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DERIVATIVE INSTRUMENTS (Tables)
 6 Months Ended
Mar. 31, 2023
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
March 31, 2023September 30, 2022
(Thousands)Balance Sheet LocationAssetsLiabilitiesAssetsLiabilities
Derivatives not designated as hedging instruments:
Natural Gas Distribution:
Physical commodity contractsDerivatives - current$100 $24 $252 $11 
Financial commodity contractsDerivatives - current— — 85 6,281 
Energy Services:
Physical commodity contractsDerivatives - current4,262 10,140 9,857 17,051 
Derivatives - noncurrent4 17,368 376 13,561 
Financial commodity contractsDerivatives - current21,296 14,019 14,423 26,488 
Derivatives - noncurrent1,636 — 6,009 630 
Foreign currency contractsDerivatives - current— — 18 17 
Total fair value of derivatives$27,298 $41,551 $31,020 $64,039 
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 and 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 March 31, 2023:
Derivative assets:
Energy Services
Physical commodity contracts$4,266 $(1,060)$(460)$2,746 
Financial commodity contracts22,932 (14,019)— 8,913 
Total Energy Services$27,198 $(15,079)$(460)$11,659 
Natural Gas Distribution
Physical commodity contracts$100 $(1)$— $99 
Total Natural Gas Distribution$100 $(1)$— $99 
Derivative liabilities:
Energy Services
Physical commodity contracts$27,508 $(1,060)$— $26,448 
Financial commodity contracts14,019 (14,019)— — 
Total Energy Services$41,527 $(15,079)$— $26,448 
Natural Gas Distribution
Physical commodity contracts$24 $(1)$— $23 
Total Natural Gas Distribution$24 $(1)$— $23 
As of September 30, 2022:
Derivative assets:
Energy Services
Physical commodity contracts$10,233 $(404)$(200)$9,629 
Financial commodity contracts20,432 (12,198)— 8,234 
Foreign currency contracts18 (17)— 1 
Total Energy Services$30,683 $(12,619)$(200)$17,864 
Natural Gas Distribution
Physical commodity contracts$252 $— $— $252 
Financial commodity contracts85 (85)— — 
Total Natural Gas Distribution$337 $(85)$— $252 
Derivative liabilities:
Energy Services
Physical commodity contracts$30,612 $(404)$— $30,208 
Financial commodity contracts27,118 (12,198)— 14,920 
Foreign currency contracts17 (17)— — 
Total Energy Services$57,747 $(12,619)$— $45,128 
Natural Gas Distribution
Physical commodity contracts$11 $— $— $11 
Financial commodity contracts6,281 (85)— 6,196 
Total Natural Gas Distribution$6,292 $(85)$— $6,207 
(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 and 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 March 31, 2023:
Derivative assets:
Energy Services
Physical commodity contracts$4,266 $(1,060)$(460)$2,746 
Financial commodity contracts22,932 (14,019)— 8,913 
Total Energy Services$27,198 $(15,079)$(460)$11,659 
Natural Gas Distribution
Physical commodity contracts$100 $(1)$— $99 
Total Natural Gas Distribution$100 $(1)$— $99 
Derivative liabilities:
Energy Services
Physical commodity contracts$27,508 $(1,060)$— $26,448 
Financial commodity contracts14,019 (14,019)— — 
Total Energy Services$41,527 $(15,079)$— $26,448 
Natural Gas Distribution
Physical commodity contracts$24 $(1)$— $23 
Total Natural Gas Distribution$24 $(1)$— $23 
As of September 30, 2022:
Derivative assets:
Energy Services
Physical commodity contracts$10,233 $(404)$(200)$9,629 
Financial commodity contracts20,432 (12,198)— 8,234 
Foreign currency contracts18 (17)— 1 
Total Energy Services$30,683 $(12,619)$(200)$17,864 
Natural Gas Distribution
Physical commodity contracts$252 $— $— $252 
Financial commodity contracts85 (85)— — 
Total Natural Gas Distribution$337 $(85)$— $252 
Derivative liabilities:
Energy Services
Physical commodity contracts$30,612 $(404)$— $30,208 
Financial commodity contracts27,118 (12,198)— 14,920 
Foreign currency contracts17 (17)— — 
Total Energy Services$57,747 $(12,619)$— $45,128 
Natural Gas Distribution
Physical commodity contracts$11 $— $— $11 
Financial commodity contracts6,281 (85)— 6,196 
Total Natural Gas Distribution$6,292 $(85)$— $6,207 
(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 EndedSix Months Ended
March 31,March 31,
Derivatives not designated as hedging instruments:2023202220232022
Energy Services:
Physical commodity contractsOperating revenues$7,208 $(11,582)$17,246 $(11,432)
Physical commodity contractsNatural gas purchases(124)(875)(794)630 
Financial commodity contractsNatural gas purchases29,863 (31,223)71,474 29,966 
Foreign currency contractsNatural gas purchases— (14)— (14)
Total unrealized and realized loss (gain)$36,947 $(43,694)$87,926 $19,150 
Effect of Derivative Instruments Designated as Cash Flow Hedges on OCI The following table reflects the gains (losses) associated with NJNG's derivative instruments for the periods set forth below:
Three Months EndedSix Months Ended
March 31,March 31,
(Thousands)2023202220232022
Natural Gas Distribution:
Physical commodity contracts$(203)$4,538 $(28,234)$6,234 
Financial commodity contracts(38,294)61,485 (69,957)46,838 
Total unrealized and realized (gain) loss$(38,497)$66,023 $(98,191)$53,072 
Schedule of Outstanding Long (Short) Derivatives
NJNG and Energy Services had the following outstanding long (short) derivatives as of:
Volume (Bcf)
Transaction TypeMarch 31,
2023		September 30,
2022
Natural Gas DistributionFutures32.2 30.5 
Physical Commodity8.8 6.8 
Energy ServicesFutures(5.6)(0.7)
Physical Commodity(0.2)2.7 
Schedule of Broker Margin Accounts by Company The balances by reporting segment are as follows:
(Thousands)Balance Sheet LocationMarch 31,
2023		September 30,
2022
Natural Gas DistributionRestricted broker margin accounts-current assets$12,866 $26,138 
Energy ServicesRestricted broker margin accounts-current assets$38,703 $68,123 
Restricted broker margin accounts-current liabilities$1,245 $— 
Summary of Gross Credit Exposures
The following is a summary of gross credit exposures grouped by investment and noninvestment grade counterparties, as of March 31, 2023. 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$126,575 
Noninvestment grade13,009 
Internally rated investment grade15,514 
Internally rated noninvestment grade26,407 
Total$181,505