REVENUE

9 Months Ended

Jun. 30, 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 June 30, 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)	$	134,253	—		—	—	—	$	134,253
Natural gas services	—		—		16,021	22,201	—	38,222
Service contracts	—		—		—	—	8,842	8,842
Installations and maintenance	—		—		—	—	6,113	6,113
Renewable energy certificates	—		4,720		—	—	—	4,720
Electricity sales	—		8,274		—	—	—	8,274
Eliminations (2)	(337)		—		—	(766)	(6)	(1,109)
Revenues from contracts with customers	133,916		12,994		16,021	21,435	14,949	199,315
Alternative revenue programs (3)	5,211		—		—	—	—	5,211
Derivative instruments	5,844		184	(4)	54,151	—	—	60,179
Eliminations (2)	—		—		(630)	—	—	(630)
Revenues out of scope	11,055		184		53,521	—	—	64,760
Total operating revenues	$	144,971	13,178		69,542	21,435	14,949	$	264,075
2022
Natural gas utility sales (1)	$	180,933	—		—	—	—	$	180,933
Natural gas services	—		—		20,312	16,390	—	36,702
Service contracts	—		—		—	—	8,428	8,428
Installations and maintenance	—		—		—	—	5,792	5,792
Renewable energy certificates	—		1,709		—	—	—	1,709
Electricity sales	—		11,076		—	—	—	11,076
Eliminations (2)	(338)		—		—	(611)	(52)	(1,001)
Revenues from contracts with customers	180,595		12,785		20,312	15,779	14,168	243,639
Alternative revenue programs (3)	(1,810)		—		—	—	—	(1,810)
Derivative instruments	20,572		1,010	(4)	287,503	—	—	309,085
Eliminations (2)	—		—		1,421	—	—	1,421
Revenues out of scope	18,762		1,010		288,924	—	—	308,696
Total operating revenues	$	199,357	13,795		309,236	15,779	14,168	$	552,335

(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 nine months ended June 30, 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)	$	749,618	—		—	—	—	$	749,618
Natural gas services	—		—		60,705	69,926	—	130,631
Service contracts	—		—		—	—	26,242	26,242
Installations and maintenance	—		—		—	—	16,427	16,427
Renewable energy certificates	—		8,007		—	—	—	8,007
Electricity sales	—		22,062		—	—	—	22,062
Eliminations (2)	(1,012)		—		—	(3,474)	(202)	(4,688)
Revenues from contracts with customers	748,606		30,069		60,705	66,452	42,467	948,299
Alternative revenue programs (3)	29,016		—		—	—	—	29,016
Derivative instruments	125,258		10,307	(4)	527,979	—	—	663,544
Eliminations (2)	—		—		(9,190)	—	—	(9,190)
Revenues out of scope	154,274		10,307		518,789	—	—	683,370
Total operating revenues	$	902,880	40,376		579,494	66,452	42,467	$	1,631,669
2022
Natural gas utility sales (1)	$	786,590	—		—	—	—	$	786,590
Natural gas services	—		—		65,500	41,875	—	107,375
Service contracts	—		—		—	—	25,387	25,387
Installations and maintenance	—		—		—	—	16,006	16,006
Renewable energy certificates	—		3,574		—	—	—	3,574
Electricity sales	—		24,392		—	—	—	24,392
Eliminations (2)	(1,013)		—		—	(1,707)	(232)	(2,952)
Revenues from contracts with customers	785,577		27,966		65,500	40,168	41,161	960,372
Alternative revenue programs (3)	11,348		—		—	—	—	11,348
Derivative instruments	140,341		7,839	(4)	1,024,204	—	—	1,172,384
Eliminations (2)	—		—		(3,611)	—	—	(3,611)
Revenues out of scope	151,689		7,839		1,020,593	—	—	1,180,121
Total operating revenues	$	937,266	35,805		1,086,093	40,168	41,161	$	2,140,493

(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 June 30, 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	$	94,340	3,585	—	—	14,922	$	112,847
Commercial and industrial	20,220		9,409	16,021	21,435	27	67,112
Firm transportation	18,088		—	—	—	—	18,088
Interruptible and off-tariff	1,268		—	—	—	—	1,268
Revenues out of scope	11,055		184	53,521	—	—	64,760
Total operating revenues	$	144,971	13,178	69,542	21,435	14,949	$	264,075
2022
Residential	$	94,147	3,314	—	—	14,129	$	111,590
Commercial and industrial	65,550		9,471	20,312	15,779	39	111,151
Firm transportation	19,465		—	—	—	—	19,465
Interruptible and off-tariff	1,433		—	—	—	—	1,433
Revenues out of scope	18,762		1,010	288,924	—	—	308,696
Total operating revenues	$	199,357	13,795	309,236	15,779	14,168	$	552,335

Disaggregated revenues from contracts with customers by customer type and by reporting segment and other business operations during the nine months ended June 30, 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	$	558,901	10,082	—	—	42,191	$	611,174
Commercial and industrial	113,120		19,987	60,705	66,452	276	260,540
Firm transportation	73,655		—	—	—	—	73,655
Interruptible and off-tariff	2,930		—	—	—	—	2,930
Revenues out of scope	154,274		10,307	518,789	—	—	683,370
Total operating revenues	$	902,880	40,376	579,494	66,452	42,467	$	1,631,669
2022
Residential	$	531,660	9,277	—	—	41,009	$	581,946
Commercial and industrial	172,840		18,689	65,500	40,168	152	297,349
Firm transportation	76,776		—	—	—	—	76,776
Interruptible and off-tariff	4,301		—	—	—	—	4,301
Revenues out of scope	151,689		7,839	1,020,593	—	—	1,180,121
Total operating revenues	$	937,266	35,805	1,086,093	40,168	41,161	$	2,140,493

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 nine months ended June 30, 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	(111,834)		2,723		(2,979)
Balance as of June 30, 2023	$	110,463	$	16,492	$	30,267
Balance as of September 30, 2021	$	212,838	$	10,351	$	32,586
Increase (decrease)	55,205		4,681		(10,370)
Balance as of June 30, 2022	$	268,043	$	15,032	$	22,216

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 June 30, 2023 and September 30, 2022:

(Thousands)	Natural Gas Distribution		Clean Energy Ventures	Energy Services	Storage and Transportation	Home Services and Other	Total
June 30, 2023
Customer accounts receivable
Billed	$	72,747	7,433	20,675	7,485	2,123	$	110,463
Unbilled	10,583		5,909	—	—	—	16,492
Customers' credit balances and deposits	(30,259)		—	—	(8)	—	(30,267)
Total	$	53,071	13,342	20,675	7,477	2,123	$	96,688
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