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DERIVATIVE INSTRUMENTS (Tables)
 9 Months Ended
Jun. 30, 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
June 30, 2023September 30, 2022
(Thousands)Balance Sheet LocationAssetsLiabilitiesAssetsLiabilities
Derivatives not designated as hedging instruments:
Natural Gas Distribution:
Physical commodity contractsDerivatives - current$61 $5 $252 $11 
Financial commodity contractsDerivatives - current6,714 188 85 6,281 
Energy Services:
Physical commodity contractsDerivatives - current6,547 13,079 9,857 17,051 
Derivatives - noncurrent679 13,136 376 13,561 
Financial commodity contractsDerivatives - current18,805 4,291 14,423 26,488 
Derivatives - noncurrent1,185 121 6,009 630 
Foreign currency contractsDerivatives - current— — 18 17 
Total fair value of derivatives$33,991 $30,820 $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 June 30, 2023
Derivative assets:
Energy Services
Physical commodity contracts$7,226 $(2,231)$(460)$4,535 
Financial commodity contracts19,990 (4,412)— 15,578 
Total Energy Services$27,216 $(6,643)$(460)$20,113 
Natural Gas Distribution
Physical commodity contracts$61 $(1)$— $60 
Financial commodity contracts6,714 (188)— 6,526 
Total Natural Gas Distribution$6,775 $(189)$— $6,586 
Derivative liabilities:
Energy Services
Physical commodity contracts$26,215 $(2,231)$— $23,984 
Financial commodity contracts4,412 (4,412)— — 
Total Energy Services$30,627 $(6,643)$— $23,984 
Natural Gas Distribution
Physical commodity contracts$5 $(1)$— $4 
Financial commodity contracts188 (188)— — 
Total Natural Gas Distribution$193 $(189)$— $4 
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 June 30, 2023
Derivative assets:
Energy Services
Physical commodity contracts$7,226 $(2,231)$(460)$4,535 
Financial commodity contracts19,990 (4,412)— 15,578 
Total Energy Services$27,216 $(6,643)$(460)$20,113 
Natural Gas Distribution
Physical commodity contracts$61 $(1)$— $60 
Financial commodity contracts6,714 (188)— 6,526 
Total Natural Gas Distribution$6,775 $(189)$— $6,586 
Derivative liabilities:
Energy Services
Physical commodity contracts$26,215 $(2,231)$— $23,984 
Financial commodity contracts4,412 (4,412)— — 
Total Energy Services$30,627 $(6,643)$— $23,984 
Natural Gas Distribution
Physical commodity contracts$5 $(1)$— $4 
Financial commodity contracts188 (188)— — 
Total Natural Gas Distribution$193 $(189)$— $4 
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 EndedNine Months Ended
June 30,June 30,
Derivatives not designated as hedging instruments:2023202220232022
Energy Services:
Physical commodity contractsOperating revenues$12,648 $608 $29,894 $(10,824)
Physical commodity contractsNatural gas purchases(5,914)1,975 (6,708)2,605 
Financial commodity contractsNatural gas purchases4,858 (19)76,332 29,947 
Foreign currency contractsNatural gas purchases— — — (14)
Total unrealized and realized gain$11,592 $2,564 $99,518 $21,714 
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)2023202220232022
Natural Gas Distribution:
Physical commodity contracts$315 $646 $(27,919)$6,880 
Financial commodity contracts18,000 2,482 (51,957)49,320 
Total unrealized and realized gain (loss)$18,315 $3,128 $(79,876)$56,200 
Schedule of Outstanding Long (Short) Derivatives
NJNG and Energy Services had the following outstanding long (short) derivatives as of:
Volume (Bcf)
Transaction TypeJune 30,
2023		September 30,
2022
Natural Gas DistributionFutures26.0 30.5 
Physical Commodity3.7 6.8 
Energy ServicesFutures(14.2)(0.7)
Physical Commodity2.1 2.7 
Schedule of Broker Margin Accounts by Company The balances by reporting segment are as follows:
(Thousands)Balance Sheet LocationJune 30,
2023		September 30,
2022
Natural Gas DistributionRestricted broker margin accounts-current assets$4,027 $26,138 
Energy ServicesRestricted broker margin accounts-current assets$16,210 $68,123 
Restricted broker margin accounts-current liabilities$1,218 $— 
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, 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$104,901 
Noninvestment grade3,303 
Internally rated investment grade16,129 
Internally rated noninvestment grade21,539 
Total$145,872