DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

6 Months Ended

Mar. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Open NYMEX and OTCBB natural gas futures positions at March 31, 2014 were as follows:

	MMBtu (millions)	Avg. Price Per MMBtu
NYMEX Open long futures positions
Fiscal 2014	3.80	$	3.79
Fiscal 2015	0.94	3.84
OTCBB Open long futures positions
Fiscal 2014	9.53	$	4.00
Fiscal 2015	9.83	4.21
Fiscal 2016	0.55	4.24

The Effect of Derivative Instruments on the Statements of Income and Statements of Comprehensive Income

The Effect of Derivative Instruments on the Statements of Income and Statements of Comprehensive Income
		Three Months Ended						Six Months Ended
	Location of Gain (Loss)	March 31,						March 31,
(Thousands)	Recorded in Income	2014			2013			2014		2013
Derivatives in Cash Flow Hedging Relationships
NYMEX gasoline and heating oil contracts:
Effective portion of gain (loss) recognized in         OCI on derivatives		$	56		$	147		$	66	$	203
Effective portion of gain reclassified         from AOCI to income and maintenance	Utility – Other Operation and Maintenance Expenses	54			38			113		85
Ineffective portion of gain (loss) on         derivatives recognized in income and maintenance	Utility – Other Operation and Maintenance Expenses	(84		)	(31		)	36		(132		)
Derivatives Not Designated as Hedging Instruments *
NYMEX gasoline and heating oil contracts:
(Loss) gain recognized in income on          derivative	Other Income and (Income Deductions) – Net	$	(3	)	$	13		$	10	$	46

Fair Value of Derivative Instruments in the Balance Sheet

Fair Value of Derivative Instruments in the Balance Sheet at March 31, 2014
	Asset Derivatives*			Liability Derivatives*
(Thousands)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
NYMEX gasoline and heating oil contracts	Derivative Instrument Assets	$	49	Derivative Instrument Assets	$	—
Derivatives not designated as hedging instruments
NYMEX natural gas contracts	Derivative Instrument Assets	2,516		Derivative Instrument Assets	—
	Accounts Receivable - Other	4,467		Accounts Receivable - Other	3,811
OTCBB natural gas contracts	Derivative Instrument Assets	6,266		Derivative Instrument Assets	193
	Other Deferred Credits	64		Other Deferred Credits	122
Sub-total		13,313			4,126
Total derivatives		$	13,362		$	4,126
Fair Value of Derivative Instruments in the Balance Sheet at September 30, 2013
	Asset Derivatives*			Liability Derivatives*
(Thousands)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
NYMEX gasoline and heating oil contracts	Accounts Receivable - Other	$	105	Accounts Receivable - Other	$	—
Derivatives not designated as hedging instruments
NYMEX natural gas contracts	Accounts Receivable - Other	1,434		Accounts Receivable - Other	3,455
	Other Deferred Charges	32		Other Deferred Charges	—
OTCBB natural gas contracts	Current Liabilities - Other	228		Current Liabilities - Other	4,045
	Deferred Credits - Other	4		Deferred Credits - Other	1,398
Sub-total		1,698			8,898
Total derivatives		$	1,803		$	8,898
Fair Value of Derivative Instruments in the Balance Sheet at March 31, 2013
	Asset Derivatives*			Liability Derivatives*
(Thousands)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
NYMEX gasoline and heating oil contracts	Derivative Instrument Assets	$	312	Derivative Instrument Assets	$	—
Derivatives not designated as hedging instruments
NYMEX natural gas contracts	Derivative Instrument Assets	10,862		Derivative Instrument Assets	339
NYMEX gasoline and heating oil contracts	Derivative Instrument Assets	10		Derivative Instrument Assets	—
Sub-total		10,872			339
Total derivatives		$	11,184		$	339

* The fair values of Asset Derivatives and Liability Derivatives exclude the fair value of cash margin receivables or payables with counterparties subject to netting arrangements. Fair value amounts of derivative contracts (including the fair value amounts of cash margin receivables and payables) for which there is a legal right to set off are presented net on the Balance Sheets. As such, the gross balances presented in the table above are not indicative of the Utility’s net economic exposure. Refer to Note 5, Fair Value Measurements, for information on the valuation of derivative instruments.

Derivative Instrument Reconciliation

Following is a reconciliation of the amounts in the tables above to the amounts presented in the Balance Sheets:

(Thousands)	March 31, 2014			September 30, 2013			March 31, 2013
Fair value of asset derivatives presented above	$	13,362		$	1,803		$	11,184
Fair value of cash margin receivables offset with derivatives	—			1,890			—
Netting of assets and liabilities with the same counterparty	(4,782		)	(3,693		)	(7,879		)
Derivative instrument assets, per Balance Sheets	$	8,580		$	—		$	3,305
Derivative Instrument Assets, per Balance Sheets:
Derivative instrument assets	$	8,639		$	—		$	3,305
Other deferred charges	(59		)	—			—
Total	$	8,580		$	—		$	3,305
Fair value of liability derivatives presented above	$	4,126		$	8,898		$	339
Fair value of cash margin payables offset with derivatives	656			6			7,540
Netting of assets and liabilities with the same counterparty	(4,782		)	(3,693		)	(7,879		)
Derivative instrument liabilities, per Balance Sheets	$	—		$	5,211		$	—
Derivative Instrument Liabilities, per Balance Sheets:
Other current liabilities	$	—		$	3,817		$	—
Other deferred credits	—			1,394			—
Total	$	—		$	5,211		$	—