876	239	44,067
Firm transportation	12,296		—	—	—	12,296
Interruptible and off-tariff	1,734		—	—	—	1,734
Revenues out of scope	5,257		6,705	286,207	—	298,169
Total operating revenues	$	120,782	11,450	290,083	12,627	$	434,942

Disaggregated revenues from contracts with customers by customer type and by reporting segment and other business operations during the nine months ended June 30, 2019, is as follows:



	Regulated		Unregulated
(Thousands)	Natural Gas Distribution		Clean Energy Ventures	Energy Services	Home Services and Other	Total
Residential	$	402,192	6,627	—	35,522	$	444,341
Commercial and industrial	139,691		10,317	26,204	731	176,943
Firm transportation	52,006		—	—	—	52,006
Interruptible and off-tariff	4,787		—	—	—	4,787
Revenues out of scope	23,491		20,763	1,390,633	—	1,434,887
Total operating revenues	$	622,167	37,707	1,416,837	36,253	$	2,112,964

Customer Accounts Receivable/Credit Balances and Deposits

The timing of revenue recognition, customer billings and cash collections result in accounts receivables, billed and unbilled, and customers’ credit balances and deposits on the Unaudited Condensed Consolidated Balance Sheets during the nine months ended June 30, 2019, are as follows:



	Customer Accounts Receivable					Customers' Credit
(Thousands)	Billed			Unbilled		Balances and Deposits
Balance as of October 1, 2018	$	205,490		$	7,199	$	27,325
Increase (decrease)	(30,820		)	214		(7,832		)
Balance as of June 30, 2019	$	174,670		$	7,413	$	19,493

The following table provides information about receivables and revenue earned on contracts in progress in excess of billings, which are included within accounts receivable, billed and unbilled, and customers’ credit balances and deposits, respectively, on the Unaudited Condensed Consolidated Balance Sheets as of June 30, 2019:



(Thousands)	Natural Gas Distribution			Clean Energy Ventures	Energy Services	Home Services and Other		Eliminations	Total
Customer accounts receivable
Billed	$	60,852		2,942	108,372	2,504		—	$	174,670
Unbilled	7,413			—	—	—		—	7,413
Customers' credit balances and deposits	(19,490		)	—	—	(3	)	—	(19,493		)
Total	$	48,775		2,942	108,372	2,501		—	$	162,590