REVENUE

6 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

REVENUE

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 electricity	Clean Energy Ventures operates wholly-owned solar 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. 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.
Clean Energy Ventures	Transition renewable energy certificates	Clean Energy Ventures generates TRECs, which are created for every MWh of electricity produced by a solar generator. The performance obligation of Clean Energy Ventures is to generate electricity and TRECs, which are purchased monthly by a REC Administrator. Revenue is recognized upon generation.
Energy Services	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.
Storage and Transportation	Natural gas services	The performance obligation of the Storage and Transportation segment is to provide the customer with storage and transportation services. The Storage and Transportation segment generates revenues from firm storage contracts and transportation contracts, related usage fees for the use of storage space, injection and withdrawal at the storage facility and the delivery of natural gas to customers. Revenue is recognized over time as customers receive the benefits of service as it is performed on their behalf using an output method based on actual deliveries. Demand fees are recognized as revenue over the term of the related agreement.
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:
Storage and Transportation	Natural gas services	The performance obligation of the Storage and Transportation segment is to provide the customer with storage and transportation services. The Storage and Transportation segment generates revenues from hub services for the use of storage space, injection and withdrawal from the storage facility. Hub services include park and loan transactions and wheeling. Hub services revenues are recognized as services are performed.
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 recognized 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 March 31, 2021 and 2020, is as follows:

(Thousands)	Natural Gas Distribution		Clean Energy Ventures		Energy Services	Storage and Transportation	Home Services and Other	Total
2021
Natural gas utility sales	$	296,888	—		—	—	—	$	296,888
Natural gas services	—		—		11,011	13,926	—	24,937
Service contracts	—		—		—	—	8,314	8,314
Installations and maintenance	—		—		—	—	4,459	4,459
Renewable energy certificates	—		817		—	—	—	817
Electricity sales	—		4,882		—	—	—	4,882
Eliminations (1)	—		—		—	(669)	(252)	(921)
Revenues from contracts with customers	296,888		5,699		11,011	13,257	12,521	339,376
Alternative revenue programs (2)	(6,664)		—		—	—	—	(6,664)
Derivative instruments	19,943		777	(3)	451,558	—	—	472,278
Eliminations (1)	—		—		(2,803)	—	—	(2,803)
Revenues out of scope	13,279		777		448,755	—	—	462,811
Total operating revenues	$	310,167	6,476		459,766	13,257	12,521	$	802,187
2020
Natural gas utility sales	$	266,868	—		—	—	—	$	266,868
Natural gas services	—		—		9,634	11,076	—	20,710
Service contracts	—		—		—	—	8,073	8,073
Installations and maintenance	—		—		—	—	4,292	4,292
Electricity sales	—		4,458		—	—	—	4,458
Eliminations (1)	—		—		—	(675)	(326)	(1,001)
Revenues from contracts with customers	266,868		4,458		9,634	10,401	12,039	303,400
Alternative revenue programs (2)	22,073		—		—	—	—	22,073
Derivative instruments	8,279		1,537		304,067	—	—	313,883
Eliminations (1)	—		—		258	—	—	258
Revenues out of scope	30,352		1,537		304,325	—	—	336,214
Total operating revenues	$	297,220	5,995		313,959	10,401	12,039	$	639,614

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

(2)Includes CIP revenue.

(3)Includes SREC revenue.

Disaggregated revenues from contracts with customers by product line and by reporting segment and other business operations during the six months ended March 31, 2021 and 2020, is as follows:

(Thousands)	Natural Gas Distribution		Clean Energy Ventures		Energy Services	Storage and Transportation	Home Services and Other	Total
2021
Natural gas utility sales	$	486,252	—		—	—	—	$	486,252
Natural gas services	—		—		17,439	27,030	—	44,469
Service contracts	—		—		—	—	16,573	16,573
Installations and maintenance	—		—		—	—	8,777	8,777
Renewable energy certificates	—		1,507		—	—	—	1,507
Electricity sales	—		9,270		—	—	—	9,270
Eliminations (1)	—		—		—	(1,326)	(419)	(1,745)
Revenues from contracts with customers	486,252		10,777		17,439	25,704	24,931	565,103
Alternative revenue programs (2)	(5,096)		—		—	—	—	(5,096)
Derivative instruments	24,740		2,069	(3)	674,607	—	—	24,740
Eliminations (1)	—		—		(4,931)	—	—	(4,931)
Revenues out of scope	19,644		2,069		669,676	—	—	691,389
Total operating revenues	$	505,896	12,846		687,115	25,704	24,931	$	1,256,492
2020
Natural gas utility sales	$	486,762	—		—	—	—	$	486,762
Natural gas services	—		—		16,955	20,148	—	37,103
Service contracts	—		—		—	—	16,111	16,111
Installations and maintenance	—		—		—	—	9,161	9,161
Electricity sales	—		8,476		—	—	—	8,476
Eliminations (1)	—		—		—	(1,342)	(741)	(2,083)
Revenues from contracts with customers	486,762		8,476		16,955	18,806	24,531	555,530
Alternative revenue programs (2)	20,130		—		—	—	—	20,130
Derivative instruments	9,951		3,731	(3)	667,161	—	—	680,843
Eliminations (1)	—		—		(1,853)	—	—	(1,853)
Revenues out of scope	30,081		3,731		665,308	—	—	699,120
Total operating revenues	$	516,843	12,207		682,263	18,806	24,531	$	1,254,650

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

(2)Includes CIP revenue.

(3)Includes SREC revenue.

Disaggregated revenues from contracts with customers by customer type and by reporting segment and other business operations during the three months ended March 31, 2021 and 2020, is as follows:

(Thousands)	Natural Gas Distribution		Clean Energy Ventures	Energy Services	Storage and Transportation	Home Services and Other	Total
2021
Residential	$	225,174	2,692	—	—	12,234	$	240,100
Commercial and industrial	42,824		3,007	11,011	13,257	287	70,386
Firm transportation	28,190		—	—	—	—	28,190
Interruptible and off-tariff	700		—	—	—	—	700
Revenues out of scope	13,279		777	448,755	—	—	462,811
Total operating revenues	$	310,167	6,476	459,766	13,257	12,521	$	802,187
2020
Residential	$	199,776	2,469	—	—	11,831	$	214,076
Commercial and industrial	41,635		1,989	9,634	10,401	208	63,867
Firm transportation	24,123		—	—	—	—	24,123
Interruptible and off-tariff	1,334		—	—	—	—	1,334
Revenues out of scope	30,352		1,537	304,325	—	—	336,214
Total operating revenues	$	297,220	5,995	313,959	10,401	12,039	$	639,614

Disaggregated revenues from contracts with customers by customer type and by reporting segment and other business operations during the six months ended March 31, 2021 and 2020, is as follows:

(Thousands)	Natural Gas Distribution		Clean Energy Ventures	Energy Services	Storage and Transportation	Home Services and Other	Total
2021
Residential	$	362,398	5,414	—	—	24,438	$	392,250
Commercial and industrial	72,053		5,363	17,439	25,704	493	121,052
Firm transportation	49,294		—	—	—	—	49,294
Interruptible and off-tariff	2,507		—	—	—	—	2,507
Revenues out of scope	19,644		2,069	669,676	—	—	691,389
Total operating revenues	$	505,896	12,846	687,115	25,704	24,931	$	1,256,492
2020
Residential	$	352,998	4,929	—	—	24,110	$	382,037
Commercial and industrial	87,057		3,547	16,955	18,806	421	126,786
Firm transportation	43,712		—	—	—	—	43,712
Interruptible and off-tariff	2,995		—	—	—	—	2,995
Revenues out of scope	30,081		3,731	665,308	—	—	699,120
Total operating revenues	$	516,843	12,207	682,263	18,806	24,531	$	1,254,650

Customer Accounts Receivable/Credit Balances and Deposits

The timing of revenue recognition, customer billings and cash collections resulting in accounts receivables, billed and unbilled, and customers’ credit balances and deposits on the Unaudited Condensed Consolidated Balance Sheets during six months ended March 31, 2021 are as follows:

	Customer Accounts Receivable				Customers' Credit
(Thousands)	Billed		Unbilled		Balances and Deposits
Balance as of October 1, 2020	$	134,173	$	9,226	$	25,934
Increase (Decrease)	103,056		32,715		(5,171)
Balance as of March 31, 2021	$	237,229	$	41,941	$	20,763

The following table provides information about receivables, 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 March 31, 2021:

(Thousands)	Natural Gas Distribution		Clean Energy Ventures	Energy Services	Storage and Transportation	Home Services and Other	Total
Customer accounts receivable
Billed	$	119,845	4,794	107,353	3,437	1,800	$	237,229
Unbilled	39,652		2,289	—	—	—	41,941
Customers' credit balances and deposits	(20,763)		—	—	—	—	(20,763)
Total	$	138,734	7,083	107,353	3,437	1,800	$	258,407