REVENUE

6 Months Ended

Mar. 31, 2023

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/ Operations	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 natural 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	Renewable energy certificates	Certain Clean Energy Ventures projects generate TRECs and SREC IIs under the established administratively determined incentive program. A TREC or SREC II is created for every MWh of electricity produced by a solar generator. The performance obligation of Clean Energy Ventures is to generate electricity. TRECs and SREC IIs under the administratively determined incentive program 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 in line with the terms of the contract and based on the services provided. Payment is due upon receipt of the invoice. For temporary releases of pipeline capacity, revenue is recognized on a straight-line basis over the agreed upon term.

Revenue Recognized Over Time (continued):
Segment/ Operations	Performance Obligation	Description
Storage and Transportation	Natural gas services	The performance obligation of Storage and Transportation is to provide the customer with storage and transportation services. Storage and Transportation generates revenues from firm storage contracts and transportation contracts, 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 its 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. NJR Retail enters into warranty contracts with homeowners for various appliances. 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:
Energy Services	Natural gas services	For a permanent release of pipeline capacity, the performance obligation of Energy Services is the release of the pipeline capacity associated with certain natural gas transportation contracts and the transfer of the underlying contractual rights to the counterparty. Revenue is recognized upon the transfer of the underlying contractual rights.
Storage and Transportation	Natural gas services	The performance obligation of Storage and Transportation is to provide the customer with storage and transportation services. Storage and Transportation generates revenues from usage fees and hub services for the use of storage space, injection and withdrawal from the storage facility. Hub services include park and loan transactions and wheeling. Usage fees and 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 for 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, 2023 and 2022, are as follows:

(Thousands)	Natural Gas Distribution		Clean Energy Ventures		Energy Services	Storage and Transportation	Home Services and Other	Total
2023
Natural gas utility sales (1)	$	327,198	—		—	—	—	$	327,198
Natural gas services	—		—		16,836	20,887	—	37,723
Service contracts	—		—		—	—	8,739	8,739
Installations and maintenance	—		—		—	—	4,709	4,709
Renewable energy certificates	—		2,085		—	—	—	2,085
Electricity sales	—		6,084		—	—	—	6,084
Eliminations (2)	(338)		—		—	(1,584)	(183)	(2,105)
Revenues from contracts with customers	326,860		8,169		16,836	19,303	13,265	384,433
Alternative revenue programs (3)	27,270		—		—	—	—	27,270
Derivative instruments	46,370		6,237	(4)	179,894	—	—	232,501
Eliminations (2)	—		—		(177)	—	—	(177)
Revenues out of scope	73,640		6,237		179,717	—	—	259,594
Total operating revenues	$	400,500	14,406		196,553	19,303	13,265	$	644,027
2022
Natural gas utility sales (1)	$	381,861	—		—	—	—	$	381,861
Natural gas services	—		—		17,309	13,342	—	30,651
Service contracts	—		—		—	—	8,492	8,492
Installations and maintenance	—		—		—	—	4,730	4,730
Renewable energy certificates	—		1,019		—	—	—	1,019
Electricity sales	—		6,846		—	—	—	6,846
Eliminations (2)	(338)		—		—	(537)	(81)	(956)
Revenues from contracts with customers	381,523		7,865		17,309	12,805	13,141	432,643
Alternative revenue programs (3)	2,504		—		—	—	—	2,504
Derivative instruments	79,447		3,962	(4)	395,336	—	—	478,745
Eliminations (2)	—		—		(1,576)	—	—	(1,576)
Revenues out of scope	81,951		3,962		393,760	—	—	479,673
Total operating revenues	$	463,474	11,827		411,069	12,805	13,141	$	912,316

(1)Includes building rent related to the Wall headquarters, which is eliminated in consolidation.

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

(3)Includes CIP revenue.

(4)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, 2023 and 2022, are as follows:

(Thousands)	Natural Gas Distribution		Clean Energy Ventures		Energy Services	Storage and Transportation	Home Services and Other	Total
2023
Natural gas utility sales (1)	$	615,365	—		—	—	—	$	615,365
Natural gas services	—		—		44,684	47,725	—	92,409
Service contracts	—		—		—	—	17,400	17,400
Installations and maintenance	—		—		—	—	10,314	10,314
Renewable energy certificates	—		3,287		—	—	—	3,287
Electricity sales	—		13,788		—	—	—	13,788
Eliminations (2)	(675)		—		—	(2,708)	(196)	(3,579)
Revenues from contracts with customers	614,690		17,075		44,684	45,017	27,518	748,984
Alternative revenue programs (3)	23,805		—		—	—	—	23,805
Derivative instruments	119,414		10,123	(4)	473,828	—	—	603,365
Eliminations (2)	—		—		(8,560)	—	—	(8,560)
Revenues out of scope	143,219		10,123		465,268	—	—	618,610
Total operating revenues	$	757,909	27,198		509,952	45,017	27,518	$	1,367,594
2022
Natural gas utility sales (1)	$	605,657	—		—	—	—	$	605,657
Natural gas services	—		—		45,188	25,485	—	70,673
Service contracts	—		—		—	—	16,959	16,959
Installations and maintenance	—		—		—	—	10,214	10,214
Renewable energy certificates	—		1,865		—	—	—	1,865
Electricity sales	—		13,316		—	—	—	13,316
Eliminations (2)	(675)		—		—	(1,096)	(180)	(1,951)
Revenues from contracts with customers	604,982		15,181		45,188	24,389	26,993	716,733
Alternative revenue programs (3)	13,158		—		—	—	—	13,158
Derivative instruments	119,769		6,829	(4)	736,701	—	—	863,299
Eliminations (2)	—		—		(5,032)	—	—	(5,032)
Revenues out of scope	132,927		6,829		731,669	—	—	871,425
Total operating revenues	$	737,909	22,010		776,857	24,389	26,993	$	1,588,158

(1)Includes building rent related to the Wall headquarters, which is eliminated in consolidation.

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

(3)Includes CIP revenue.

(4)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, 2023 and 2022, are as follows:

(Thousands)	Natural Gas Distribution		Clean Energy Ventures	Energy Services	Storage and Transportation	Home Services and Other	Total
2023
Residential	$	247,623	3,204	—	—	13,089	$	263,916
Commercial and industrial	49,105		4,965	16,836	19,303	176	90,385
Firm transportation	29,368		—	—	—	—	29,368
Interruptible and off-tariff	764		—	—	—	—	764
Revenues out of scope	73,640		6,237	179,717	—	—	259,594
Total operating revenues	$	400,500	14,406	196,553	19,303	13,265	$	644,027
2022
Residential	$	286,205	2,991	—	—	13,105	$	302,301
Commercial and industrial	60,106		4,874	17,309	12,805	36	95,130
Firm transportation	34,636		—	—	—	—	34,636
Interruptible and off-tariff	576		—	—	—	—	576
Revenues out of scope	81,951		3,962	393,760	—	—	479,673
Total operating revenues	$	463,474	11,827	411,069	12,805	13,141	$	912,316

Disaggregated revenues from contracts with customers by customer type and by reporting segment and other business operations during the six months ended March 31, 2023 and 2022, are as follows:

(Thousands)	Natural Gas Distribution		Clean Energy Ventures	Energy Services	Storage and Transportation	Home Services and Other	Total
2023
Residential	$	464,561	6,497	—	—	27,269	$	498,327
Commercial and industrial	92,900		10,578	44,684	45,017	249	193,428
Firm transportation	55,567		—	—	—	—	55,567
Interruptible and off-tariff	1,662		—	—	—	—	1,662
Revenues out of scope	143,219		10,123	465,268	—	—	618,610
Total operating revenues	$	757,909	27,198	509,952	45,017	27,518	$	1,367,594
2022
Residential	$	437,513	5,963	—	—	26,880	$	470,356
Commercial and industrial	107,290		9,218	45,188	24,389	113	186,198
Firm transportation	57,311		—	—	—	—	57,311
Interruptible and off-tariff	2,868		—	—	—	—	2,868
Revenues out of scope	132,927		6,829	731,669	—	—	871,425
Total operating revenues	$	737,909	22,010	776,857	24,389	26,993	$	1,588,158

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 the six months ended March 31, 2023 and 2022, are as follows:

	Customer Accounts Receivable				Customers' Credit
(Thousands)	Billed		Unbilled		Balances and Deposits
Balance as of September 30, 2022	$	222,297	$	13,769	$	33,246
(Decrease) increase	(27,844)		32,271		(7,725)
Balance as of March 31, 2023	$	194,453	$	46,040	$	25,521
Balance as of September 30, 2021	$	212,838	$	10,351	$	32,586
Increase (decrease)	60,475		45,919		(12,302)
Balance as of March 31, 2022	$	273,313	$	56,270	$	20,284

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, 2023 and September 30, 2022:

(Thousands)	Natural Gas Distribution		Clean Energy Ventures	Energy Services	Storage and Transportation	Home Services and Other	Total
March 31, 2023
Customer accounts receivable
Billed	$	142,275	5,917	37,280	7,090	1,891	$	194,453
Unbilled	43,020		3,020	—	—	—	46,040
Customers' credit balances and deposits	(25,516)		—	—	(5)	—	(25,521)
Total	$	159,779	8,937	37,280	7,085	1,891	$	214,972
September 30, 2022
Customer accounts receivable
Billed	$	78,508	5,566	129,199	7,012	2,012	$	222,297
Unbilled	10,814		2,955	—	—	—	13,769
Customers' credit balances and deposits	(33,246)		—	—	—	—	(33,246)
Total	$	56,076	8,521	129,199	7,012	2,012	$	202,820