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DERIVATIVE INSTRUMENTS (Tables)
 9 Months Ended
Jun. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Fair Value of Derivative Assets and Liabilities
The following table presents the fair value of the Company's derivative assets and liabilities recognized on the Unaudited Condensed Consolidated Balance Sheets as of:
Derivatives at Fair Value
June 30, 2022September 30, 2021
(Thousands)Balance Sheet LocationAssetsLiabilitiesAssetsLiabilities
Derivatives not designated as hedging instruments:
Natural Gas Distribution:
Physical commodity contractsDerivatives - current$18 $14 $36 $16 
Financial commodity contractsDerivatives - current70 10,209 2,046 13 
Energy Services:
Physical commodity contractsDerivatives - current3,075 20,038 2,818 24,592 
Derivatives - noncurrent460 20,570 333 13,237 
Financial commodity contractsDerivatives - current17,108 28,538 30,226 62,521 
Derivatives - noncurrent6,012 799 3,068 260 
Foreign currency contractsDerivatives - current7 3 125 3 
Derivatives - noncurrent— — 2 — 
Total fair value of derivatives$26,750 $80,171 $38,654 $100,642 
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, as well as the net amounts the Company could present on the Unaudited Condensed Consolidated Balance Sheets but elects not to.
(Thousands)
Amounts Presented on Balance Sheets (1)
Offsetting Derivative Instruments (2)
Financial Collateral Received/Pledged (3)
Net Amounts (4)
As of June 30, 2022:
Derivative assets:
Energy Services
Physical commodity contracts$3,535 $(1,223)$(200)$2,112 
Financial commodity contracts23,120 (10,562)— 12,558 
Foreign currency contracts7 (3)— 4 
Total Energy Services$26,662 $(11,788)$(200)$14,674 
Natural Gas Distribution
Physical commodity contracts$18 $(1)$— $17 
Financial commodity contracts70 (70)— — 
Total Natural Gas Distribution$88 $(71)$— $17 
Derivative liabilities:
Energy Services
Physical commodity contracts$40,608 $(1,223)$— $39,385 
Financial commodity contracts29,337 (10,562)— 18,775 
Foreign currency contracts3 (3)— — 
Total Energy Services$69,948 $(11,788)$— $58,160 
Natural Gas Distribution
Physical commodity contracts$14 $(1)$— $13 
Financial commodity contracts10,209 (70)— 10,139 
Total Natural Gas Distribution$10,223 $(71)$— $10,152 
As of September 30, 2021:
Derivative assets:
Energy Services
Physical commodity contracts$3,151 $(894)$(700)$1,557 
Financial commodity contracts33,294 (33,294)20,532 20,532 
Foreign currency contracts127 (3)— 124 
Total Energy Services$36,572 $(34,191)$19,832 $22,213 
Natural Gas Distribution
Physical commodity contracts$36 $(8)$— $28 
Financial commodity contracts2,046 (13)— 2,033 
Total Natural Gas Distribution$2,082 $(21)$— $2,061 
Derivative liabilities:
Energy Services
Physical commodity contracts$37,829 $(894)$— $36,935 
Financial commodity contracts62,781 (33,294)— 29,487 
Foreign currency contracts3 (3)— — 
Total Energy Services$100,613 $(34,191)$— $66,422 
Natural Gas Distribution
Physical commodity contracts$16 $(8)$— $8 
Financial commodity contracts13 (13)— — 
Total Natural Gas Distribution$29 $(21)$— $8 
(1)Derivative assets and liabilities are presented on a gross basis on the condensed consolidated balance sheets as the Company does not elect balance sheet offsetting under ASC 210-20.
(2)Includes 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, as well as the net amounts the Company could present on the Unaudited Condensed Consolidated Balance Sheets but elects not to.
(Thousands)
Amounts Presented on Balance Sheets (1)
Offsetting Derivative Instruments (2)
Financial Collateral Received/Pledged (3)
Net Amounts (4)
As of June 30, 2022:
Derivative assets:
Energy Services
Physical commodity contracts$3,535 $(1,223)$(200)$2,112 
Financial commodity contracts23,120 (10,562)— 12,558 
Foreign currency contracts7 (3)— 4 
Total Energy Services$26,662 $(11,788)$(200)$14,674 
Natural Gas Distribution
Physical commodity contracts$18 $(1)$— $17 
Financial commodity contracts70 (70)— — 
Total Natural Gas Distribution$88 $(71)$— $17 
Derivative liabilities:
Energy Services
Physical commodity contracts$40,608 $(1,223)$— $39,385 
Financial commodity contracts29,337 (10,562)— 18,775 
Foreign currency contracts3 (3)— — 
Total Energy Services$69,948 $(11,788)$— $58,160 
Natural Gas Distribution
Physical commodity contracts$14 $(1)$— $13 
Financial commodity contracts10,209 (70)— 10,139 
Total Natural Gas Distribution$10,223 $(71)$— $10,152 
As of September 30, 2021:
Derivative assets:
Energy Services
Physical commodity contracts$3,151 $(894)$(700)$1,557 
Financial commodity contracts33,294 (33,294)20,532 20,532 
Foreign currency contracts127 (3)— 124 
Total Energy Services$36,572 $(34,191)$19,832 $22,213 
Natural Gas Distribution
Physical commodity contracts$36 $(8)$— $28 
Financial commodity contracts2,046 (13)— 2,033 
Total Natural Gas Distribution$2,082 $(21)$— $2,061 
Derivative liabilities:
Energy Services
Physical commodity contracts$37,829 $(894)$— $36,935 
Financial commodity contracts62,781 (33,294)— 29,487 
Foreign currency contracts3 (3)— — 
Total Energy Services$100,613 $(34,191)$— $66,422 
Natural Gas Distribution
Physical commodity contracts$16 $(8)$— $8 
Financial commodity contracts13 (13)— — 
Total Natural Gas Distribution$29 $(21)$— $8 
(1)Derivative assets and liabilities are presented on a gross basis on the condensed consolidated balance sheets as the Company does not elect balance sheet offsetting under ASC 210-20.
(2)Includes 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 Consolidated Statements of Operations
The following table presents the effect of derivative instruments recognized on the Unaudited Condensed Consolidated Statements of Operations for the periods set forth below:
(Thousands)Location of gain (loss) recognized in income on derivativesAmount of gain (loss) recognized
in income on derivatives
Three Months EndedNine Months Ended
June 30,June 30,
Derivatives not designated as hedging instruments:2022202120222021
Energy Services:
Physical commodity contractsOperating revenues$608 $997 $(10,824)$42,668 
Physical commodity contractsNatural gas purchases1,975 1,100 2,605 (1,304)
Financial commodity contractsNatural gas purchases(19)(23,426)29,947 (2,986)
Foreign currency contractsNatural gas purchases— 11 (14)238 
Total unrealized and realized (gain) loss$2,564 $(21,318)$21,714 $38,616 
Effect of Derivative Instruments Designated as Cash Flow Hedges on OCI The following table reflects the gains (losses) associated with NJNG's derivative instruments for the periods set forth below:
Three Months EndedNine Months Ended
June 30,June 30,
(Thousands)2022202120222021
Natural Gas Distribution:
Physical commodity contracts$646 $399 $6,880 $1,832 
Financial commodity contracts2,482 15,483 49,320 11,856 
Total unrealized and realized gain$3,128 $15,882 $56,200 $13,688 
Schedule of Outstanding Long (Short) Derivatives
NJNG and Energy Services had the following outstanding long (short) derivatives as of:
Volume (Bcf)
Transaction TypeJune 30,
2022		September 30,
2021
Natural Gas DistributionFutures27.3 22.2 
Physical Commodity8.1 7.6 
Energy ServicesFutures(5.1)(13.4)
Swaps(0.1)(0.3)
Physical Commodity(0.4)0.6 
Schedule of Broker Margin Accounts by Company The balances are as follows:
(Thousands)Balance Sheet LocationJune 30,
2022		September 30,
2021
Natural Gas DistributionRestricted broker margin accounts-current assets$11,556 $2,790 
Energy ServicesRestricted broker margin accounts-current assets$84,529 $70,050 
Summary of Gross Credit Exposures
The following is a summary of gross credit exposures grouped by investment and noninvestment grade counterparties, as of June 30, 2022. 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$176,341 
Noninvestment grade22,944 
Internally rated investment grade25,532 
Internally rated noninvestment grade47,611 
Total$272,428