INVESTMENTS IN EQUITY INVESTEES

9 Months Ended

Jun. 30, 2023

Investments, All Other Investments [Abstract]

INVESTMENTS IN EQUITY INVESTEES

7. INVESTMENTS IN EQUITY INVESTEES

Steckman Ridge

The Company holds a 50 percent equity method investment in Steckman Ridge, a jointly owned and controlled natural gas storage facility located in Bedford County, Pennsylvania. The Company's investment in Steckman Ridge was $104.4 million and $106.6 million as of June 30, 2023 and September 30, 2022, respectively, which include loans with a total outstanding principal balance of $70.4 million for both June 30, 2023 and September 30, 2022. These loans accrue interest at a variable rate that resets quarterly and are due October 1, 2023.

NJNG and Energy Services have entered into storage and park and loan agreements with Steckman Ridge. See Note 15. Related Party Transactions for more information on these intercompany transactions.

PennEast

The Company, through its subsidiary NJR Midstream Company, is a 20 percent investor in PennEast, a partnership whose purpose was to construct and operate a 120-mile natural gas pipeline that would have extended from northeast Pennsylvania to western New Jersey.

During the third quarter of fiscal 2021, the Company recognized an other-than-temporary impairment charge of $92.0 million, or approximately $74.5 million, net of income taxes, which represented the best estimate of the salvage value of the remaining assets of the project and was recorded in equity in earnings of affiliates in the Unaudited Condensed Consolidated Statements of Operations. In September 2021, the PennEast partnership determined that this project was no longer supported, and all further development ceased.

In March 2022, the PennEast board of managers approved cash distributions to members of the partnership following the sale of certain project-related assets and refunds of interconnection fees received from interstate pipelines. The return of capital received by the Company from March 2022 through September 2022, totaled $11.0 million and reduced the remaining carrying value of its equity method investment in PennEast to zero in the Unaudited Condensed Consolidated Balance Sheets, with the excess recorded in equity in earnings of affiliates in the Unaudited Condensed Consolidated Statements of Operations.

The Company received additional return of capital of $200,000 on February 15, 2023 and $100,000 on June 20, 2023, which is recognized in equity in earnings of affiliates, in the Unaudited Condensed Consolidated Statements of Operations.