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DEBT
 12 Months Ended
Sep. 30, 2021
Debt Disclosure [Abstract]  
DEBT
9. DEBT

NJNG and NJR finance working capital requirements and capital expenditures through various short-term debt and long-term financing arrangements, including a commercial paper program and committed unsecured credit facilities.
Long-term Debt

The following table presents the long-term debt of the Company as of September 30:
(Thousands)20212020
NJNG
First mortgage bonds:Maturity date:
3.00%Series OOAugust 1, 204146,500 46,500 
3.15%Series PPApril 15, 202850,000 50,000 
3.58%Series QQMarch 13, 202470,000 70,000 
4.61%Series RRMarch 13, 204455,000 55,000 
2.82%Series SSApril 15, 202550,000 50,000 
3.66%Series TTApril 15, 2045100,000 100,000 
3.63%Series UUJune 21, 2046125,000 125,000 
4.01%Series VVMay 11, 2048125,000 125,000 
3.50%Series WWApril 1, 204210,300 10,300 
3.38%Series XXApril 1, 203810,500 10,500 
2.45%Series YYApril 1, 205915,000 15,000 
3.76%Series ZZJuly 17, 2049100,000 100,000 
3.86%Series AAAJuly 17, 205985,000 85,000 
2.75%Series BBBAugust 1, 20399,545 9,545 
3.00%Series CCCAugust 1, 204341,000 41,000 
3.13%Series DDDJune 30, 205050,000 50,000 
3.13%Series EEEJuly 23, 205050,000 50,000 
3.33%Series FFFJuly 23, 206025,000 25,000 
2.87%Series GGGSeptember 1, 205025,000 25,000 
2.97%Series HHHSeptember 1, 206050,000 50,000 
Finance lease obligation-buildingsJune 30, 2037— 47,597 
Finance lease obligation-metersVarious dates20,135 26,562 
Less: Debt issuance costs(9,093)(9,195)
Less: Current maturities of long-term debt(5,393)(10,416)
Total NJNG long-term debt1,098,494 1,147,393 
NJR
3.25%Unsecured senior notesSeptember 17, 202250,000 50,000 
3.20%Unsecured senior notesAugust 18, 202350,000 50,000 
3.48%Unsecured senior notesNovember 7, 2024100,000 100,000 
3.54%Unsecured senior notesAugust 18, 2026100,000 100,000 
3.96%Unsecured senior notesJune 8, 2028100,000 100,000 
3.29%Unsecured senior notesJuly 17, 2029150,000 150,000 
3.60%Unsecured senior notesJuly 23, 2032130,000 130,000 
3.50%Unsecured senior notesJuly 23, 2030130,000 130,000 
3.25%Unsecured senior notesSeptember 1, 203380,000 80,000 
3.13%Unsecured senior notesSeptember 1, 2031120,000 120,000 
Less: Debt issuance costs(3,269)(3,424)
Less: Current maturities of long-term debt(50,000)— 
Total NJR long-term debt956,731 1,006,576 
Clean Energy Ventures
Solar asset financing obligationVarious dates124,387 122,317 
Less: Current maturities of long-term debt(17,448)(16,820)
Total Clean Energy Ventures long-term debt106,939 105,497 
Total long-term debt$2,162,164 $2,259,466 
Annual long-term debt redemption requirements, excluding finance leases, debt issuance costs and solar asset financing obligations, as of September 30, are as follows:
(Thousands)NJRNJNG
2022$50,000 $— 
2023$50,000 $— 
2024$100,000 $70,000 
2025$— $50,000 
2026$100,000 $— 
Thereafter$710,000 $972,845 

NJNG

First Mortgage Bonds

NJNG and Trustee entered into the Mortgage Indenture, dated September 1, 2014, which secures all of the outstanding First Mortgage Bonds issued by NJNG. The Mortgage Indenture provides a direct first mortgage lien upon substantially all of the operating properties and franchises of NJNG (other than excepted property, such as cash on hand, choses-in-action, securities, rent, natural gas meters and certain materials, supplies, appliances and vehicles), subject only to certain permitted encumbrances. The Mortgage Indenture contains provisions subjecting after-acquired property (other than excepted property and subject to pre-existing liens, if any, at the time of acquisition) to the lien thereof.

NJNG’s Mortgage Indenture does not restrict NJNG’s ability to pay dividends. New Jersey Administrative Code 14:4-4.7 states that a public utility cannot issue dividends, without regulatory approval, if its equity to total capitalization ratio falls below 30 percent. As of September 30, 2021, NJNG’s equity to total capitalization ratio is 52.9 percent and has the ability to issue up to $1.2 billion of FMB under the terms of the Mortgage Indenture.


On October 28, 2021, NJNG entered into a Note Purchase Agreement for $100 million of its senior notes, of which $50 million were issued at an interest rate of 2.97 percent, maturing in 2051, and $50 million were issued at an interest rate of 3.07 percent, maturing in 2061. The senior notes are secured by an equal principal amount of NJNG’s FMBs issued under NJNG’s Mortgage Indenture.

Sale Leasebacks

NJNG received $4.0 million during fiscal 2020, in connection with the sale leaseback of its natural gas meters with terms ranging from seven to 11 years. NJNG records a finance lease liability that is paid over the term of the lease and has the option to purchase the meters back at fair value upon expiration of the lease. NJNG exercised early purchase options with respect to certain outstanding meter leases by making final principal payments of $1.2 million for both fiscal 2021 and 2020. There were no natural gas meter sale leasebacks recorded during fiscal 2021.

Contractual commitments for finance lease payments, as of the fiscal years ended September 30, are as follows:
(Thousands)Lease Payments
2022$6,004 
20234,622 
20245,279 
20253,396 
20262,324 
Subtotal21,625 
Less: Interest component(1,490)
Total$20,135 

Clean Energy Ventures

Clean Energy Ventures enters into transactions to sell the commercial solar assets concurrent with agreements to lease the assets back over a period of five to 15 years. These transactions are treated as financing obligations for accounting purposes, and are typically secured by the renewable energy facility asset and its future cash flows from SREC, TRECs and energy sales.
ITCs and other tax benefits associated with these solar projects are transferred to the buyer, if applicable; however, the lease payments are structured so that Clean Energy Ventures is compensated for the transfer of the related tax incentives. Clean Energy Ventures continues to operate the solar assets, including related expenses, and retain the revenue generated from SRECs, TRECs, and energy sales, and has the option to renew the lease or repurchase the assets sold at the end of the lease term. Clean Energy Ventures received proceeds of $17.7 million and $42.9 million during fiscal 2021 and 2020, respectively, in connection with the sale leaseback of commercial solar assets. The proceeds received were recognized as a financing obligation on the Consolidated Balance Sheets.

Contractual commitments for the solar financing obligation payments, as of the fiscal years ended September 30, are as follows:
(Thousands)Lease Payments
2022$13,749 
202313,886 
202441,132 
202533,873 
2026974 
Thereafter9,036 
Subtotal112,650 
Less: Interest component(10,985)
Total$101,665 
Short-term Debt

A summary of NJR’s credit facility and NJNG’s commercial paper program and credit facility as of September 30, are as follows:
(Thousands)20212020Expiration Dates
NJR
Bank revolving credit facilities (1)
$500,000 $— September 2026
Notes outstanding at end of period$219,100 $— 
Weighted average interest rate at end of period1.05 %— %
Amount available at end of period (2)
$270,312 $— 
Bank revolving credit facilities (3)
$— $425,000 December 2023
Notes outstanding at end of period$— $125,350 
Weighted average interest rate at end of period— %1.49 %
Amount available at end of period (4)
$— $289,356 
Bank revolving credit facilities (3)
$— $250,000 April 2021
Notes outstanding at end of period$— $— 
Weighted average interest rate at end of period— %— %
Amount available at end of period$— $250,000 
NJNG
Bank revolving credit facilities (3)
$250,000 $— September 2026
Commercial paper outstanding at end of period$158,200 $— 
Weighted average interest rate at end of period0.17 %— %
Amount available at end of period (5)
$91,069 $— 
Bank revolving credit facilities (3)
$— $250,000 December 2023
Commercial paper outstanding at end of period$— $— 
Weighted average interest rate at end of period— %— %
Amount available at end of period (5)
$— $249,269 
(1)Committed credit facilities, which require commitment fees ranging from 0.10 percent on the unused amounts.
(2)Letters of credit outstanding total $10.6 million as of September 30, 2021, which reduces amount available by the same amount.
(3)Committed credit facilities, which require commitment fees ranging from 0.075 percent on the unused amounts
(4)Letters of credit outstanding total $10.3 million as of September 30, 2020, which reduces amount available by the same amount.
(5)Letters of credit outstanding total $731,000 as of both September 30, 2021 and 2020, which reduces amount available by the same amount.

Amounts available under credit facilities are reduced by bank or commercial paper borrowings, as applicable, and any outstanding letters of credit. Neither NJNG nor the results of its operations are obligated or pledged to support the NJR credit or debt shelf facilities.
NJR

On September 2, 2021, NJR entered into a Second Amended and Restated Credit Agreement governing a $500 million NJR Credit Facility. The agreement replaces a $425 million revolving credit facility that was scheduled to expire on December 5, 2023, and the new NJR Credit Facility expires on September 2, 2026, subject to two mutual options for a one-year extension beyond that date. The NJR Credit Facility permits the borrowing of revolving loans and swingline loans, as well as a $75 million sublimit for the issuance of letters of credit. The NJR Credit Facility also includes an accordion feature, which would allow NJR, in the absence of a default or event of default, to increase from time to time, with the existing or new lenders, the revolving credit commitments under the NJR Credit Facility in minimum increments of $50 million increments up to a maximum of $250 million. Certain of NJR’s unregulated subsidiaries have guaranteed all of NJR’s obligations under the NJR Credit Facility. The credit facility is used primarily to finance its share repurchases, to satisfy Energy Services’ short-term liquidity needs and to finance, on an initial basis, unregulated investments.

As of September 30, 2021, NJR had eight letters of credit outstanding totaling $10.6 million on behalf of Energy Services and Clean Energy Ventures. These letters of credit reduce the amount available under NJR’s committed credit facility by the same amount. NJR does not anticipate that these letters of credit will be drawn upon by the counterparties, and they will be renewed as necessary.

Energy Services’ letters of credit are used for margin requirements for natural gas transactions, collateral and security deposit for retail natural gas sales and expire on dates ranging from December 2021 to September 2022.

Neither NJNG nor the results of its operations are obligated or pledged to support the NJR credit or debt shelf facilities.

NJNG

On September 2, 2021, NJNG entered into a Second Amended and Restated Credit Agreement governing a $250 million, NJNG Credit Facility. The agreement refinances a $250 million revolving credit facility that was scheduled to expire on December 5, 2023, but has now been terminated. The NJNG Credit Facility expires on September 2, 2026, subject to two mutual options for a one-year extension beyond that date. The NJNG Credit Facility permits the borrowing of revolving loans and swingline loans, as well as a $30 million sublimit for the issuance of letters of credit. The NJNG Credit Facility also includes an accordion feature, which would allow NJNG, in the absence of a default or event of default, to increase from time to time, with the existing or new lenders, the revolving credit commitments under the NJNG Credit Facility in minimum increments of $50 million up to a maximum of $100 million.

As of September 30, 2021, NJNG has two letters of credit outstanding for $731,000. NJNG’s letters of credit are used as collateral for remediation projects and expire in August 11, 2022. These letters of credit reduce the amount available under NJNG’s committed credit facility by the same amount. NJNG does not anticipate that these letters of credit will be drawn upon by the counterparty and they will be renewed as necessary.