10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark one)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to __________________

Commission File Number 1-6364

SOUTH JERSEY INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

New Jersey	22-1901645
(State of incorporation)	(IRS employer identification no.)

1 South Jersey Plaza, Folsom, NJ 08037

(Address of principal executive offices, including zip code)

(609) 561-9000

(Registrant’s telephone number, including area code)

Common Stock
($1.25 par value per share)	New York Stock Exchange
(Title of each class)	(Name of exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes x   No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x   No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer   x	Accelerated filer      o
Non-accelerated filer     o (Do not check if a smaller reporting company)	Smaller reporting company      o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No x

As of May 2, 2016 there were 71,425,506 shares of the registrant’s common stock outstanding.

TABLE OF CONTENTS

		PageNo.
PART I	FINANCIAL INFORMATION
Item 1.	Unaudited Condensed Consolidated Financial Statements	1
	Condensed Consolidated Statements of Income	1
	Condensed Consolidated Statements of Comprehensive Income	2
	Condensed Consolidated Statements of Cash Flows	3
	Condensed Consolidated Balance Sheets	4
	Notes to Unaudited Condensed Consolidated Financial Statements	6
	Note  1. Summary of Significant Accounting Policies	6
	Note  2. Stock-Based Compensation Plan	9
	Note 3. Affiliations and Discontinued Operations	12
	Note  4. Common Stock	14
	Note  5. Financial Instruments	14
	Note  6. Segments of Business	16
	Note  7. Rates and Regulatory Actions	20
	Note  8. Regulatory Assets & Regulatory Liabilities	20
	Note  9. Pension and Other Postretirement Benefits	22
	Note 10. Lines of Credit	23
	Note 11. Commitments and Contingencies	24
	Note 12. Derivative Instruments	24
	Note 13. Fair Value of Financial Assets and Financial Liabilities	27
	Note 14. Long-Term Debt	29
	Note 15. Accumulated Other Comprehensive Loss	30
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	49
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 6.	Exhibits	51
Signatures		52

Item 1. Unaudited Condensed Consolidated Financial Statements

SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In Thousands Except for Per Share Data)

	Three Months Ended March 31,
	2016			2015
Operating Revenues:
Utility	$	183,669		$	266,530
Nonutility	149,366			116,422
Total Operating Revenues	333,035			382,952
Operating Expenses:
Cost of Sales - (Excluding depreciation)
- Utility	65,206			144,974
- Nonutility	87,769			96,733
Operations	38,797			41,861
Maintenance	4,384			3,998
Depreciation	20,701			16,819
Energy and Other Taxes	1,925			2,196
Total Operating Expenses	218,782			306,581
Operating Income	114,253			76,371
Other Income and Expense	2,203			2,241
Interest Charges	(9,160		)	(8,601		)
Income Before Income Taxes	107,296			70,011
Income Taxes	(39,267		)	(16,613		)
Equity in Earnings of Affiliated Companies	158			455
Income from Continuing Operations	68,187			53,853
Loss from Discontinued Operations - (Net of tax benefit)	(118		)	(276		)
Net Income	$	68,069		$	53,577
Basic Earnings Per Common Share:
Continuing Operations	$	0.96		$	0.79
Discontinued Operations	—			—
Basic Earnings Per Common Share	$	0.96		$	0.79
Average Shares of Common Stock Outstanding - Basic	71,127			68,397
Diluted Earnings Per Common Share:
Continuing Operations	$	0.95		$	0.79
Discontinued Operations	—			—
Diluted Earnings Per Common Share	$	0.95		$	0.79
Average Shares of Common Stock Outstanding - Diluted	71,416			68,618
Dividends Declared Per Common Share	$	0.26		$	0.25

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. All share and per share amounts were adjusted for all periods presented for the 2-for-1 stock split, effected in the form of a stock dividend, effective on May 8, 2015. See Note 1.

1

SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(In Thousands)

	Three Months Ended March 31,
	2016		2015
Net Income	$	68,069	$	53,577
Other Comprehensive Income, Net of Tax:*
Unrealized Gain on Available-for-Sale Securities	49		88
Unrealized Gain on Derivatives - Other	51		8
Other Comprehensive Loss of Affiliated Companies	—		(95		)
Other Comprehensive Income - Net of Tax*	100		1
Comprehensive Income	$	68,169	$	53,578

* Determined using a combined average statutory tax rate of 40%.

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

2

SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In Thousands)

	Three Months Ended March 31,
	2016			2015
Net Cash Provided by Operating Activities	$	98,080		$	34,936
Cash Flows from Investing Activities:
Capital Expenditures	(67,416		)	(54,307		)
Purchase of Available for Sale Securities	—			(6,059		)
Proceeds from Restricted Investments	1,738			—
Net Proceeds from Sale of Restricted Investments in Margin Account	8,906			4,829
Investment in Long-Term Receivables	(3,142		)	(4,658		)
Proceeds from Long-Term Receivables	2,527			1,808
Notes Receivable	(50		)	—
Purchase of Company-Owned Life Insurance	(357		)	(356		)
Investment in Affiliate	(3,079		)	(717		)
Advances on Notes Receivable - Affiliate	—			(1,265		)
Repayment of Notes Receivable - Affiliate	1,626			275
Net Cash Used in Investing Activities	(59,247		)	(60,450		)
Cash Flows from Financing Activities:
Net (Repayments of) Borrowings from Short-Term Credit Facilities	(92,200		)	26,700
Proceeds from Issuance of Long-Term Debt	61,000			—
Principal Repayments of Long-Term Debt	(12,905		)	—
Proceeds from Sale of Common Stock	5,645			1,857
Net Cash (Used in) Provided by Financing Activities	(38,460		)	28,557
Net Increase in Cash and Cash Equivalents	373			3,043
Cash and Cash Equivalents at Beginning of Period	3,877			4,171
Cash and Cash Equivalents at End of Period	$	4,250		$	7,214

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

3

SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In Thousands)

	March 31, 2016			December 31, 2015
Assets
Property, Plant and Equipment:
Utility Plant, at original cost	$	2,261,409		$	2,211,239
Accumulated Depreciation	(450,001		)	(440,473		)
Nonutility Property and Equipment, at cost	784,495			785,646
Accumulated Depreciation	(117,737		)	(108,307		)
Property, Plant and Equipment - Net	2,478,166			2,448,105
Investments:
Available-for-Sale Securities	14,960			14,810
Restricted	37,893			48,758
Investment in Affiliates	20,254			16,983
Total Investments	73,107			80,551
Current Assets:
Cash and Cash Equivalents	4,250			3,877
Accounts Receivable	179,662			178,359
Unbilled Revenues	47,502			40,044
Provision for Uncollectibles	(10,024		)	(10,252		)
Notes Receivable	11,819			11,800
Notes Receivable - Affiliate	1,508			3,134
Natural Gas in Storage, average cost	38,571			54,211
Materials and Supplies, average cost	6,762			5,088
Prepaid Taxes	11,382			21,753
Derivatives - Energy Related Assets	57,815			83,093
Other Prepayments and Current Assets	46,863			40,167
Total Current Assets	396,110			431,274
Regulatory and Other Noncurrent Assets:
Regulatory Assets	356,962			323,434
Derivatives - Energy Related Assets	19,489			16,238
Notes Receivable - Affiliate	13,275			13,275
Contract Receivables	29,039			28,609
Notes Receivable	31,888			35,439
Goodwill	8,139			8,880
Identifiable Intangible Assets	21,850			21,553
Other	65,959			64,575
Total Regulatory and Other Noncurrent Assets	546,601			512,003
Total Assets	$	3,493,984		$	3,471,933

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

4

SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In Thousands)

	March 31, 2016			December 31, 2015
Capitalization and Liabilities
Equity:
Common Stock	$	89,048		$	88,707
Premium on Common Stock	505,601			499,460
Treasury Stock (at par)	(262		)	(296		)
Accumulated Other Comprehensive Loss	(24,399		)	(24,499		)
Retained Earnings	523,454			474,167
Total Equity	1,093,442			1,037,539
Long-Term Debt (See Note 1)	1,046,968			997,427
Total Capitalization	2,140,410			2,034,966
Current Liabilities:
Notes Payable	339,500			431,700
Current Portion of Long-Term Debt	28,604			29,454
Accounts Payable	151,006			186,400
Customer Deposits and Credit Balances	19,340			20,146
Environmental Remediation Costs	55,065			50,559
Taxes Accrued	3,737			2,336
Derivatives - Energy Related Liabilities	66,370			90,708
Dividends Payable	18,790			—
Interest Accrued	6,108			7,316
Pension Benefits	2,261			2,261
Other Current Liabilities	7,222			11,596
Total Current Liabilities	698,003			832,476
Deferred Credits and Other Noncurrent Liabilities:
Deferred Income Taxes - Net	333,572			295,945
Pension and Other Postretirement Benefits	77,720			76,068
Environmental Remediation Costs	85,263			76,064
Asset Retirement Obligations	58,054			57,943
Derivatives - Energy Related Liabilities	10,148			21,697
Derivatives - Other	13,118			10,943
Regulatory Liabilities	55,373			42,841
Other	22,323			22,990
Total Deferred Credits and Other Noncurrent Liabilities	655,571			604,491
Commitments and Contingencies  (Note 11)
Total Capitalization and Liabilities	$	3,493,984		$	3,471,933

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

5

Notes to Unaudited Condensed Consolidated Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

GENERAL - South Jersey Industries, Inc. (SJI or the Company) currently provides a variety of energy-related products and services primarily through the following wholly-owned subsidiaries:

▪ South Jersey Gas Company (SJG) is a regulated natural gas utility. SJG distributes natural gas in the seven southernmost counties of New Jersey.

▪ South Jersey Energy Company (SJE) acquires and markets natural gas and electricity to retail end users and provides total energy management services to commercial, industrial and residential customers.

▪ South Jersey Resources Group, LLC (SJRG) markets natural gas storage, commodity and transportation assets along with fuel management services on a wholesale basis in the mid-Atlantic, Appalachian and southern states.

▪ South Jersey Exploration, LLC (SJEX) owns oil, gas and mineral rights in the Marcellus Shale region of Pennsylvania.

▪ Marina Energy, LLC (Marina) develops and operates on-site energy-related projects. The following entities are wholly-owned subsidiaries of Marina as of December 31, 2015 (see Note 3):

•ACB Energy Partners, LLC (ACB) owns and operates a natural gas fueled combined heating, cooling and power facility located in Atlantic City, New Jersey.

•AC Landfill Energy. LLC (ACLE), BC Landfill Energy, LLC (BCLE), SC Landfill Energy, LLC (SCLE) and SX Landfill Energy, LLC (SXLE) own and operate landfill gas-fired electric production facilities in Atlantic, Burlington, Salem and Sussex Counties located in New Jersey.

•MCS Energy Partners, LLC (MCS), NBS Energy Partners, LLC (NBS) and SBS Energy Partners, LLC (SBS) own and operate solar-generation sites located in New Jersey.

▪ South Jersey Energy Service Plus, LLC (SJESP) services residential and small commercial HVAC systems, installs small commercial HVAC systems, provides plumbing services and services appliances under warranty via a subcontractor arrangement as well as on a time and materials basis.

▪ SJI Midstream, LLC was formed in 2014 to invest in infrastructure and other midstream projects, including a current project to build a 100-mile natural gas pipeline in Pennsylvania and New Jersey.

BASIS OF PRESENTATION — The condensed consolidated financial statements include the accounts of SJI, its wholly-owned subsidiaries and subsidiaries in which SJI has a controlling interest. SJI eliminates all significant intercompany accounts and transactions. In management’s opinion, the condensed consolidated financial statements reflect all normal and recurring adjustments needed to fairly present SJI’s financial position, operating results and cash flows at the dates and for the periods presented. SJI’s businesses are subject to seasonal fluctuations and, accordingly, this interim financial information should not be the basis for estimating the full year’s operating results. As permitted by the rules and regulations of the Securities and Exchange Commission (SEC), the accompanying unaudited condensed consolidated financial statements contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). These financial statements should be read in conjunction with SJI’s 2015 Annual Report on Form 10-K for a more complete discussion of the Company’s accounting policies and certain other information.

Certain reclassifications have been made to the prior period's condensed consolidated balance sheets, as well as the prior period long-term debt carrying value and prior period's segment disclosures in Notes 5 and 6, respectively, to conform to the current period presentation. The unamortized debt issuance costs previously included in "Regulatory and Other Noncurrent Assets" on the condensed consolidated balance sheets were reclassified to Long-Term Debt to conform to ASU 2015-03, which is described below under "New Accounting Pronouncements." This reclassification caused the prior period long-term debt carrying value in Note 5 to be adjusted, along with the prior period unamortized debt issuance costs recorded as Identifiable Assets in the Gas Utility Operations, On-Site Energy Production and Corporate and Services segments in Note 6 to be removed.

6

On February 26, 2015, the Board of Directors approved an amendment to SJI's Certificate of Incorporation to increase the authorized number of shares of common stock from 60,000,000 shares to 120,000,000 shares. The principal purpose of the increase was to permit a two-for-one split of all the issued shares of SJI's common stock, effected pursuant to a stock dividend of one share of common stock for each outstanding share of common stock, payable May 8, 2015 to shareholders of record at the close of business on April 17, 2015. All references to number of shares and per share information in the condensed consolidated financial statements and related notes have been adjusted for all periods presented to reflect this stock split.

REVENUE AND THROUGHPUT-BASED TAXES — SJG collects certain revenue-based energy taxes from its customers. Such taxes include New Jersey State Sales Tax and Public Utilities Assessment (PUA). State sales tax is recorded as a liability when billed to customers and is not included in revenue or operating expenses. The PUA is included in both utility revenue and energy and other taxes and totaled $0.4 million and $0.6 million for the three months ended March 31, 2016 and 2015, respectively.

IMPAIRMENT OF LONG-LIVED ASSETS - SJI reviews the carrying amount of long-lived assets for possible impairment whenever events or changes in circumstances indicate that such amounts may not be recoverable. For the three months ended March 31, 2016 and 2015, no impairments were identified.

GAS EXPLORATION AND DEVELOPMENT - The Company capitalizes all costs associated with gas property acquisition, exploration and development activities under the full cost method of accounting. Capitalized costs include costs related to unproved properties, which are not amortized until proved reserves are found or it is determined that the unproved properties are impaired. All costs related to unproved properties are reviewed quarterly to determine if impairment has occurred. No impairment charges were recorded during the three months ended March 31, 2016 or 2015. As of both March 31, 2016 and December 31, 2015, $8.9 million related to interests in proved and unproved properties in Pennsylvania, net of amortization, is included with Nonutility Property and Equipment and Other Noncurrent Assets on the condensed consolidated balance sheets.

TREASURY STOCK – SJI uses the par value method of accounting for treasury stock. As of March 31, 2016 and December 31, 2015, SJI held 209,298 and 236,571 shares of treasury stock, respectively. These shares are related to deferred compensation arrangements where the amounts earned are held in the stock of SJI.

INCOME TAXES — Deferred income taxes are provided for all significant temporary differences between the book and taxable bases of assets and liabilities in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740 - “Income Taxes”.  A valuation allowance is established when it is determined that it is more likely than not that a deferred tax asset will not be realized. Investment tax credits related to renewable energy facilities of Marina are recognized on the flow-through method, which may result in variations in the customary relationship between income taxes and pre-tax income for interim periods.

GOODWILL - Goodwill was acquired as part of the acquisition of Energenic projects discussed in Note 3 and is a part of the on-site energy production segment. Goodwill represents the excess of the consideration paid over the fair value of identifiable net assets acquired. Goodwill is not amortized, but instead is subject to impairment testing on an annual basis, and between annual tests whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying amount. No such events have occurred during the three months ended March 31, 2016. The Company recorded $8.1 million and $8.9 million of Goodwill on the condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015, respectively.

The following table summarizes the changes in Goodwill for the three months ended March 31, 2016 (in thousands):

	2016
Beginning Balance, January 1	$	8,880
Fair Value Adjustments During Measurement Periods (See Note 3)	(741		)
Ending Balance, March 31	$	8,139

7

NEW ACCOUNTING PRONOUNCEMENTS — Other than as described below, no new accounting pronouncement issued or effective during 2016 or 2015 had, or is expected to have, a material impact on the condensed consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU supersedes the revenue recognition requirements in FASB ASC 605, Revenue Recognition, and in most industry-specific topics. The new guidance identifies how and when entities should recognize revenue. The new rules establish a core principle requiring the recognition of revenue to depict the transfer of promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40); Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. The new guidance requires management of a company to evaluate whether there is substantial doubt about the company's ability to continue as a going concern. This ASU is effective for the annual reporting period ending after December 15, 2016, and for interim and annual reporting periods thereafter, with early adoption permitted. The Company does not expect this standard to have an impact on its consolidated financial statements upon adoption.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis, which changes the analysis to be performed in determining whether certain types of legal entities should be consolidated. Specifically, the standard amends the evaluation of whether (a) fees paid to a decision maker or a service provider represent a variable interest, (b) a limited partnership or similar entity has the characteristics of a Variable Interest Entity ("VIE") and (c) a reporting entity is the primary beneficiary of a VIE. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015, with early adoption permitted. Adoption of this guidance did not have an impact on the Company's financial statement results.

In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This ASU requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Adoption of this guidance did not have an impact on the Company's results of operations; however, balance sheet presentations were modified to conform to this guidance.

Also in April 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40). This ASU provides guidance to customers (a) in determining whether a cloud computing arrangement includes a software license, and (b) on how the arrangement should be accounted for, depending on whether or not it includes a software license. The amended guidance is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Adoption of this guidance did not have an impact on the Company's financial statement results.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. This ASU states that inventory for which cost is determined using a method other than last-in, first-out (LIFO) or the retail method should be subsequently measured at the lower of cost or net realizable value (NRV), rather than at the lower of cost or market. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In August 2015, the FASB issued ASU 2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. This ASU states that, given the absence of authoritative guidance for debt issuance costs related to line-of-credit arrangements within ASU 2015-03 (discussed above), the SEC staff would not object to an entity deferring and presenting such costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of credit arrangement. The adoption of this standard did not have an impact on the Company's financial statement results.

8

In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which enhances the reporting model for financial instruments and includes amendments to address aspects of recognition, measurement, presentation and disclosure. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted for only certain portions of the new guidance. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In March 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The new standard requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The new standard also will result in enhanced quantitative and qualitative disclosures, including significant judgments made by management, to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing leases. The accounting for leases by the lessor remains relatively the same. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships. The amendments in this guidance clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016, with early adoption permitted. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In March 2016, the FASB issued ASU 2016-07, Investments- Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting, which eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016, with early adoption permitted. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This standard amends ASU 2014-09 (discussed above), to improve the implementation guidance on principal versus agent considerations and whether an entity reports revenue on a gross or net basis. This standard will have the same effective date and transition requirements as ASU 2014-09. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies various aspects of accounting for share-based payment arrangements. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016, with early adoption permitted. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. This standard amends ASU 2014-09 (discussed above), to clarify identifying performance obligations and the licensing implementation guidance. This standard will have the same effective date and transition requirements as ASU 2014-09. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

2. STOCK-BASED COMPENSATION PLAN:

On April 30, 2015, the shareholders of SJI approved the adoption of the Company's 2015 Omnibus Equity Compensation Plan (Plan), replacing the Amended and Restated 1997 Stock-Based Compensation Plan that had terminated on January 26, 2015. Under the Plan, shares may be issued to SJI’s officers (Officers), non-employee directors (Directors) and other key employees. No options were granted or outstanding during the three months ended March 31, 2016 and 2015.  No stock appreciation rights have been issued under the plans. During the three months ended March 31, 2016 and 2015, SJI granted 192,760 and 151,354 restricted shares, respectively, to Officers and other key employees under the plans.  Performance-based restricted shares vest over a three-year period and are subject to SJI achieving certain market and earnings-based performance targets, which can cause the actual amount of shares that ultimately vest to range from 0% to 200% of the original share units granted.

9

Beginning in 2015, SJI grants time-based shares of restricted stock, one-third of which vests annually over a three-year period and is limited to 100% payout. Vesting of time-based grants is contingent upon SJI achieving a return on equity (ROE) of at least 7% during the initial year of the grant and meeting the service requirement. Provided that the 7% ROE requirement is met in the initial year, payout is solely contingent upon the service requirement being met in years two and three of the grant. During the three months ended March 31, 2016 and 2015, Officers and other key employees were granted 57,828 and 45,406 shares of time-based restricted stock, which are included in the shares noted above.

Grants containing market-based performance targets use SJI's total shareholder return (TSR) relative to a peer group to measure performance. As TSR-based grants are contingent upon market and service conditions, SJI is required to measure and recognize stock-based compensation expense based on the fair value at the date of grant on a straight-line basis over the requisite three-year period of each award. In addition, SJI identifies specific forfeitures of share-based awards, and compensation expense is adjusted accordingly over the requisite service period. Compensation expense is not adjusted based on the actual achievement of performance goals. The fair value of TSR-based restricted stock awards on the date of grant is estimated using a Monte Carlo simulation model.

Through 2014, grants containing earnings-based targets were based on SJI's earnings per share (EPS) growth rate relative to a peer group to measure performance. In 2015, earning-based performance targets included pre-defined EPS and return on equity (ROE) goals to measure performance. Beginning in 2016, performance targets include pre-defined Economic Earnings compound annual growth rate (EE) for SJI. As EPS-based, ROE-based and EE-based grants are contingent upon performance and service conditions, SJI is required to measure and recognize stock-based compensation expense based on the fair value at the date of grant over the requisite three-year period of each award. The fair value is measured as the market price at the date of grant. The initial accruals of compensation expense are based on the estimated number of shares expected to vest, assuming the requisite service is rendered and probable outcome of the performance condition is achieved. That estimate is revised if subsequent information indicates that the actual number of shares is likely to differ from previous estimates. Compensation expense is ultimately adjusted based on the actual achievement of service and performance targets.

During the three months ended March 31, 2016 and 2015, SJI granted 32,882 and 25,398 restricted shares, respectively, to Directors.  Shares issued to Directors vest over twelve months and contain no performance conditions. As a result, 100% of the shares granted generally vest.

The following table summarizes the nonvested restricted stock awards outstanding at March 31, 2016 and the assumptions used to estimate the fair value of the awards:

	Grants	Shares Outstanding	Fair Value Per Share		Expected Volatility		Risk-Free Interest Rate
Officers & Key Employees -	2014 - TSR	51,042	$	21.31	20.0	%	0.80	%
	2014 - EPS	51,042	$	27.22	N/A		N/A
	2015 - TSR	34,406	$	26.31	16.0	%	1.10	%
	2015 - EPS, ROE, Time	75,300	$	29.47	N/A		N/A
	2016 - TSR	67,466	$	22.01	18.1	%	1.31	%
	2016 - EE, Time	125,294	$	23.52	N/A		N/A
Directors -	2016	32,882	$	23.52	N/A		N/A

Expected volatility is based on the actual volatility of SJI’s share price over the preceding three-year period as of the valuation date. The risk-free interest rate is based on the zero-coupon U.S. Treasury Bond, with a term equal to the three-year term of the Officers’ and other key employees’ restricted shares. As notional dividend equivalents are credited to the holders during the three-year service period, no reduction to the fair value of the award is required. As the Directors’ restricted stock awards contain no performance conditions and dividends are paid or credited to the holder during the requisite service period, the fair value of these awards are equal to the market value of the shares on the date of grant.

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The following table summarizes the total stock-based compensation cost for the three months ended March 31, 2016 and 2015 (in thousands):

	Three Months Ended March 31,
	2016			2015
Officers & Key Employees	$	817		$	799
Directors	193			186
Total Cost	1,010			985
Capitalized	(106		)	(91		)
Net Expense	$	904		$	894

As of March 31, 2016, there was $6.5 million of total unrecognized compensation cost related to nonvested stock-based compensation awards granted under the plans. That cost is expected to be recognized over a weighted average period of 2.2 years.

The following table summarizes information regarding restricted stock award activity during the three months ended March 31, 2016, excluding accrued dividend equivalents:

	Officers &Other Key Employees		Directors		Weighted Average Fair Value
Nonvested Shares Outstanding, January 1, 2016	226,191		26,338		$	26.89
Granted	192,760		32,882		$	23.07
Cancelled/Forfeited	(1,154	)	—		$	26.24
Vested	(13,247	)	(26,338	)	$	29.30
Nonvested Shares Outstanding, March 31, 2016	404,550		32,882		$	24.70

Performance targets during the three-year vesting period were not attained for the 2012 or 2013 Officer and other key employee grants that vested at December 31, 2014 and 2015, respectively. As a result, no shares were awarded in 2015 or 2016 associated with those grants. However, the initial performance hurdle for the 2015 time-based grant was met. As a result, 13,247 shares were awarded to Officers and other key employees during the three months ended March 31, 2016 at a market value of $0.3 million. During the three months ended March 31, 2016 and 2015, SJI granted 32,882 and 25,398 shares to its Directors at a market value of $0.8 million and $0.7 million, respectively. The Company has a policy of issuing new shares to satisfy its obligations under the Plan; therefore, there are no cash payment requirements resulting from the normal operation of the Plan. However, a change in control could result in such shares becoming nonforfeitable or immediately payable in cash.  At the discretion of the Officers, Directors and other key employees, the receipt of vested shares can be deferred until future periods.  These deferred shares are included in Treasury Stock on the condensed consolidated balance sheets.

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3. AFFILIATIONS AND DISCONTINUED OPERATIONS:

AFFILIATIONS — The following affiliated entities are accounted for under the equity method:

Energenic – US, LLC (Energenic) - Marina and a joint venture partner formed Energenic, in which Marina has a 50% equity interest. Energenic develops and operates on-site, self-contained, energy-related projects.

On December 31, 2015, Energenic, Marina and its joint venture partner entered into two Equity Distribution and Purchase Agreements (the "Transaction"), pursuant to which Marina became the sole owner of eight of the Energenic projects ("Marina Projects") and its joint venture partner became the sole owner of seven other Energenic projects ("Partner Projects"). The Transaction has been accounted for as a distribution of member interests by Energenic to its owners and a business combination through the exchange of member interests in various projects between Marina and its joint venture partner. In connection with the exchange, the joint venture partner provided a $19.5 million note payable to Marina. The note and other existing obligations of the joint venture partner to Marina are included in Notes Receivable on the condensed consolidated balance sheets, with approximately $1.8 million being included as a current asset as of March 31, 2016, as it is due within one year. This note is collateralized by security interests in various energy project assets owned by the joint venture partner, as well as personal guarantees from its principals.

As part of the transaction, each party is relieved of any guarantees related to the Projects in which it no longer has an ownership interest.

The projects that are now wholly-owned by Marina are ACB, ACLE, BCLE, SCLE, SXLE, MCS, NBS and SBS.

Through December 31, 2015, Marina’s investment in Energenic was accounted for under the equity method of accounting. As such, Marina’s share of the equity value of the projects was included within Investment in Affiliates on the condensed consolidated balance sheets and Marina’s share of the loss or earnings from the projects for the three months ended March 31, 2015 was included within Equity in Earnings of Affiliated Companies on the condensed consolidated statements of income. As of December 31, 2015, the assets and liabilities of the projects that are now wholly-owned by Marina are consolidated into the condensed consolidated balance sheets. Beginning in 2016, the respective results from operations and cash flows of the projects that are now wholly-owned by Marina are consolidated into the condensed consolidated statements of income and cash flows. The results of the acquired projects are included in the On-Site Energy Production segment.

The following table summarizes the preliminary purchase price allocation and reflects 100% of the fair values of the assets acquired and the liabilities assumed by the Company in connection with the Transaction. The Company is still awaiting final valuation reports supporting the allocation of the purchase price to certain identifiable intangibles. Total consideration for the step acquisition of the remaining interest in the Marina Projects was $46.0 million, which represents the fair value of the Company’s interest in the Partner Projects exchanged ($31.5 million) as well as the existing value of the Marina Projects immediately prior to the exchange ($14.5 million) (in thousands):

Current assets (excluding inventory)	$	7,804
Inventory	3,154
Note Receivable Received	19,504
Fixed Assets	41,190
Intangible Assets:
Identifiable Intangibles	22,220
Goodwill	8,139
Non-Current Assets	1,873
Current Liabilities	(8,196		)
Note Payable - Affiliate	(16,986		)
Long-Term Debt, including current portion	(21,642		)
Capital Lease Payable	(10,458		)
Other Non-Current Liabilities	(572		)
Fair Value of Consolidated Assets and Liabilities of Acquired Projects	$	46,030

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The recorded amounts for assets and liabilities represent the Company's best estimate as of March 31, 2016. The measurement period adjustments recorded during the three months ended March 31, 2016 did not have a significant impact on the Company's condensed consolidated balance sheet. The pro forma impact of this transaction on the operations of the Company is not significant.

Potato Creek, LLC (Potato Creek) - SJI and a joint venture partner formed Potato Creek, in which SJI has a 30% equity interest.  Potato Creek owns and manages the oil, gas and mineral rights of certain real estate in Pennsylvania.

PennEast Pipeline Company, LLC (PennEast) - Midstream has a 20% investment in PennEast, which is planning to construct an approximately 100-mile natural gas pipeline that will extend from Northeastern Pennsylvania into New Jersey, with a target completion of 2018.

During the first three months of 2016 and 2015, the Company made net investments in unconsolidated affiliates of $1.5 million and $1.7 million, respectively.  As of March 31, 2016 and December 31, 2015, the outstanding balance of Notes Receivable – Affiliate was $14.8 million and $16.4 million, respectively. As of March 31, 2016, approximately $13.7 million of these notes are secured by property, plant and equipment of the affiliates, accrue interest at 7.5% and are to be repaid through 2025. The remaining $1.1 million of these notes are unsecured and accrue interest at variable rates.

SJI holds significant variable interests in these entities but is not the primary beneficiary. Consequently, these entities are accounted for under the equity method because SJI does not have both a) the power to direct the activities of the entity that most significantly impact the entity’s economic performance and b) the obligation to absorb losses of the entity that could potentially be significant to the entity or the right to receive benefits from the entity that could potentially be significant to the entity. As of March 31, 2016, the Company had a net asset of approximately $20.3 million included in Investment in Affiliates on the condensed consolidated balance sheets related to equity method investees, in addition to Notes Receivable – Affiliate as discussed above. SJI’s maximum exposure to loss from these entities as of March 31, 2016, is limited to its combined equity contributions and the Notes Receivable-Affiliate in the aggregate amount of $35.1 million.

DISCONTINUED OPERATIONS - Discontinued Operations consist of the environmental remediation activities related to the properties of South Jersey Fuel, Inc. (SJF) and the product liability litigation and environmental remediation activities related to the prior business of The Morie Company, Inc. (Morie). SJF is a subsidiary of Energy & Minerals, Inc. (EMI), an SJI subsidiary, which previously operated a fuel oil business. Morie is the former sand mining and processing subsidiary of EMI. EMI sold the common stock of Morie in 1996.

SJI conducts tests annually to estimate the environmental remediation costs for these properties.

Summarized operating results of the discontinued operations for the three months endedMarch 31, 2016 and 2015, were (in thousands, except per share amounts):

	Three Months Ended March 31,
	2016			2015
Loss before Income Taxes:
Sand Mining	$	(146	)	$	(347	)
Fuel Oil	(35		)	(66		)
Income Tax Benefits	63			137
Loss from Discontinued Operations — Net	$	(118	)	$	(276	)
Earnings Per Common Share from
Discontinued Operations — Net:
Basic and Diluted	$	—		$	—

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4. COMMON STOCK:

The following shares were issued and outstanding:

	2016
Beginning Balance, January 1	70,965,622
New Issues During the Period:
Dividend Reinvestment Plan	229,522
Stock-Based Compensation Plan	43,023
Ending Balance, March 31	71,238,167

The par value ($1.25 per share) of stock issued was recorded in Common Stock and the net excess over par value of approximately $6.1 million was recorded in Premium on Common Stock.

EARNINGS PER COMMON SHARE (EPS) - Basic EPS is based on the weighted-average number of common shares outstanding.  The incremental shares required for inclusion in the denominator for the diluted EPS calculation were 288,502 and 220,762 for the three months ended March 31, 2016 and 2015, respectively. These shares relate to SJI's restricted stock as discussed in Note 2.

DIVIDEND REINVESTMENT PLAN (DRP) - The Company offers a DRP which allows participating shareholders to purchase shares of SJI common stock by automatic reinvestment of dividends or optional purchases. Shares of common stock offered by the DRP have been issued directly by SJI from its authorized but unissued shares of common stock. The Company raised $5.6 million and $1.9 million of equity capital through the DRP during the three months ended March 31, 2016 and 2015, respectively.

5. FINANCIAL INSTRUMENTS:

RESTRICTED INVESTMENTS — Marina is required to maintain escrow accounts related to ongoing capital projects as well as unused loan proceeds pending approval of construction expenditures. As of March 31, 2016 and December 31, 2015, the escrowed funds, including interest earned, totaled $3.2 million and $3.4 million, respectively.

The Company maintains margin accounts with selected counterparties to support its risk management activities. The balances required to be held in these margin accounts increase as the net value of the outstanding energy-related contracts with the respective counterparties decrease. As of March 31, 2016 and December 31, 2015, the balances in these accounts totaled $34.7 million and $43.7 million, respectively.

As of December 31, 2015, in accordance with an outstanding loan agreement which ACB had with a third party, ACB was required to maintain control accounts which included a debt service reserve of $1.7 million. In January 2016, the remaining debt on the loan agreement was paid (see Note 14); as such, there was no reserve as of March 31, 2016.

The carrying amounts of the Restricted Investments approximate their fair values at March 31, 2016 and December 31, 2015, which would be included in Level 1 of the fair value hierarchy (see Note 13).

INVESTMENT IN AFFILIATES - During 2011, subsidiaries of Energenic, in which Marina has a 50% equity interest, entered into 20-year contracts to build, own and operate a central energy center and energy distribution system for a new hotel, casino and entertainment complex in Atlantic City, New Jersey. The complex commenced operations in April 2012, and as a result, Energenic subsidiaries began providing full energy services to the complex. 

In June 2014, the parent company of the hotel, casino and entertainment complex filed petitions in U.S. Bankruptcy Court to facilitate a sale of substantially all of its assets. The complex ceased normal business operations in September 2014. Energenic subsidiaries continued to provide limited energy services to the complex during the shutdown period under a temporary agreement with the trustee. The hotel, casino and entertainment complex was sold in April 2015. As of December 31, 2015, the Energenic subsidiaries were providing limited services to the complex under a short-term agreement with the new owner. However, the Energenic subsidiaries had not been able to secure a permanent or long-term energy services agreement with the new owner.

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In 2015 management of the Company and Energenic evaluated the carrying value of the investment in this project and a related note receivable. Based on the inability of the Energenic subsidiaries to secure a permanent or long-term energy services agreement, the Company recorded a $7.7 million (net of tax) non-cash charge to earnings during the second quarter of 2015 due to the reduction in the carrying value of the investment in this project recorded by Energenic. This charge was included in Equity in Loss of Affiliated Companies during the second quarter of 2015 on the condensed consolidated statements of income. Estimating the fair value of an investment is highly judgmental and involves the use of significant estimates and assumptions. Actual results may differ significantly from those used to develop this estimate.

The central energy center and energy distribution system owned by the Energenic subsidiaries was financed in part by the issuance of bonds during 2011. These bonds were collateralized primarily by certain assets of the central energy center and revenue from the energy services agreement with the hotel, casino and entertainment complex. During 2015, due to the cessation of normal business operations of the complex and the inability of the Energenic subsidiaries to meet its obligations under the bonds, the trustee for the bondholders filed suit to foreclose on certain assets of the central energy center. In November 2015 during settlement discussions, the bondholders alleged, among other things, that they were entitled to recover from Energenic itself, any amounts owed under the bonds that were not covered by the collateral, including principal, interest and attorney’s fees. The bondholders’ assertion was based on inconsistent language in the bond documents. In January 2016, Energenic and certain subsidiaries reached a multi-party settlement with the bondholders. This agreement resolves all outstanding litigation and transfers ownership of the bondholders’ collateral to the owners of the entertainment complex. The Company’s share of this settlement was $7.5 million, which was accrued by Energenic as of December 31, 2015 and paid in 2016. Management of Energenic is currently in active settlement discussions and believes that this amount is recoverable from its insurance carrier and external legal advisors.

As of March 31, 2016, the Company, through its investment in Energenic, had a remaining net asset of approximately $1.4 million included in Investment in Affiliates on the condensed consolidated balance sheets related to cogeneration assets for this project. In addition, the Company had approximately $13.7 million included in Notes Receivable - Affiliate on the condensed consolidated balance sheets, due from Energenic, which is secured by those cogeneration assets. This note is subject to a reimbursement agreement that secures reimbursement for the Company, from its joint venture partner, of a proportionate share of any amounts that are not repaid.

Management will continue to monitor the situation surrounding the complex and will evaluate the carrying value of the investment and the note receivable as future events occur.

NOTE RECEIVABLE - In June 2015, SJG advanced $10.0 million to a not-for-profit organization formed to spur economic development in Atlantic City, New Jersey, of which $0.1 million was repaid. The note bears interest at 1.0% for an initial term of six months, with the borrower’s option to extend the term for two additional terms of three months each. In December 2015 and February 2016, the borrower exercised each option, respectively. SJG holds a first lien security interest on land in Atlantic City as collateral against this note.  The carrying amount of this receivable approximates its fair value at March 31, 2016 and December 31, 2015, which would be included in Level 2 of the fair value hierarchy (see Note 13).

LONG-TERM RECEIVABLES — SJG provides financing to customers for the purpose of attracting conversions to natural gas heating systems from competing fuel sources.  The terms of these loans call for customers to make monthly payments over a period of up to five to ten years with no interest.  The carrying amounts of such loans were $12.2 million and $12.9 million as of March 31, 2016 and December 31, 2015, respectively. The current portion of these receivables is reflected in Accounts Receivable and the non-current portion is reflected in Contract Receivables on the condensed consolidated balance sheets. The carrying amounts noted above are net of unamortized discounts resulting from imputed interest in the amount of $1.2 million and $1.3 million as of March 31, 2016 and December 31, 2015, respectively.  The annualized amortization to interest is not material to the Company’s condensed consolidated financial statements.  The carrying amounts of these receivables approximate their fair value at March 31, 2016 and December 31, 2015, which would be included in Level 2 of the fair value hierarchy (see Note 13).

CREDIT RISK - As of March 31, 2016, approximately $12.3 million, or 15.9%, of the current and noncurrent Derivatives – Energy Related Assets are transacted with one counterparty. This counterparty has contracts with a large number of diverse customers which minimizes the concentration of this risk. A portion of these contracts may be assigned to SJI in the event of default by the counterparty.

FINANCIAL INSTRUMENTS NOT CARRIED AT FAIR VALUE - The fair value of a financial instrument is the market price to sell an asset or transfer a liability at the measurement date. The carrying amounts of SJI's financial instruments approximate their fair values at March 31, 2016 and December 31, 2015, except as noted below.

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• For Long-Term Debt, in estimating the fair value, we use the present value of remaining cash flows at the balance sheet date. We based the estimates on interest rates available to SJI at the end of each period for debt with similar terms and maturities (Level 2 in the fair value hierarchy, see Note 13). The estimated fair values of SJI's long-term debt, including current maturities, as of March 31, 2016 and December 31, 2015, were $1,143.0 million and $1,079.0 million, respectively.  The carrying amounts of SJI's long-term debt, including current maturities, as of March 31, 2016 and December 31, 2015, were $1,075.6 million and $1,026.9 million, respectively. The carrying amounts as of March 31, 2016 and December 31, 2015 are net of unamortized debt issuance costs of $8.4 million and $9.0 million, respectively (see Note 1).

OTHER FINANCIAL INSTRUMENTS - The carrying amounts of SJI's other financial instruments approximate their fair values at March 31, 2016 and December 31, 2015.

6. SEGMENTS OF BUSINESS:

SJI operates in several different reportable operating segments which reflect the financial information regularly evaluated by the chief operating decision maker. These segments are as follows:

• Gas utility operations (SJG) consist primarily of natural gas distribution to residential, commercial and industrial customers.

• Wholesale energy operations include the activities of SJRG and SJEX.

• SJE is involved in both retail gas and retail electric activities.

◦ Retail gas and other operations include natural gas acquisition and transportation service business lines.

◦ Retail electric operations consist of electricity acquisition and transportation to commercial, industrial and residential customers.

• On-site energy production consists of Marina's thermal energy facility and other energy-related projects. Also included in this segment are the activities of ACB, ACLE, BCLE, SCLE, SXLE, MCS, NBS and SBS. These entities became wholly-owned subsidiaries of Marina on December 31, 2015 (see Note 3).

• Appliance service operations includes SJESP’s servicing of appliances under warranty via a subcontractor arrangement as well as on a time and materials basis. 

• The activities of Midstream are a part of the Corporate and Services segment.

SJI groups its nonutility operations into two categories: Energy Group and Energy Services. Energy Group includes wholesale energy, retail gas and other, and retail electric operations. Energy Services includes on-site energy production and appliance service operations. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Intersegment sales and transfers are treated as if the sales or transfers were to third parties at current market prices.

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Information about SJI’s operations in different reportable operating segments is presented below (in thousands):

	Three Months Ended March 31,
	2016			2015
Operating Revenues:
Gas Utility Operations	$	187,766		$	267,658
Energy Group:
Wholesale Energy Operations	65,074			35,345
Retail Gas and Other Operations	29,733			38,078
Retail Electric Operations	39,491			29,777
Subtotal Energy Group	134,298			103,200
Energy Services:
On-Site Energy Production	16,321			13,572
Appliance Service Operations	1,888			2,357
Subtotal Energy Services	18,209			15,929
Corporate and Services	8,876			9,086
Subtotal	349,149			395,873
Intersegment Sales	(16,114		)	(12,921		)
Total Operating Revenues	$	333,035		$	382,952

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	Three Months Ended March 31,
	2016			2015
Operating Income:
Gas Utility Operations	$	75,773		$	73,189
Energy Group:
Wholesale Energy Operations	38,244			330
Retail Gas and Other Operations	(759		)	3,087
Retail Electric Operations	585			(182		)
Subtotal Energy Group	38,070			3,235
Energy Services:
On-Site Energy Production	(89		)	(482		)
Appliance Service Operations	44			(52		)
Subtotal Energy Services	(45		)	(534		)
Corporate and Services	455			481
Total Operating Income	$	114,253		$	76,371
Depreciation and Amortization:
Gas Utility Operations	$	15,626		$	14,167
Energy Group:
Wholesale Energy Operations	204			32
Retail Gas and Other Operations	85			20
Subtotal Energy Group	289			52
Energy Services:
On-Site Energy Production	9,919			7,051
Appliance Service Operations	84			74
Subtotal Energy Services	10,003			7,125
Corporate and Services	223			242
Total Depreciation and Amortization	$	26,141		$	21,586
Interest Charges:
Gas Utility Operations	$	4,787		$	5,190
Energy Group:
Wholesale Energy Operations	64			242
Retail Gas and Other Operations	132			73
Subtotal Energy Group	196			315
Energy Services:
On-Site Energy Production	3,462			2,315
Corporate and Services	3,452			2,988
Subtotal	11,897			10,808
Intersegment Borrowings	(2,737		)	(2,207		)
Total Interest Charges	$	9,160		$	8,601

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	Three Months Ended March 31,
	2016			2015
Income Taxes:
Gas Utility Operations	$	27,404		$	26,172
Energy Group:
Wholesale Energy Operations	14,737			867
Retail Gas and Other Operations	(168		)	1,576
Retail Electric Operations	239			(74		)
Subtotal Energy Group	14,808			2,369
Energy Services:
On-Site Energy Production	(3,012		)	(12,047		)
Appliance Service Operations	26			(8		)
Subtotal Energy Services	(2,986		)	(12,055		)
Corporate and Services	41			127
Total Income Taxes	$	39,267		$	16,613
Property Additions:
Gas Utility Operations	$	51,370		$	43,326
Energy Group:
Wholesale Energy Operations	6			4
Retail Gas and Other Operations	371			729
Subtotal Energy Group	377			733
Energy Services:
On-Site Energy Production	2,651			4,381
Appliance Service Operations	101			116
Subtotal Energy Services	2,752			4,497
Corporate and Services	163			1,064
Total Property Additions	$	54,662		$	49,620

	March 31, 2016			December 31, 2015
Identifiable Assets (See Note 1):
Gas Utility Operations	$	2,365,728		$	2,281,576
Energy Group:
Wholesale Energy Operations	174,326			231,660
Retail Gas and Other Operations	60,178			55,111
Retail Electric Operations	51,239			55,528
Subtotal Energy Group	285,743			342,299
Energy Services:
On-Site Energy Production	784,474			790,231
Appliance Service Operations	3,849			4,885
Subtotal Energy Services	788,323			795,116
Discontinued Operations	1,542			1,545
Corporate and Services	648,213			652,325
Intersegment Assets	(595,565		)	(600,928		)
Total Identifiable Assets	$	3,493,984		$	3,471,933

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7. RATES AND REGULATORY ACTIONS:

SJG is subject to the rules and regulations of the New Jersey Board of Public Utilities (BPU).

In January 2016, SJG provided a BGSS bill credit of approximately $20.0 million to its residential and small commercial customers. This credit is in addition to an overall rate reduction of 10.3% that was approved by the BPU and took effect in October 2015. SJG’s ability to offer the BGSS bill credit is a direct result of lower wholesale natural gas prices and the overall management of its gas supply portfolio. The BGSS clause serves as a method to pass along increases or decreases in gas costs to customers; therefore, SJG’s income is not affected by BGSS rate adjustments or bill credits.

On February 29, 2016, SJG filed a petition with the BPU for approval to continue its Accelerated Infrastructure Replacement Program (AIRP), which will expire at the end of 2016. In its petition, SJG has requested approval to continue its AIRP for an additional seven years, with program investments totaling approximately $500.0 million, to retire and replace bare steel and cast iron mains, bare steel services, and other aging infrastructure. The petition proposes to recover the costs of, and a return on, future AIRP investments through annual base rate adjustments. The petition also includes a request to reflect in base rates approximately $76.0 million of AIRP investments that will have been made since the conclusion of SJG’s last base rate case in October 2014 through the end 2016.

In February 2016, the BPU approved a $7.9 million revenue decrease to SJG’s Energy Efficiency Tracker (EET), which recovers the cost of, and an allowed return on, investments in Energy Efficiency Programs (EEP). SJG’s original EEPs and its first EEP Extension, approved by the BPU in 2009 and 2013, respectively, ended in July 2013 and August 2015, respectively. The revenue requirements associated with these prior investments decrease over time as they are amortized and recovered. SJG is continuing to make energy efficiency investments under its most recent EEP Extension, which was approved by the BPU in August 2015, and is recovering the costs, and the allowed return on, those investments through the EET.

There have been no other significant regulatory actions or changes to SJG's rate structure since December 31, 2015. See Note 10 to the Consolidated Financial Statements in Item 8 of SJI's Annual Report on Form 10-K for the year ended December 31, 2015.

8. REGULATORY ASSETS & REGULATORY LIABILITIES:

There have been no significant changes to the nature of the Company’s regulatory assets and liabilities since December 31, 2015, which are described in Note 11 to the Consolidated Financial Statements in Item 8 of SJI’s Annual Report on Form 10-K for the year ended December 31, 2015.

Regulatory Assets consisted of the following items (in thousands):

	March 31, 2016		December 31, 2015
Environmental Remediation Costs:
Expended - Net	$	47,023	$	42,032
Liability for Future Expenditures	136,779		123,194
Deferred Asset Retirement Obligation Costs	42,515		42,430
Deferred Pension and Other Postretirement Benefit Costs	79,779		79,779
Deferred Gas Costs - Net	—		2,701
Conservation Incentive Program Receivable	19,205		2,624
Deferred Interest Rate Contracts	9,379		7,631
Energy Efficiency Tracker	—		496
Pipeline Supplier Service Charges	3,360		3,776
Pipeline Integrity Cost	4,310		4,596
AFUDC - Equity Related Deferrals	11,638		11,423
Other Regulatory Assets	2,974		2,752
Total Regulatory Assets	$	356,962	$	323,434

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ENVIRONMENTAL REMEDIATION COSTS - SJG has two regulatory assets associated with environmental costs related to the cleanup of 12 sites where SJG or its predecessors previously operated gas manufacturing plants. The first asset, "Environmental Remediation Cost: Expended - Net," represents what was actually spent to clean up the sites, less recoveries through the Remediation Adjustment Clause (RAC) and insurance carriers. These costs meet the deferral requirements of GAAP, as the BPU allows SJG to recover such expenditures through the RAC. The other asset, "Environmental Remediation Cost: Liability for Future Expenditures," relates to estimated future expenditures required to complete the remediation of these sites. SJG recorded this estimated amount as a regulatory asset with the corresponding current and noncurrent liabilities on the balance sheets under the captions "Current Liabilities" and "Deferred Credits and Other Noncurrent Liabilities." The BPU allows SJG to recover the deferred costs over seven-year periods after they are spent. The increase from December 31, 2015 is a result of expenditures made during the first three months of 2016 and an increase in the expected future expenditures for remediation activities.

DEFERRED GAS COSTS - NET - See discussion under "Deferred Revenues - Net" below.

CONSERVATION INCENTIVE PROGRAM (CIP) RECEIVABLE – The CIP tracking mechanism adjusts earnings when actual usage per customer experienced during the period varies from an established baseline usage per customer. Actual usage per customer was less than the established baseline during the 2015 - 2016 winter season, and more notably, during the first three months of 2016, resulting in an increase in the receivable. This is primarily the result of extremely warm weather experienced in the region.

Regulatory Liabilities consisted of the following items (in thousands):

	March 31, 2016		December 31, 2015
Excess Plant Removal Costs	$	32,294	$	32,644
Deferred Revenues - Net	11,241		—
Societal Benefit Costs	9,454		10,197
Energy Efficiency Tracker	2,384		—
Total Regulatory Liabilities	$	55,373	$	42,841

DEFERRED REVENUES - NET - Over/under collections of gas costs are monitored through SJG's BGSS mechanism. Net under collected gas costs are classified as a regulatory asset and net over collected gas costs are classified as a regulatory liability. Derivative contracts used to hedge natural gas purchases are also included in the BGSS, subject to BPU approval. The BGSS changed from a $2.7 million regulatory asset at December 31, 2015 to a $11.2 million regulatory liability at March 31, 2016 primarily due to the gas costs recovered from customers exceeding the actual cost of the commodity. SJG typically over collects during the winter season when throughput is high and under collects during the summer season when throughput is low.

ENERGY EFFICIENCY TRACKER (EET) - This regulatory liability primarily represents energy efficiency measures installed in customer homes and businesses. The change from a $0.5 million regulatory asset at December 31, 2015 to a $2.4 million regulatory liability at March 31, 2016 is due to recoveries being greater than the cost of, and allowed return on, investments in the Energy Efficiency Programs. In February 2016, the BPU approved a $7.9 million revenue decrease to SJG’s EET (see Note 7).

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9. PENSION AND OTHER POSTRETIREMENT BENEFITS:

For the three months ended March 31, 2016 and 2015, net periodic benefit cost related to the employee and officer pension and other postretirement benefit plans consisted of the following components (in thousands):

	Pension Benefits
	Three Months Ended March 31,
	2016			2015
Service Cost	$	1,315		$	1,443
Interest Cost	3,000			2,770
Expected Return on Plan Assets	(3,380		)	(3,699		)
Amortizations:
Prior Service Cost	53			53
Actuarial Loss	2,309			2,656
Net Periodic Benefit Cost	3,297			3,223
Capitalized Benefit Cost	(1,187		)	(1,239		)
Deferred Benefit Cost	(161		)	—
Total Net Periodic Benefit Expense	$	1,949		$	1,984

	Other Postretirement Benefits
	Three Months Ended March 31,
	2016			2015
Service Cost	$	230		$	327
Interest Cost	653			771
Expected Return on Plan Assets	(776		)	(748		)
Amortizations:
Prior Service Cost	(86		)	152
Actuarial Loss	294			384
Net Periodic Benefit Cost	315			886
Capitalized Benefit Cost	(101		)	(256		)
Total Net Periodic Benefit Expense	$	214		$	630

Capitalized benefit costs reflected in the table above relate to SJG’s construction program. Deferred benefit costs relate to SJG's deferral of incremental expense associated with the adoption of new mortality tables effective December 31, 2014 and 2015. Deferred benefit costs are expected to be recovered through rates as part of SJG's next base rate case.

SJI contributed $15.0 million to the pension plans in January 2015. No contributions were made to the pension plans during the three months ended March 31, 2016. SJI does not expect to make any contributions to the pension plans in 2016; however, changes in future investment performance and discount rates may ultimately result in a contribution. Payments related to the unfunded supplemental executive retirement plan (SERP) are expected to approximate $2.3 million in 2016. SJG also has a regulatory obligation to contribute approximately $3.6 million annually to the other postretirement benefit plans’ trusts, less direct costs incurred.

See Note 12 to the Consolidated Financial Statements in Item 8 of SJI’s Annual Report on Form 10-K for the year ended December 31, 2015, for additional information related to SJI’s pension and other postretirement benefits.

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10. LINES OF CREDIT:

Credit facilities and available liquidity as of March 31, 2016 were as follows (in thousands):

Company	Total Facility		Usage			Available Liquidity		Expiration Date
SJG:
Commercial Paper Program/Revolving Credit Facility	$	200,000	$	66,900	(A)	$	133,100	May 2018
Uncommitted Bank Lines	10,000		—			10,000		August 2016
Total SJG	210,000		66,900			143,100
SJI:
Revolving Credit Facility	400,000		278,000		(B)	122,000		February 2018
Total SJI	400,000		278,000			122,000
Total	$	610,000	$	344,900		$	265,100

(A) Includes letters of credit outstanding in the amount of $2.1 million.

(B) Includes letters of credit outstanding in the amount of $3.3 million.

The SJG facilities are restricted as to use and availability specifically to SJG; however, if necessary, the SJI facilities can also be used to support SJG’s liquidity needs. Borrowings under these credit facilities are at market rates. The weighted average interest rate on these borrowings, which changes daily, was 1.34% and 0.88% at March 31, 2016 and 2015, respectively. Average borrowings outstanding under these credit facilities, not including letters of credit, during the three months ended March 31, 2016 and 2015 were $394.6 million and $274.1 million, respectively. The maximum amounts outstanding under these credit facilities, not including letters of credit, during the three months ended March 31, 2016 and 2015 were $467.7 million and $329.4 million, respectively.

The SJI and SJG facilities are provided by a syndicate of banks and contain one financial covenant limiting the ratio of indebtedness to total capitalization (as defined in the respective credit agreements) to not more than 0.65 to 1, measured at the end of each fiscal quarter. SJI and SJG were in compliance with this covenant as of March 31, 2016.

SJG has a commercial paper program under which SJG may issue short-term, unsecured promissory notes to qualified investors up to a maximum aggregate amount outstanding at any time of $200.0 million.  The notes have fixed maturities which vary by note, but may not exceed 270 days from the date of issue. Proceeds from the notes are used for general corporate purposes.  SJG uses the commercial paper program in tandem with its $200.0 million revolving credit facility and does not expect the principal amount of borrowings outstanding under the commercial paper program and the credit facility at any time to exceed an aggregate of $200.0 million.

In March 2016, the Company entered into amendments to three separate letter of credit reimbursement agreements in connection with letters of credit that were set to expire on March 15, 2016. The letters of credit are in the aggregate amount of $62.3 million and support three outstanding series of bonds issued by Marina, in the amounts of $16.4 million, $20.0 million and $25.0 million. Each of the three amendments was entered into in connection with the extension of its respective letter of credit until March 15, 2018, and each amendment provides for the Company to reimburse the issuing bank for any draws under the related letter of credit.

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11. COMMITMENTS AND CONTINGENCIES:

GUARANTEES — As part of the Transaction involving the Energenic projects (see Note 3), the Company is relieved of any guarantees from prior periods related to the projects in which it no longer has an ownership interest.

As of March 31, 2016, SJI had issued $6.2 million of parental guarantees on behalf of an unconsolidated subsidiary. These guarantees generally expire within the next two years and were issued to enable our subsidiary to market retail natural gas.

COLLECTIVE BARGAINING AGREEMENTS— Unionized personnel represent approximately 45% of our workforce at March 31, 2016. The Company has collective bargaining agreements with two unions that represent these employees: the International Brotherhood of Electrical Workers (IBEW) Local 1293 and the International Association of Machinists and Aerospace Workers (IAM) Local 76.  SJG and SJESP employees represented by the IBEW operate under collective bargaining agreements that run through February 2017. The remaining unionized employees are represented by the IAM and operate under collective bargaining agreements that run through August 2017.

STANDBY LETTERS OF CREDIT — As of March 31, 2016, SJI provided $3.3 million of standby letters of credit through its revolving credit facility to enable SJE to market retail electricity and for various construction and operating activities. SJG provided a $2.1 million letter of credit under its revolving credit facility to support the remediation of environmental conditions at certain locations in SJG's service territory. The Company has also provided $87.5 million of additional letters of credit under separate facilities outside of the revolving credit facilities to support variable-rate demand bonds issued through the New Jersey Economic Development Authority (NJEDA) to finance the expansion of SJG’s natural gas distribution system and to finance Marina's initial thermal plant project.

PENDING LITIGATION — The Company is subject to claims arising in the ordinary course of business and other legal proceedings. The Company has been named in, among other actions, certain gas supply and capacity management contract disputes and certain product liability claims related to our former sand mining subsidiary. We accrue liabilities related to these claims when we can reasonably estimate the amount or range of amounts of probable settlement costs or other charges for these claims. The Company has accrued approximately $3.3 million and $3.2 million related to all claims in the aggregate as of March 31, 2016 and December 31, 2015, respectively. Management does not believe that it is reasonably possible that there will be a material change in the Company's estimated liability in the near term and does not currently anticipate the disposition of any known claims that would have a material effect on the Company's financial position, results of operations or cash flows.

ENVIRONMENTAL REMEDIATION COSTS — SJI incurred and recorded costs for environmental cleanup of 12 sites where SJG or its predecessors operated gas manufacturing plants. SJG stopped manufacturing gas in the 1950s. SJI and some of its nonutility subsidiaries also recorded costs for environmental cleanup of sites where SJF previously operated a fuel oil business and Morie maintained equipment, fueling stations and storage. There have been no changes to the status of the Company’s environmental remediation efforts since December 31, 2015, as described in Note 15 to the Consolidated Financial Statements in Item 8 of SJI’s Annual Report on Form 10-K for the year ended December 31, 2015.

12. DERIVATIVE INSTRUMENTS:

Certain SJI subsidiaries are involved in buying, selling, transporting and storing natural gas and buying and selling retail electricity for their own accounts as well as managing these activities for third parties. These subsidiaries are subject to market risk on expected future purchases and sales due to commodity price fluctuations. The Company uses a variety of derivative instruments to limit this exposure to market risk in accordance with strict corporate guidelines.  These derivative instruments include forward contracts, swap agreements, options contracts and futures contracts. As of March 31, 2016, the Company had outstanding derivative contracts intended to limit the exposure to market risk on 71.9 MMdts (1 MMdts = one million decatherms) of expected future purchases of natural gas, 59.2 MMdts of expected future sales of natural gas, 2.6 MMmwh (1 MMmwh = one million megawatt hours) of expected future purchases of electricity and 2.4 MMmwh of expected future sales of electricity. In addition to these derivative contracts, the Company has basis and index related purchase and sales contracts totaling 169.6 MMdts.  These contracts, which have not been designated as hedging instruments under GAAP, are measured at fair value and recorded in Derivatives - Energy Related Assets or Derivatives - Energy Related Liabilities on the condensed consolidated balance sheets. The net unrealized pre-tax gains and losses for these energy-related commodity contracts are included with realized gains and losses in Operating Revenues – Nonutility.

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The Company has also entered into interest rate derivatives to hedge exposure to increasing interest rates and the impact of those rates on cash flows of variable-rate debt. These interest rate derivatives, some of which had been designated as hedging instruments under GAAP, are measured at fair value and recorded in Derivatives - Other on the condensed consolidated balance sheets. Hedge accounting has been discontinued for these derivatives. As a result, unrealized gains and losses on these derivatives, that were previously included in Accumulated Other Comprehensive Loss (AOCL) on the condensed consolidated balance sheets, are being recorded in earnings over the remaining life of the derivative. These derivatives are expected to mature in 2026.

As of March 31, 2016, SJI’s active interest rate swaps were as follows:

Notional Amount		Fixed Interest Rate	Start Date	Maturity	Type	Obligor
$	14,500,000	3.905%	3/17/2006	1/15/2026	Tax-exempt	Marina
$	500,000	3.905%	3/17/2006	1/15/2026	Tax-exempt	Marina
$	330,000	3.905%	3/17/2006	1/15/2026	Tax-exempt	Marina
$	12,500,000	3.530%	12/1/2006	2/1/2036	Tax-exempt	SJG
$	12,500,000	3.430%	12/1/2006	2/1/2036	Tax-exempt	SJG

The fair values of all derivative instruments, as reflected in the condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015, are as follows (in thousands):

Derivatives not designated as hedging instruments under GAAP	March 31, 2016				December 31, 2015
	Assets		Liabilities		Assets		Liabilities
Energy-related commodity contracts:
Derivatives – Energy Related – Current	$	57,815	$	66,370	$	83,093	$	90,708
Derivatives – Energy Related – Non-Current	19,489		10,148		16,238		21,697
Interest rate contracts:
Derivatives - Other	—		13,118		—		10,943
Total derivatives not designated as hedging instruments under GAAP	$	77,304	$	89,636	$	99,331	$	123,348
Total Derivatives	$	77,304	$	89,636	$	99,331	$	123,348

The Company enters into derivative contracts with counterparties, some of which are subject to master netting arrangements, which allow net settlements under certain conditions. The Company presents derivatives at gross fair values on the condensed consolidated balance sheets. As of March 31, 2016 and December 31, 2015, information related to these offsetting arrangements were as follows (in thousands):

As of March 31, 2016
Description	Gross amounts of recognized assets/liabilities			Gross amount offset in the balance sheet		Net amounts of assets/liabilities in balance sheet			Gross amounts not offset in the balance sheet						Net amount
									Financial Instruments				Cash Collateral Posted
Derivatives - Energy Related Assets	$	77,304		$	—	$	77,304		$	(15,597	)	(A)	$	—	$	61,707
Derivatives - Energy Related Liabilities	$	(76,518	)	$	—	$	(76,518	)	$	15,597		(B)	$	22,020	$	(38,901	)
Derivatives - Other	$	(13,118	)	$	—	$	(13,118	)	$	—			$	—	$	(13,118	)

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As of December 31, 2015
Description	Gross amounts of recognized assets/liabilities			Gross amount offset in the balance sheet		Net amounts of assets/liabilities in balance sheet			Gross amounts not offset in the balance sheet						Net amount
									Financial Instruments				Cash Collateral Posted
Derivatives - Energy Related Assets	$	99,331		$	—	$	99,331		$	(35,491	)	(A)	$	—	$	63,840
Derivatives - Energy Related Liabilities	$	(112,405	)	$	—	$	(112,405	)	$	35,491		(B)	$	23,045	$	(53,869	)
Derivatives - Other	$	(10,943	)	$	—	$	(10,943	)	$	—			$	—	$	(10,943	)

(A) The balances at March 31, 2016 and December 31, 2015 were related to derivative liabilities which can be net settled against derivative assets.

(B) The balances at March 31, 2016 and December 31, 2015 were related to derivative assets which can be net settled against derivative liabilities.

The effect of derivative instruments on the condensed consolidated statements of income for the three months ended March 31, 2016 and 2015 are as follows (in thousands):

	Three Months Ended March 31,
Derivatives in Cash Flow Hedging Relationships under GAAP	2016			2015
Interest Rate Contracts:
Losses recognized in AOCL on effective portion	$	—		$	—
Losses reclassified from AOCL into income (a)	$	(86	)	$	(23	)
Gains (losses) recognized in income on ineffective portion (a)	$	—		$	—

(a) Included in Interest Charges

	Three Months Ended March 31,
Derivatives Not Designated as Hedging Instruments under GAAP	2016			2015
Gains (losses) on energy-related commodity contracts (a)	$	18,655		$	(6,707	)
Losses on interest rate contracts (b)	(427		)	(298		)
Total	$	18,228		$	(7,005	)

(a)  Included in Operating Revenues - Nonutility

(b)  Included in Interest Charges

Net realized loss of $2.8 million and $2.6 million associated with SJG's energy-related financial commodity contracts for the three months ended March 31, 2016 and 2015, respectively, are not included in the above table. These contracts are part of SJG’s regulated risk management activities that serve to mitigate BGSS costs passed on to its customers. As these transactions are entered into pursuant to, and recoverable through, regulatory riders, any changes in the value of SJG’s energy-related financial commodity contracts are deferred in Regulatory Assets or Liabilities, as applicable, and there is no impact to earnings.

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Certain of the Company’s derivative instruments contain provisions that require immediate payment or demand immediate and ongoing collateralization on derivative instruments in net liability positions in the event of a material adverse change in the credit standing of the Company. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a liability position on March 31, 2016, is $33.6 million.  If the credit-risk-related contingent features underlying these agreements were triggered on March 31, 2016, the Company would have been required to settle the instruments immediately or post collateral to its counterparties of approximately $31.5 million after offsetting asset positions with the same counterparties under master netting arrangements.

13. FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES:

GAAP establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques.  The levels of the hierarchy are described below:

• Level 1:  Observable inputs, such as quoted prices in active markets for identical assets or liabilities.

• Level 2:  Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

• Level 3:  Unobservable inputs that reflect the reporting entity’s own assumptions.

Assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and financial liabilities and their placement within the fair value hierarchy.

For financial assets and financial liabilities measured at fair value on a recurring basis, information about the fair value measurements for each major category is as follows (in thousands):

As of March 31, 2016	Total		Level 1		Level 2		Level 3
Assets
Available-for-Sale Securities (A)	$	14,960	$	2,945	$	12,015	$	—
Derivatives – Energy Related Assets (B)	77,304		7,145		15,986		54,173
	$	92,264	$	10,090	$	28,001	$	54,173
Liabilities
Derivatives – Energy Related Liabilities (B)	$	76,518	$	31,858	$	3,728	$	40,932
Derivatives – Other (C)	13,118		—		13,118		—
	$	89,636	$	31,858	$	16,846	$	40,932

As of December 31, 2015	Total		Level 1		Level 2		Level 3
Assets
Available-for-Sale Securities (A)	$	14,810	$	2,925	$	11,885	$	—
Derivatives – Energy Related Assets (B)	99,331		16,006		24,730		58,595
	$	114,141	$	18,931	$	36,615	$	58,595
Liabilities
Derivatives – Energy Related Liabilities (B)	$	112,405	$	42,170	$	11,008	$	59,227
Derivatives – Other (C)	10,943		—		10,943		—
	$	123,348	$	42,170	$	21,951	$	59,227

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(A) Available-for-Sale Securities include securities that are traded in active markets and securities that are not traded publicly. The securities traded in active markets are valued using the quoted principal market close prices that are provided by the trustees and are categorized in Level 1 in the fair value hierarchy. The remaining securities consist of funds that are not publicly traded. These funds, which consist of stocks and bonds that are traded individually in active markets, are valued using quoted prices for similar assets and are categorized in Level 2 in the fair value hierarchy.

(B) Derivatives – Energy Related Assets and Liabilities are traded in both exchange-based and non-exchange-based markets. Exchange-based contracts are valued using unadjusted quoted market sources in active markets and are categorized in Level 1 in the fair value hierarchy. Certain non-exchange-based contracts are valued using indicative price quotations available through brokers or over-the-counter, on-line exchanges and are categorized in Level 2. These price quotations reflect the average of the bid-ask mid-point prices and are obtained from sources that management believes provide the most liquid market. For non-exchange-based derivatives that trade in less liquid markets with limited pricing information, model inputs generally would include both observable and unobservable inputs. In instances where observable data is unavailable, management considers the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks such as liquidity, volatility and contract duration. Such instruments are categorized in Level 3 as the model inputs generally are not observable.

Significant Unobservable Inputs - Management uses the discounted cash flow model to value Level 3 physical and financial forwards, which calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return and credit spreads. Inputs to the valuation model are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third party pricing sources. The validity of the mark-to-market valuations and changes in mark-to-market valuations from period to period are examined and qualified against historical expectations by the risk management function. If any discrepancies are identified during this process, the mark-to-market valuations or the market pricing information is evaluated further and adjusted, if necessary.

Level 3 valuation methods for natural gas derivative contracts include utilizing another location in close proximity adjusted for certain pipeline charges to derive a basis value. The significant unobservable inputs used in the fair value measurement of certain natural gas contracts consist of forward prices developed based on industry-standard methodologies. Significant increases (decreases) in these forward prices for purchases of natural gas would result in a directionally similar impact to the fair value measurement and for sales of natural gas would result in a directionally opposite impact to the fair value measurement. Level 3 valuation methods for electric represent the value of the contract marked to the forward wholesale curve, as provided by daily exchange quotes for delivered electricity. The significant unobservable inputs used in the fair value measurement of electric contracts consist of fixed contracted electric load profiles; therefore, no change in unobservable inputs would occur. Unobservable inputs are updated daily using industry-standard techniques. Management reviews and corroborates the price quotations to ensure the prices are observable which includes consideration of actual transaction volumes, market delivery points, bid-ask spreads and contract duration.

(C) Derivatives – Other are valued using quoted prices on commonly quoted intervals, which are interpolated for periods different than the quoted intervals, as inputs to a market valuation model. Market inputs can generally be verified and model selection does not involve significant management judgment.

The following table provides quantitative information regarding significant unobservable inputs in Level 3 fair value measurements (in thousands):

Type	Fair Value at March 31, 2016		Valuation Technique	Significant Unobservable Input	Range [Weighted Average]
	Assets	Liabilities
Forward Contract - Natural Gas	$27,715	$15,874	Discounted Cash Flow	Forward price (per dt)	$1.03 - $8.92 [$1.93]	(A)
Forward Contract - Electric	$26,458	$25,058	Discounted Cash Flow	Fixed electric load profile (on-peak)	8.47% - 100.00% [56.83%]	(B)
				Fixed electric load profile (off-peak)	0.00% - 91.53% [43.17%]	(B)

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Type	Fair Value at December 31, 2015		Valuation Technique	Significant Unobservable Input	Range [Weighted Average]
	Assets	Liabilities
Forward Contract - Natural Gas	$29,459	$31,733	Discounted Cash Flow	Forward price (per dt)	$(0.77) - $10.00 [$(2.15)]	(A)
Forward Contract - Electric	$29,136	$27,494	Discounted Cash Flow	Fixed electric load profile (on-peak)	8.47% - 100.00% [56.20%]	(B)
				Fixed electric load profile (off-peak)	0.00% - 91.53% [43.80%]	(B)

(A) Represents the range, along with the weighted average, of forward prices for the sale and purchase of natural gas.

(B) Represents the range, along with the weighted average, of the percentage of contracted usage that is loaded during on-peak hours versus off-peak.

The changes in fair value measurements of Derivatives – Energy Related Assets and Liabilities for the three months ended March 31, 2016 and 2015, using significant unobservable inputs (Level 3), are as follows (in thousands):

	Three Months Ended March 31, 2016			Three Months Ended March 31, 2015
Balance at beginning of period	$	(632	)	$	(5,608	)
Other changes in fair value from continuing and new contracts, net	10,015			(16,438		)
Settlements	3,858			4,735
Balance at end of period	$	13,241		$	(17,311	)

Total gains included in earnings for the three months ended March 31, 2016 that are attributable to the change in unrealized gains relating to those assets and liabilities included in Level 3 still held as of March 31, 2016, are $10.0 million.  These gains are included in Operating Revenues-Nonutility on the condensed consolidated statements of income.

14. LONG-TERM DEBT:

In January 2016, the Company paid $12.7 million to retire outstanding debt for ACB.

In January 2016, SJG issued $61.0 million of long-term debt at an average interest rate of 1.37% under a $200.0 million aggregate syndicated bank term facility. The facility is now fully drawn. The total outstanding amount under this facility as of March 31, 2016 is $200.0 million.

The Company did not issue or retire any other long-term debt during the three months ended March 31, 2016.

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15. ACCUMULATED OTHER COMPREHENSIVE LOSS:

The following tables summarize the changes in accumulated other comprehensive loss (AOCL) for the three months ended March 31, 2016 (in thousands):

	Postretirement Liability Adjustment			Unrealized Gain (Loss) on Derivatives-Other			Unrealized Gain (Loss) on Available-for-Sale Securities			Other Comprehensive Income (Loss) of Affiliated Companies			Total
Balance at January 1, 2016 (a)	$	(22,145	)	$	(2,129	)	$	(128	)	$	(97	)	$	(24,499	)
Other comprehensive loss before reclassifications	—			—			63			—			63
Amounts reclassified from AOCL (b)	—			51			(14		)	—			37
Net current period other comprehensive income (loss)	—			51			49			—			100
Balance at March 31, 2016 (a)	$	(22,145	)	$	(2,078	)	$	(79	)	$	(97	)	$	(24,399	)

(a) Determined using a combined average statutory tax rate of 40%.

(b) See table below.

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The following table provides details about reclassifications out of AOCL for the three months ended March 31, 2016:

	Amounts Reclassified from AOCL (in thousands)			Affected Line Item in the Condensed Consolidated Statements of Income
	Three Months Ended March 31, 2016
Unrealized Gain on Derivatives-Other - interest rate contracts designated as cash flow hedges	$	86		Interest Charges
Income Taxes	(35		)	Income Taxes (a)
	$	51
Unrealized Loss on Available-for-Sale Securities	$	(25	)	Other Income
Income Taxes	11			Income Taxes (a)
	$	(14	)
Losses from reclassifications for the period net of tax	$	37

(a) Determined using a combined average statutory tax rate of 40%.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements and Risk Factors— This Quarterly Report, including information incorporated by reference, contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.

All statements other than statements of historical fact, including statements regarding future results of operations or financial position, expected sources of incremental margin, strategy, financing needs, future capital expenditures and the outcome or effect of ongoing litigation, are forward-looking. This Quarterly Report uses words such as "anticipate," "believe," "expect," "estimate," "forecast," "goal," "intend," "objective," "plan," "project," "seek," "strategy," "target," "will" and similar expressions to identify forward-looking statements. These forward-looking statements are based on the beliefs and assumptions of management at the time that these statements were made and are inherently uncertain. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. These risks and uncertainties include, but are not limited to, general economic conditions on an international, national, state and local level; weather conditions in SJI’s marketing areas; changes in commodity costs; changes in the availability of natural gas; “non-routine” or “extraordinary” disruptions in SJI’s distribution system; regulatory, legislative and court decisions; competition; the availability and cost of capital; costs and effects of legal proceedings and environmental liabilities; the failure of customers, suppliers or business partners to fulfill their contractual obligations; and changes in business strategies.

These risks and uncertainties, as well as other risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, are described in greater detail under the heading “Item 1A. Risk factors” in this Quarterly Report and in SJI’s Annual Report on Form 10-K for the year ended December 31, 2015 and in any other SEC filings incorporated by reference into this Quarterly Report. No assurance can be given that any goal or plan set forth in any forward-looking statement can or will be achieved, and readers are cautioned not to place undue reliance on such statements, which speak only as of the date they are made. SJI undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Critical Accounting Policies — Estimates and Assumptions— Management must make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and related disclosures. Actual results could differ from those estimates. Five types of transactions presented in our condensed consolidated financial statements require a significant amount of judgment and estimation. These relate to regulatory accounting, derivatives, environmental remediation costs, pension and other postretirement employee benefit costs, and revenue recognition. A discussion of these estimates and assumptions may be found in SJI's Annual Report on Form 10-K for the year ended December 31, 2015.

New Accounting Pronouncements— See detailed discussions concerning New Accounting Pronouncements and their impact on SJI in Note 1 to the condensed consolidated financial statements.

Regulatory Actions— Other than the changes discussed in Note 7 to the condensed consolidated financial statements, there have been no significant regulatory actions since December 31, 2015. See detailed discussion concerning Regulatory Actions in Note 10 to the Consolidated Financial Statements in Item 8 of SJI’s Annual Report on Form 10-K for the year ended December 31, 2015.

Environmental Remediation—There have been no significant changes to the status of the Company’s environmental remediation efforts since December 31, 2015. See detailed discussion concerning Environmental Remediation Costs in Note 15 to the Consolidated Financial Statements in Item 8 of SJI’s Annual Report on Form 10-K for the year ended December 31, 2015.

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RESULTS OF OPERATIONS:

SJI operates in several different reportable operating segments. These segments are as follows:

• Gas utility operations (SJG) consist primarily of natural gas distribution to residential, commercial and industrial customers.

• Wholesale energy operations include the activities of South Jersey Resources Group, LLC (SJRG) and South Jersey Exploration, LLC (SJEX).

• South Jersey Energy Company (SJE) is involved in both retail gas and retail electric activities.

◦ Retail gas and other operations include natural gas acquisition and transportation service business lines.

◦ Retail electric operations consist of electricity acquisition and transportation to commercial, industrial and residential customers.

• On-site energy production consists of Marina Energy, LLC (Marina's) thermal energy facility and other energy-related projects. Also included in this segment are the activities of ACB Energy Partners, LLC (ACB), AC Landfill Energy, LLC (ACLE), BC Landfill Energy, LLC (BCLE), SC Landfill Energy, LLC (SCLE), SX Landfill Energy, LLC (SXLE), MCS Energy Partners, LLC (MCS), NBS Energy Partners, LLC (NBS) and SBS Energy Partners, LLC (SBS). These entities became wholly-owned subsidiaries of Marina on December 31, 2015 (see Note 3 to the condensed consolidated financial statements).

• Appliance service operations includes South Jersey Energy Service Plus, LLC (SJESP’s) servicing of appliances under warranty via a subcontractor arrangement as well as on a time and materials basis. 

• SJI Midstream, LLC (Midstream) was formed in 2014 to invest in infrastructure and other midstream projects, including a current project to build a 100-mile natural gas pipeline in Pennsylvania and New Jersey. The activities of Midstream are a part of the Corporate and Services segment.

SJI groups its nonutility operations into two categories: Energy Group and Energy Services. Energy Group includes wholesale energy, retail gas and other, and retail electric operations. Energy Services includes on-site energy production and appliance service operations.

SJI's net income for the three months ended March 31, 2016 increased $14.5 million to $68.1 million compared with the same period in 2015, primarily as a result of the following:

• The net income contribution from the wholesale energy operations at SJRG for the three months ended March 31, 2016 increased $23.4 million to $23.5 million due primarily to an approximately $16.7 million increase resulting from the change in unrealized gains and losses on derivatives used by the wholesale energy operations to mitigate natural gas commodity price risk as discussed under "Operating Revenues - Energy Group" below, along with an approximately $6.8 million increase related to additional capacity, as discussed under "Gross Margin - Energy Group" below.

• The net income contribution from on-site energy production at Marina for the three months ended March 31, 2016 decreased $7.6 million to $0.1 million due primarily to a projected decrease in the investment tax credits available on renewable energy facilities as compared to the same period in 2015. This reduction is consistent with the previously announced strategy of substantially reducing investment tax credits from solar development in 2016.

A significant portion of the volatility in operating results is due to the impact of the accounting methods associated with SJI’s derivative activities. The Company uses derivatives to limit its exposure to market risk on transactions to buy, sell, transport and store natural gas and to buy and sell retail electricity. The Company also uses derivatives to limit its exposure to increasing interest rates on variable-rate debt.

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The types of transactions that cause the most significant volatility in operating results are as follows:

• The wholesale energy operations at SJRG purchases and holds natural gas in storage and maintains capacity on interstate pipelines to earn profit margins in the future. The wholesale energy operations utilize derivatives to mitigate commodity price risk in order to substantially lock-in the profit margin that will ultimately be realized. However, both gas stored in inventory and pipeline capacity are not considered derivatives and are not subject to fair value accounting. Conversely, the derivatives used to reduce the risk associated with a change in the value of the inventory and pipeline capacity are accounted for at fair value, with changes in fair value recorded in operating results in the period of change. As a result, earnings are subject to volatility as the market price of derivatives change, even when the underlying hedged value of the inventory and pipeline capacity are unchanged. Additionally, volatility in earnings is created when realized gains and losses on derivatives used to mitigate commodity price risk on expected future purchases of gas injected into storage are recognized in earnings when the derivatives settle, but the cost of the related gas in storage is not recognized in earnings until the period of withdrawal. This volatility can be significant from period to period. Over time, gains or losses on the sale of gas in storage, as well as use of capacity, will be offset by losses or gains on the derivatives, resulting in the realization of the profit margin expected when the transactions were initiated.

• The retail electric operations at SJE use forward contracts to mitigate commodity price risk on fixed price electric contracts with customers. In accordance with GAAP, the forward contracts are recorded at fair value, with changes in fair value recorded in earnings in the period of change. Several related customer contracts are not considered derivatives and, therefore, are not recorded in earnings until the electricity is delivered. As a result, earnings are subject to volatility as the market price of the forward contracts change, even when the underlying hedged value of the customer contract is unchanged. Over time, gains or losses on the sale of the fixed price electric under contract will be offset by losses or gains on the forward contracts, resulting in the realization of the profit margin expected when the transactions were initiated.

As a result, management also uses the non-generally accepted accounting principles (“non-GAAP”) financial measures of Economic Earnings and Economic Earnings per share when evaluating the results of operations for its nonutility operations. These non-GAAP financial measures should not be considered as an alternative to GAAP measures, such as net income, operating income, earnings per share from continuing operations or any other GAAP measure of liquidity or financial performance.

We define Economic Earnings as: Income from continuing operations, (a) less the change in unrealized gains and plus the change in unrealized losses, as applicable and in each case after tax, on all derivative transactions; (b) less realized gains and plus realized losses, as applicable and in each case after tax, on all commodity derivative transactions attributed to expected purchases of gas in storage to match the recognition of these gains and losses with the recognition of the related cost of the gas in storage in the period of withdrawal; and (c) less the impact of transactions or contractual arrangements where the true economic impact will be realized in a future period. With respect to the third part of the definition of Economic Earnings:

• For the three months ended March 31, 2016 and 2015, Economic Earnings includes additional depreciation expense on a solar generating facility. During 2012, an impairment charge was recorded within Income from Continuing Operations on a solar generating facility which reduced its depreciable basis and recurring depreciation expense. This impairment charge was excluded from Economic Earnings and, therefore, the related reduction in depreciation expense is being added back.

• For the three months ended March 31, 2015, Economic Earnings excludes a $0.7 million loss (net of tax) from affiliated companies. This adjustment is the result of a reserve for uncollectible accounts recorded by an Energenic subsidiary that owned and operated a central energy center and energy distribution system for a hotel, casino and entertainment complex in Atlantic City, New Jersey (see Note 5 to the condensed consolidated financial statements). This charge was excluded from Economic Earnings as the total economic impact of the proceedings had not been realized as of March 31, 2015.

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Economic Earnings is a significant performance metric used by our management to indicate the amount and timing of income from continuing operations that we expect to earn after taking into account the impact of derivative instruments on the related transactions and transactions or contractual arrangements where the true economic impact will be realized in a future period. Specifically, we believe that this financial measure indicates to investors the profitability of the entire derivative-related transaction and not just the portion that is subject to mark-to-market valuation under GAAP. Considering only the change in market value on the derivative side of the transaction can produce a false sense as to the ultimate profitability of the total transaction as no change in value is reflected for the non-derivative portion of the transaction.

Economic Earnings for the three months ended March 31, 2016 decreased $1.9 million to $57.0 million compared with the same period in 2015 primarily as a result of the following:

• The income contribution from on-site energy production at Marina for the three months ended March 31, 2016 decreased $8.2 million to $0.3 million due primarily to a projected decrease in the investment tax credits available on renewable energy facilities as compared to the same period in 2015. This reduction is consistent with the previously announced strategy of substantially reducing investment tax credits from solar development in 2016.

• The income contribution from the wholesale energy operations at SJRG for the three months ended March 31, 2016 increased $6.8 million to $11.8 million due primarily to additional capacity, as discussed under "Gross Margin - Energy Group" below.

The following table presents a reconciliation of our income from continuing operations and earnings per share from continuing operations to Economic Earnings and Economic Earnings per share for the three months ended March 31 (in thousands except per share data):

	Three Months Ended March 31,
	2016			2015
Income from Continuing Operations	$	68,187		$	53,853
Minus/Plus:
Unrealized Mark-to-Market (Gains) Losses on Derivatives	(11,167		)	4,310
Realized Losses on Inventory Injection Hedges	2			30
Net Loss from Affiliated Companies (A)	—			742
Other (B)	(25		)	(25		)
Economic Earnings	$	56,997		$	58,910
Earnings per Share from Continuing Operations (C)	$	0.95		$	0.79
Minus/Plus:
Unrealized Mark-to-Market (Gains) Losses on Derivatives	(0.15		)	0.06
Net Loss from Affiliated Companies (A)	—			0.01
Economic Earnings per Share	$	0.80		$	0.86

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The effect of derivative instruments not designated as hedging instruments under GAAP in the condensed consolidated statements of income (see Note 12 to the condensed consolidated financial statements) is as follows (gains (losses) in thousands):

	Three Months Ended March 31,
	2016			2015
Gains (losses) on energy related commodity contracts	$	18,655		$	(6,707	)
Losses on interest rate contracts	(427		)	(298		)
Total before income taxes	18,228			(7,005		)
Income taxes (D)	(7,291		)	2,802
Total after income taxes	10,937			(4,203		)
Unrealized mark-to-market gains (losses) on derivatives held by affiliated companies, net of tax (D)	230			(107		)
Total unrealized mark-to-market gains (losses) on derivatives	11,167			(4,310		)
Realized losses on inventory injection hedges, net of tax (D)	(2		)	(30		)
Net Loss from Affiliated Companies (A)	—			(742		)
Other (B)	25			25
Total reconciling items between income (losses) from continuing operations and economic earnings	$	11,190		$	(5,057	)

(A) Resulting from a reserve for uncollectible accounts recorded by an Energenic subsidiary that owned and operated a central energy center and energy distribution system for a hotel, casino and entertainment complex in Atlantic City, New Jersey (see Note 5 to the condensed consolidated financial statements). This charge was excluded from Economic Earnings as the total economic impact of the proceedings had not been realized as of March 31, 2015.

(B) Represents additional depreciation expense within Economic Earnings on a solar generating facility. During 2012, an impairment charge was recorded within Income from Continuing Operations on a solar generating facility which reduced its depreciable basis and recurring depreciation expense. This impairment charge was excluded from Economic Earnings and, therefore, the related reduction in depreciation expense is being added back.

(C) All per share amounts were adjusted for the 2-for-1 stock split, effected in the form of a stock dividend, effective on May 8, 2015. See Note 1 to the condensed consolidated financial statements.

(D) Determined using a combined average statutory tax rate of 40%.

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The following tables summarize the composition of selected gas utility operations data for the three months ended March 31 (in thousands, except for degree day data):

	Three Months Ended March 31,
	2016	2015
Utility Throughput – decatherms (dt):
Firm Sales -
Residential	11,138	14,754
Commercial	2,183	3,678
Industrial	152	228
Cogeneration & Electric Generation	194	94
Firm Transportation -
Residential	1,008	1,527
Commercial	2,823	3,405
Industrial	3,053	2,948
Cogeneration & Electric Generation	1,479	1,368
Total Firm Throughput	22,030	28,002
Interruptible Sales	2	3
Interruptible Transportation	375	333
Off-System Sales	5,050	4,464
Capacity Release	16,151	15,045
Total Throughput - Utility	43,608	47,847

	Three Months Ended March 31,
	2016		2015
Utility Operating Revenues:
Firm Sales -
Residential	$	117,782	$	170,209
Commercial	22,145		37,409
Industrial	1,378		2,687
Cogeneration & Electric Generation	746		805
Firm Transportation -
Residential	6,493		8,477
Commercial	12,478		13,761
Industrial	5,330		6,331
Cogeneration & Electric Generation	1,509		1,908
Total Firm Revenues	167,861		241,587

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	Three Months Ended March 31,
	2016			2015
Interruptible Sales	18			56
Interruptible Transportation	332			410
Off-System Sales	13,488			23,988
Capacity Release	5,815			1,308
Other	252			309
	187,766			267,658
Less: Intercompany Sales	(4,097		)	(1,128		)
Total Utility Operating Revenues	183,669			266,530
Less:
Cost of Sales - Utility (Excluding depreciation)	65,206			144,974
Conservation Recoveries*	5,101			12,263
RAC Recoveries*	2,298			2,281
EET Recoveries*	799			1,049
Revenue Taxes	361			579
Utility Margin**	$	109,904		$	105,384
Margin:
Residential	$	71,278		$	90,684
Commercial and Industrial	25,229			32,714
Cogeneration and Electric Generation	1,313			1,193
Interruptible	21			55
Off-System Sales & Capacity Release	1,681			1,571
Other Revenues	251			308
Margin Before Weather Normalization & Decoupling	99,773			126,525
CIP Mechanism	9,263			(21,581		)
EET Mechanism	868			440
Utility Margin**	$	109,904		$	105,384
Degree Days:	2,216			2,925

*Represents expenses for which there is a corresponding credit in operating revenues.  Therefore, such recoveries have no impact on SJG's financial results.

**Utility Margin is further defined under the caption "Margin - Gas Utility Operations" below.

Throughput - Gas Utility Operations - Total gas throughput decreased by 4.2 MMdts during the three months ended March 31, 2016 compared to the same period in 2015. The primary reason for the decrease was warm weather that was 24.2% warmer during the first quarter of 2016, which lowered firm throughput by 6.0 MMths, or 21.3%, compared to the same period in 2015. The negative impact of weather on firm throughput was partially offset by the addition of 6,597 customers, a 1.8% increase compared with the same period in 2015.

Partially offsetting the decrease in firm throughput were increases in both Off-System sales (OSS) and capacity release, which increased 0.6 MMdts and 1.1 MMdts, respectively. Warmer than normal weather created less demand in SJG’s service territory and more supply available for OSS and capacity release activity.

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Conservation Incentive Program (CIP) - Gas Utility Operations - The effects of the CIP on net income of the gas utility operations for the three months ended March 31, 2016 and 2015 and the associated weather comparisons are as follows ($’s in millions):

	Three Months Ended March 31,
	2016		2015
Net Income Impact:
CIP – Weather Related	$	3.3	$	(8.6	)
CIP – Usage Related	2.2		(4.2		)
Total Net Income Impact	$	5.5	$	(12.8	)
Weather Compared to 20-Year Average	9.9% Warmer		20.7% Colder
Weather Compared to Prior Year	24.2% Warmer		5.0% Colder

Operating Revenues  - Gas Utility Operations - Revenues decreased $82.9 million, or 31.1%, for the three months ended March 31, 2016, compared with the same period in 2015, after eliminating intercompany transactions.

Total firm revenue was $73.7 million lower during the three months ended March 31, 2016, compared to the same period last year, due to several factors. Firm throughput was significantly lower during the first quarter of 2016, compared to the first quarter of last year, as discussed above under “Throughput - Gas Utility Operations.” The impact of this reduction in throughput lowered SJG’s recovery of natural gas costs through its Basic Gas Supply Service (“BGSS”) mechanism by $39.5 million. In addition, SJG reduced its BGSS rate effective October 1, 2015 by 18.6%, further reducing revenue by $17.3 million during the first quarter of 2016. Finally, SJG provided a $20.0 million BGSS bill credit to its residential and small commercial customers in January 2016, of which $18.7 million reduced revenue for the first quarter of 2016, after consideration for sales tax. While changes in gas costs and BGSS recoveries/refunds fluctuate from period to period, SJG does not profit from the sale of the commodity. Therefore, fluctuations in Utility Operating Revenue and Cost of Sales, such as those discussed above, did not have an impact on SJG’s profitability.

Despite the increase in OSS discussed above under “Throughput - Gas Utility Operations", a 50% reduction in unit prices resulted in a net decrease of $10.5 million in OSS revenues during the three months ended March 31, 2016 compared with the same period in 2015. Capacity release revenue increased $4.5 million as a result of specific releases to Transco Zone 5 at a relatively high value, which did not occur during the first quarter of 2015. However, the impact of changes in OSS and capacity release activity do not have a material impact on the earnings of SJG, as SJG is required to return 85% of the profits of such activity to its ratepayers. Earnings from OSS and capacity release can be seen in the “Margin” table above.

Operating Revenues - Energy Group -  Combined revenues for Energy Group, net of intercompany transactions, increased $30.4 million, or 29.9%, to $132.4 million for the three months ended March 31, 2016, compared with the same period in 2015.

Revenues from retail gas operations at SJE, net of intercompany transactions, decreased $8.3 million, or 21.7%, for the three months ended March 31, 2016, compared with the same period in 2015. Excluding the change in unrealized gains and losses recorded on forward financial contracts due to price volatility of $1.5 million, revenues decreased $6.8 million, or 18.4%, for the three months ended March 31, 2016, compared with the same period in 2015.

A summary of SJE's retail gas revenue is as follows (in millions):

	Three Months Ended March 31,
	2016		2015			Change
SJE Retail Gas Revenue	$	29.6	$	37.9		$	(8.3	)
Add: Unrealized Losses (Subtract: Unrealized Gains)	0.2		(1.3		)	1.5
SJE Retail Gas Revenue, Excluding Unrealized Losses (Gains)	$	29.8	$	36.6		$	(6.8	)

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The decrease in revenues for the three months ended March 31, 2016, compared with the same period in 2015 was mainly due to a 57.1% decrease in the average monthly New York Mercantile Exchange (NYMEX) settle price.

Revenues from retail electric operations at SJE, net of intercompany transactions, increased $9.5 million, or 32.9%, for the three months ended March 31, 2016, compared with the same period in 2015. Excluding the impact of the net change in unrealized gains and losses recorded on forward financial contracts due to price volatility of $0.1 million, revenues increased $9.6 million, or 33.5%, for the three months ended March 31, 2016, compared with the same period in 2015.

A summary of revenues from retail electric operations at SJE is as follows (in millions):

	Three Months Ended March 31,
	2016		2015		Change
SJE Retail Electric Revenue	$	38.4	$	28.9	$	9.5
Add: Unrealized Losses (Subtract: Unrealized Gains)	0.2		0.1		0.1
SJE Retail Electric Revenue, Excluding Unrealized Losses (Gains)	$	38.6	$	29.0	$	9.6

The increase in revenues from retail electric operations at SJE, as defined above, for the three months ended March 31, 2016, compared with the same period in 2015, was mainly due to a 48.6% increase in sales volumes, partially offset by a 22.7% decrease in the average monthly sales price, which was driven by a lower average Locational Marginal Price (LMP) per megawatt hour. SJE uses forward financial contracts to mitigate commodity price risk on fixed price electric contracts. In accordance with GAAP, the forward financial contracts are recorded at fair value, with changes in fair value recorded in earnings in the period of change. The related customer contracts are not considered derivatives and, therefore, are not recorded in earnings until the electricity is delivered. As a result, earnings are subject to volatility as the market price of the forward financial contracts change, even when the underlying hedged value of the customer contract is unchanged. Over time, gains or losses on the sale of the fixed price electric under contract will be offset by losses or gains on the forward financial contracts, resulting in the realization of the profit margin expected when the transactions were initiated. The retail electric operations at SJE serve both fixed and market-priced customers.

Revenues from wholesale energy operations at SJRG, net of intercompany transactions, increased $29.9 millionfor the three months ended March 31, 2016, compared with the same period in 2015. Excluding the impact of the net change in unrealized gains and losses recorded on forward financial contracts due to price volatility of $(27.0) million and adjusting for the change in realized gains and losses on all hedges attributed to inventory injection transactions of $(0.1) million to align them with the related cost of inventory in the period of withdrawal, revenues from the wholesale energy operations at SJRG increased $2.8 millionfor the three months ended March 31, 2016, compared with the same period in 2015.

A summary of revenues from wholesale energy operations at SJRG is as follows (in millions):

	Three Months Ended March 31,
	2016			2015		Change
SJRG Revenue	$	65.1		$	35.2	$	29.9
Add: Unrealized Losses (Subtract: Unrealized Gains)	(19.1		)	7.9		(27.0		)
Add:  Realized Losses (Subtract: Realized Gains) on Inventory Injection Hedges	—			0.1		(0.1		)
SJRG Revenue, Excluding Unrealized Losses (Gains) and  Realized Losses (Gains) on Inventory Injection Hedges	$	46.0		$	43.2	$	2.8

The increase in revenues from the wholesale energy operations at SJRG, as defined above, for the three months ended March 31, 2016, compared with the same period in 2015, was due mainly to additional capacity and revenues earned on gas supply contracts with two electric generation facilities, partially offset by a 57.1% decrease in the average monthly NYMEX settle price. As discussed in Note 1 to the Consolidated Financial Statements in Item 8 of SJI’s Annual Report on Form 10-K for the year ended December 31, 2015, revenues and expenses related to the energy trading activities of the wholesale energy operations at SJRG are presented on a net basis in Operating Revenues – Nonutility on the condensed consolidated income statement.

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Operating Revenues - Energy Services-  Combined revenues for Energy Services, net of intercompany transactions, increased $2.5 million, or 17.5%, to $17.0 million for the three months ended March 31, 2016, compared with the same period in 2015.

Revenues from on-site energy production at Marina, net of intercompany transactions, increased $3.0 million, or 24.7%, to $15.2 million for the three months ended March 31, 2016, compared with the same period in 2015 primarily due to higher prices on solar renewable energy credits (SRECs) compared to the previous year, along with the revenues earned at several entities that became wholly owned by Marina as of December 31, 2015 (see Note 3 to the condensed consolidated financial statements).

Revenues from appliance service operations at SJESP, net of intercompany transactions, did not change significantly for the three months ended March 31, 2016, compared with the same period in 2015.

Margin - Gas Utility Operations - Total margin increased $4.5 million, or 4.3%, for the three months ended March 31, 2016, compared with the same period in 2015. The rolling into base rates of Storm Hardening and Reliability Program (SHARP) investments of approximately $36.6 million on October 1, 2015 contributed approximately $2.0 million of additional margin in the first quarter of 2016 compared with 2015. In addition, SJG added 6,597 customers over the 12-month period ended March 31, 2016, contributing approximately $2.1 million in additional margin during the three months ended March 31, 2016, compared with the same period of 2015.

The CIP tracking mechanism adjusts earnings when actual usage per customer experienced during the period varies from an established baseline usage per customer. As reflected in the margin and CIP tables above, the CIP mechanism protected $9.3 million, or $5.5 million after taxes, of margin for the three months ended March 31, 2016 that would have been lost due to weather that was warmer than average and lower customer usage. The CIP mechanism reduced margin by $21.6 million, or $12.8 million after taxes, for the three months ended March 31, 2015, primarily due to weather that was much colder than normal.

Gross Margin - Nonutility -  Gross margin for the nonutility businesses is defined as revenue less all costs that are directly related to the production, sale and delivery of the Company’s products and services. These costs primarily include natural gas and electric commodity costs as well as certain payroll and related benefits. On the statements of condensed consolidated income, revenue is reflected in Operating Revenues - Nonutility and the costs are reflected in Cost of Sales - Nonutility. As discussed in Note 16 to the Consolidated Financial Statements in Item 8 of SJI’s Annual Report on Form 10-K for the year ended December 31, 2015, revenues and expenses related to the energy trading activities of the wholesale energy operations at SJRG are presented on a net basis in Operating Revenues - Nonutility on the condensed consolidated income statement.

Gross Margin - Energy Group - For the three months ended March 31, 2016, combined gross margins for Energy Group increased $35.7 million to $44.5 million compared with the same period in 2015. These changes were primarily due to the following:

• Gross margin from SJE’s retail gas and other operations decreased $3.0 million to $1.3 million for the three months ended March 31, 2016, compared with the same period in 2015. Excluding the change in unrealized gains and losses recorded on forward financial contracts due to price volatility of $1.5 million, gross margin decreased $1.5 million for the three months ended March 31, 2016, compared with the same period in 2015. Excluding the impact of the unrealized gains/losses discussed above, gross margin as a percentage of Operating Revenues decreased 3.2 percentage points for the three months ended March 31, 2016, compared with the same period in 2015. These three-month comparative period decreases are mainly due to warmer weather conditions in the first quarter of 2016 compared to the same period in 2015.

• Gross margin from SJE’s retail electric operations did not change significantly for the three months ended March 31, 2016, compared with the same period in 2015.

• Gross margin from the wholesale energy operations at SJRG increased $38.5 million to $42.0 million for the three months ended March 31, 2016, compared with the same period in 2015. Excluding the impact of the net change in unrealized gains and losses recorded on forward financial contracts due to price volatility of $(27.0) million and adjusting for the change in realized gains and losses on all hedges attributed to inventory injection transactions of $(0.1) million to align them with the related cost of inventory in the period of withdrawal as discussed above, gross margin for the wholesale energy operations at SJRG increased $11.4 million for the three months ended March 31, 2016, compared with the same period in 2015. The increase in gross margin for the three months ended March 31, 2016, compared with the same period in 2015, was due mainly to additional capacity.

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The wholesale energy operations at SJRG expect to continue to add incremental margin from marketing and related opportunities in the Marcellus region, capitalizing on its established presence in the area. Future margins could fluctuate significantly due to the volatile nature of wholesale gas prices. As of March 31, 2016, the wholesale energy operations had 9.2 Bcf of storage and 365,128 dts/day of transportation under contract.

Gross Margin - Energy Services - For the three months ended March 31, 2016, combined gross margins for Energy Services increased $6.2 million to $17.0 million compared with the same period in 2015. These changes were primarily due to the following:

• Gross margin from on-site energy production at Marina increased $6.4 million to $16.1 million for the three months ended March 31, 2016, compared with the same period in 2015. Gross margin as a percentage of Operating Revenues increased 26.1 percentage points for the three months ended March 31, 2016, compared with the same period in 2015. These increases are mainly due to several new higher margin renewable energy projects that began operations over the past twelve months, along with higher prices on SRECs compared to the previous year. Also contributing to the increase were margins earned at several entities that became wholly owned by Marina as of December 31, 2015 (see Note 3 to the condensed consolidated financial statements).

• Gross margin from appliance service operations at SJESP did not change significantly for the three months ended March 31, 2016, compared with the same period in 2015.

Operating Expenses - A summary of net changes in operations expense for the three months ended March 31, follows (in thousands):

	Three Months Ended March 31, 2016 vs. 2015
Gas Utility Operations	$	(7,289	)
Nonutility:
Energy Group:
Wholesale Energy Operations	391
Retail Gas and Other Operations	197
Retail Electric Operations	25
Subtotal Energy Group	613
Energy Services:
On-Site Energy Production	3,834
Appliance Service Operations	(210		)
Subtotal Energy Services	3,624
Total Nonutility	4,237
Intercompany Eliminations and Other	(12		)
Total Operations Expense	$	(3,064	)

Operations - Gas utility operations expense decreased $7.3 millionfor the three months ended March 31, 2016, compared with the same period in 2015.  The decrease primarily resulted from the operation of SJG's New Jersey Clean Energy Program and Energy Efficiency Programs, which experienced a net decrease of $7.4 million. Such costs are recovered on a dollar-for-dollar basis; therefore, SJG experienced an offsetting decrease in revenue during the three months ended March 31, 2016, compared with the same period in the prior year. This was due to a reduction in the approved rates used to recover such costs, as well as lower recoveries resulting from warmer weather during the first quarter of 2016, as previously discussed.

Nonutility operations expense increased $4.2 millionfor the three months ended March 31, 2016, compared with the same period in 2015, primarily due to additional personnel, governance and compliance costs incurred to support continued growth.

Maintenance - The change in maintenance expense for the three months ended March 31, 2016, compared with the same period in 2015, was not significant.

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Depreciation - Depreciation increased $3.9 millionfor the three months ended March 31, 2016, compared with the same period in 2015, due primarily to the increased investment in property, plant and equipment by the gas utility operations of SJG and on-site energy production at Marina.

Energy and Other Taxes - The change in energy and other taxes for the three months ended March 31, 2016, compared with the same period in 2015, was not significant.

Other Income and Expense - The change in other income and expense for the three months ended March 31, 2016, compared with the same period in 2015, was not significant.

Interest Charges – Interest charges increased $0.6 millionfor the three months ended March 31, 2016, compared with the same period in 2015, primarily due to higher amounts of long-term debt outstanding at SJI and SJG, partially offset by higher capitalization of interest costs on construction at the gas utility operations of SJG during 2016. This was a result of accumulating capital investments under SJG's Accelerated Infrastructure Replacement Program (AIRP). AIRP investments are approved by the BPU to accrue interest on construction until such time they are rolled into base rates.

Income Taxes– Income tax expense increased $22.7 millionfor the three months ended March 31, 2016, compared with the same period in 2015, due primarily to higher income before income taxes along with a higher effective tax rate due to a projected decrease in the investment tax credits available on renewable energy facilities at Marina.

Equity in Earnings of Affiliated Companies– The decrease in equity in earnings of affiliated companies for the three months ended March 31, 2016, compared with the same period in 2015, was not significant.

Discontinued Operations — The results are primarily comprised of environmental remediation and product liability litigation associated with previously disposed of businesses.

LIQUIDITY AND CAPITAL RESOURCES:

Liquidity needs are driven by factors that include natural gas commodity prices; the impact of weather on customer bills; lags in fully collecting gas costs from customers under the BGSS charge and other regulatory clauses; working capital needs of our energy trading and marketing activities; the timing of construction and remediation expenditures and related permanent financings; the timing of equity contributions to unconsolidated affiliates; mandated tax payment dates; both discretionary and required repayments of long-term debt; and the amounts and timing of dividend payments.

Cash Flows from Operating Activities — Liquidity needs are first met with net cash provided by operating activities. Net cash provided by operating activities totaled $98.1 million and $34.9 million in the first three months of 2016 and 2015, respectively. Net cash provided by operating activities varies from year-to-year primarily due to the impact of weather on customer demand and related gas purchases, customer usage factors related to conservation efforts and the price of the natural gas commodity, inventory utilization, and gas cost recoveries.  Operating activities in the first three months of 2016 produced more net cash than the same period in 2015 primarily due to improvements in working capital as a result of lower payments for gas purchases driven by the warmer weather experienced during the 2015-2016 winter. Also, SJI did not make a pension contribution this year as compared with last year. In 2015, SJI made a $15.0 million pension contribution as a result of a decline in the discount rate and new mortality tables released at the end of 2014, both of which negatively impacted the funding status of the pension plans. The Company strives to keep its pension plans fully funded. When factors such as lesser than expected asset performance and/or declining discount rates negatively impact the funding status of the plans, the Company increases its contributions to supplant that funding shortfall.

Cash Flows from Investing Activities — SJI has a continuing need for cash resources and capital, primarily to invest in new and replacement facilities and equipment. Net cash outflows from investing activities, which are primarily construction projects, for the first three months of 2016 and 2015 amounted to $59.2 million and $60.5 million, respectively. We estimate the net cash outflows for investing activities for fiscal years 2016, 2017 and 2018 at SJI to be approximately $289.6 million, $398.3 million and $238.0 million, respectively. The high level of investing activities for 2016, 2017 and 2018 is due to a combination of the accelerated infrastructure investment programs and a major pipeline project to support an electric generation facility, both at SJG.  Also contributing to the high level of investing activities are SJI Midstream investments in 2016 through 2018 and limited solar projects at Marina in 2016 . The Company expects to use short-term borrowings under lines of credit from commercial banks and the commercial paper program to finance these investing activities as incurred. From time to time, the Company may refinance the short-term debt with long-term debt.

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In support of its risk management activities, the Company is required to maintain margin accounts with selected counterparties as collateral for its forward contracts, swap agreements, options contracts and futures contracts. These margin accounts are included in Restricted Investments or Margin Account Liability, depending upon the value of the related contracts (the change in the Margin Account Liability is reflected in cash flows from Operating Activities) on the condensed consolidated balance sheets. The required amount of restricted investments changes on a daily basis due to fluctuations in the market value of the related outstanding contracts and is difficult to predict. Margin posted by the Company decreased by $8.9 million in the first three months of 2016, compared with a decrease of $4.8 million in the same period of 2015.

During the first three months of 2016 and 2015, the Company made net investments in unconsolidated affiliates of $1.5 million and $1.7 million, respectively.

Cash Flows from Financing Activities — Short-term borrowings from the commercial paper program and lines of credit from commercial banks are used to supplement cash flows from operations, to support working capital needs and to finance capital expenditures as incurred. From time to time, short-term debt incurred to finance capital expenditures is refinanced with long-term debt.

Credit facilities and available liquidity as of March 31, 2016 were as follows (in thousands):

Company	Total Facility		Usage			Available Liquidity		Expiration Date
SJG:
Commercial Paper Program/Revolving Credit Facility	$	200,000	$	66,900	(A)	$	133,100	May 2018
Uncommitted Bank Lines	10,000		—			10,000		August 2016
Total SJG	210,000		66,900			143,100
SJI:
Revolving Credit Facility	400,000		278,000		(B)	122,000		February 2018
Total SJI	400,000		278,000			122,000
Total	$	610,000	$	344,900		$	265,100

(A) Includes letters of credit outstanding in the amount of $2.1 million.

(B) Includes letters of credit outstanding in the amount of $3.3 million.

The SJG facilities are restricted as to use and availability specifically to SJG; however, if necessary the SJI facilities can also be used to support SJG’s liquidity needs. All committed facilities contain one financial covenant limiting the ratio of indebtedness to total capitalization (as defined in the respective credit agreements), measured on a quarterly basis. SJI and SJG were in compliance with these covenants as of March 31, 2016. Borrowings under these credit facilities are at market rates. The weighted average interest rate on these borrowings, which changes daily, was 1.34% and 0.88% at March 31, 2016 and 2015, respectively.  Average borrowings outstanding under these credit facilities, not including letters of credit, during the three months ended March 31, 2016 and 2015 were $394.6 million and $274.1 million, respectively. The maximum amounts outstanding under these credit facilities, not including letters of credit, during the three months ended March 31, 2016 and 2015 were $467.7 million and $329.4 million, respectively. Based upon the existing credit facilities and a regular dialogue with our banks, we believe there will continue to be sufficient credit available to meet our business’ future liquidity needs.

SJG has a commercial paper program under which SJG may issue short-term, unsecured promissory notes to qualified investors up to a maximum aggregate amount outstanding at any time of $200.0 million.  The notes have fixed maturities which vary by note, but may not exceed 270 days from the date of issue. Proceeds from the notes are used for general corporate purposes.  SJG uses the commercial paper program in tandem with its $200.0 million revolving credit facility and does not expect the principal amount of borrowings outstanding under the commercial paper program and the credit facility at any time to exceed an aggregate of $200.0 million.

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SJI supplements its operating cash flow, commercial paper program and credit lines with both debt and equity capital. Over the years, SJG has used long-term debt, primarily in the form of First Mortgage Bonds and Medium Term Notes (MTN's), secured by the same pool of utility assets, to finance its long-term borrowing needs. These needs are primarily capital expenditures for property, plant and equipment. 

In January 2016, the Company paid $12.7 million to retire outstanding debt of ACB.

In January 2016, SJG issued $61.0 million of long-term debt under a $200.0 million aggregate syndicated bank term facility. The facility is now fully drawn. The total outstanding amount under this facility as of March 31, 2016 is $200.0 million.

SJI raises equity capital through its Dividend Reinvestment Plan (DRP). Shares of common stock offered by the DRP have been issued directly by SJI from its authorized but unissued shares of common stock. SJI raised $5.6 million and $1.9 million of equity capital through the DRP during the three months ended March 31, 2016 and 2015, respectively.

SJI’s capital structure was as follows:

	As of March 31, 2016		As of December 31, 2015		(A)
Equity	43.6	%	41.6	%
Long-Term Debt	42.9	%	41.1	%
Short-Term Debt	13.5	%	17.3	%
Total	100.0	%	100.0	%

(A) Certain reclassifications have been made to the prior period condensed consolidated balance sheets to conform to the current period presentation, causing the amounts as of December 31, 2015 to be adjusted. See Note 1 to the condensed consolidated financial statements.

SJI has paid dividends on its common stock for 64 consecutive years and has increased that dividend each year for the last sixteen years.  The Company currently looks to grow that dividend consistent with earnings growth while targeting a payout ratio of between 50% and 60% of Economic Earnings.  In setting the dividend rate, the Board of Directors of SJI considers future earnings expectations, payout ratio, and dividend yield relative to those at peer companies, as well as returns available on other income-oriented investments.  However, there can be no assurance that the Company will be able to continue to increase the dividend, meet the targeted payout ratio or pay a dividend at all in the future.

COMMITMENTS AND CONTINGENCIES:

Environmental Remediation- Costs for remediation projects, net of recoveries from ratepayers, for the first three months of 2016 and 2015 amounted to net cash outflows of $7.3 million and $1.2 million, respectively. Total net cash outflows for remediation projects are expected to be $34.7 million, $34.0 million and $4.7 million for 2016, 2017 and 2018, respectively.  As discussed in Notes 10 and 15 to the Consolidated Financial Statements in Item 8 of SJI’s 10-K for the year ended December 31, 2015, certain environmental costs are subject to recovery from and ratepayers.

Standby Letters of Credit - As of March 31, 2016, SJI provided $3.3 million of standby letters of credit through its revolving credit facility to enable SJE to market retail electricity and for various construction and operating activities. SJG provided a $2.1 million letter of credit under its revolving credit facility to support the remediation of environmental conditions at certain locations in SJG's service territory. The Company also provided $87.5 million of additional letters of credit under separate facilities outside of the revolving credit facilities to support variable-rate demand bonds issued through the New Jersey Economic Development Authority (NJEDA) to finance the expansion of SJG’s natural gas distribution system and to finance Marina's initial thermal plant project.

Contractual Obligations- There were no significant changes to the Company’s contractual obligations described in Note 15 to the Consolidated Financial Statements in Item 8 of SJI’s Annual Report on Form 10-K for the year ended December 31, 2015, except for (a) commodity supply purchase obligations, which decreased approximately $108.1 million due to payments made during the first three months of 2015 on commitments at SJE and SJRG; (b) construction obligations, which increased $53.7 million in total due mainly to an increase in vendor agreements regarding contractor payments at SJG; and (c) long-term debt, which increased approximately $48.3 million due to the issuance of $61.0 million of long-term debt at SJG, partially offset by a $12.7 million retirement of debt at ACB (see Note 14 to the condensed consolidated financial statements).

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Off-Balance Sheet Arrangements– An off-balance sheet arrangement is any contractual arrangement involving an unconsolidated entity under which the Company has either made guarantees, or has certain other interests or obligations.

As part of the Transaction involving the Energenic projects (see Note 3 to the condensed consolidated financial statements), the Company is relieved of any guarantees from prior periods related to the projects in which it no longer has an ownership interest.

As of March 31, 2016, SJI had issued $6.2 million of parental guarantees on behalf of an unconsolidated subsidiary. These guarantees generally expire within the next two years and were issued to enable our subsidiary to market retail natural gas.

During 2011, subsidiaries of Energenic, in which Marina has a 50% equity interest, entered into 20-year contracts to build, own and operate a central energy center and energy distribution system for a new hotel, casino and entertainment complex in Atlantic City, New Jersey. The complex commenced operations in April 2012, and as a result, Energenic subsidiaries began providing full energy services to the complex. 

In June 2014 the parent company of the hotel, casino and entertainment complex filed petitions in U. S. Bankruptcy Court to facilitate a sale of substantially all of its assets. The complex ceased normal business operations in September 2014. Energenic subsidiaries continued to provide limited energy services to the complex during the shutdown period under a temporary agreement with the trustee. The hotel, casino and entertainment complex was sold in April 2015. As of December 31, 2015, the Energenic subsidiaries were providing limited services to the complex under a short-term agreement with the new owner. However, the Energenic subsidiaries had not been able to secure a permanent or long-term energy services agreement with the new owner.

In 2015 management of the Company and Energenic evaluated the carrying value of the investment in this project and a related note receivable. Based on the inability of the Energenic subsidiaries to secure a permanent or long-term energy services agreement, the Company recorded a $7.7 million (net of tax) non-cash charge to earnings during the second quarter of 2015 due to the reduction in the carrying value of the investment in this project recorded by Energenic. This charge was included in Equity in Loss of Affiliated Companies in 2015 on the condensed consolidated statements of income.

The central energy center and energy distribution system owned by the Energenic subsidiaries was financed in part by the issuance of bonds during 2011. These bonds were collateralized primarily by certain assets of the central energy center and revenue from the energy services agreement with the hotel, casino and entertainment complex. During 2015, due to the cessation of normal business operations of the complex and the inability of the Energenic subsidiaries to meet its obligations under the bonds, the trustee for the bondholders filed suit to foreclose on certain assets of the central energy center. In November 2015 during settlement discussions, the bondholders alleged, among other things, that they were entitled to recover from Energenic itself, any amounts owed under the bonds that were not covered by the collateral, including principal, interest and attorney’s fees. The bondholders’ assertion was based on inconsistent language in the bond documents. In January 2016, Energenic and certain subsidiaries reached a multi-party settlement with the bondholders. This agreement resolves all outstanding litigation and transfers ownership of the bondholders’ collateral to the owners of the entertainment complex. The Company’s share of this settlement was $7.5 million which was accrued by Energenic as of December 31, 2015 and paid in 2016. Management of Energenic is currently in active settlement discussions and believes that this amount is recoverable from its insurance carrier and external legal advisors.

As of March 31, 2016, the Company, through its investment in Energenic, had a remaining net asset of approximately $1.4 million included in Investment in Affiliates on the condensed consolidated balance sheets related to cogeneration assets for this project. In addition, the Company had approximately $13.7 million included in Notes Receivable - Affiliate on the condensed consolidated balance sheets, due from Energenic, which is secured by those cogeneration assets. This note is subject to a reimbursement agreement that secures reimbursement for the Company, from its joint venture partner, of a proportionate share of any amounts that are not repaid.

Management will continue to monitor the situation surrounding the complex and will evaluate the carrying value of the investment and the note receivable as future events occur.

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Pending Litigation— The Company is subject to claims arising in the ordinary course of business and other legal proceedings. The Company has been named in, among other actions, certain gas supply and capacity management contract disputes and certain product liability claims related to our former sand mining subsidiary. We accrue liabilities related to these claims when we can reasonably estimate the amount or range of amounts of probable settlement costs or other charges for these claims. The Company has accrued approximately $3.3 million and $3.2 million related to all claims in the aggregate as of March 31, 2016 and December 31, 2015, respectively. Management does not believe that it is reasonably possible that there will be a material change in the Company's estimated liability in the near term and does not currently anticipate the disposition of any known claims that would have a material effect on the Company's financial position, results of operations or cash flows.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Commodity Market Risks — Certain regulated and nonregulated SJI subsidiaries are involved in buying, selling, transporting and storing natural gas and buying and selling retail electricity for their own accounts as well as managing these activities for third parties. These subsidiaries are subject to market risk due to price fluctuations. To hedge against this risk, we enter into a variety of physical and financial transactions including forward contracts, swaps, futures and options agreements. To manage these transactions, SJI has a well-defined risk management policy approved by our Board of Directors that includes volumetric and monetary limits. Management reviews reports detailing activity daily. Generally, the derivative activities described above are entered into for risk management purposes.

As part of its gas purchasing strategy, SJG uses financial contracts to hedge against forward price risk. These contracts are recoverable through SJG’s BGSS, subject to BPU approval.

The retail gas operations of SJE transact commodities on a physical basis and typically does not enter into financial derivative positions directly. SJRG manages risk in the natural gas markets for SJE as well as for its own portfolio by entering into the types of transactions noted above. The retail electric operations of SJE use forward physical and financial contracts to mitigate commodity price risk on fixed price electric contracts. It is management's policy, to the extent practical, within predetermined risk management policy guidelines, to have limited unmatched positions on a deal or portfolio basis while conducting these activities. As a result of holding open positions to a minimal level, the economic impact of changes in value of a particular transaction is substantially offset by an opposite change in the related hedge transaction.

SJI has entered into certain contracts to buy, sell, and transport natural gas and to buy and sell retail electricity. SJI recorded a net pre-tax unrealized gain (loss) of $18.7 million and $(6.7) million in earnings during the three months ended March 31, 2016 and 2015, respectively, which are included with realized losses in Operating Revenues — Nonutility.  

The fair value and maturity of these energy-related contracts determined under the mark-to-market method as of March 31, 2016 is as follows (in thousands):

Assets
Source of Fair Value	Maturity  < 1 Year		Maturity  1 -3 Years		Maturity Beyond 3 Years		Total
Prices actively quoted	$	5,956	$	1,152	$	37	$	7,145
Prices provided by other external sources	12,536		3,404		46		15,986
Prices based on internal models or other valuation methods	39,324		14,365		484		54,173
Total	$	57,816	$	18,921	$	567	$	77,304
Liabilities
Source of Fair Value	Maturity  <1 Year		Maturity 1 -3 Years		Maturity Beyond 3Years		Total
Prices actively quoted	$	27,261	$	4,550	$	47	$	31,858
Prices provided by other external sources	3,161		567		—		3,728
Prices based on internal models or other valuation methods	35,971		4,635		326		40,932
Total	$	66,393	$	9,752	$	373	$	76,518

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• NYMEX (New York Mercantile Exchange) is the primary national commodities exchange on which natural gas is traded. Volumes of our NYMEX contracts included in the table above under "Prices actively quoted" are 31.3 million dekatherms (dts) with a weighted average settlement price of $2.85 per dt.

• Basis represents the differential to the NYMEX natural gas futures contract for delivering gas to a specific location. Volumes of our basis contracts, along with volumes of our discounted index related purchase and sales contracts, included in the table above under "Prices provided by other external sources" and "Prices based on internal models or other valuation methods" are 169.6 million dts with a weighted average settlement price of $(0.99) per dt.

• Fixed Price Gas Daily represents the price of a NYMEX natural gas futures contract adjusted for the difference in price for delivering the gas at another location. Volumes of our Fixed Price Gas Daily contracts included in the table above under "Prices provided by other external sources" are 18.6 million dts with a weighted average settlement price of $1.55 per dt.

• Volumes of electric included in the table above under "Prices based on internal models or other valuation methods" are 0.2 million mwh with a weighted average settlement price of $42.37 per mwh.

A reconciliation of SJI’s estimated net fair value of energy-related derivatives follows (in thousands):

Net Derivatives — Energy Related Liabilities, January 1, 2016	$	(13,074	)
Contracts Settled During Three Months Ended March 31, 2016, Net	5,927
Other Changes in Fair Value from Continuing and New Contracts, Net	7,933
Net Derivatives — Energy Related Assets, March 31, 2016	$	786

Interest Rate Risk— Our exposure to interest-rate risk relates to short-term and long-term variable-rate borrowings. Variable-rate debt outstanding, including short-term and long-term debt, at March 31, 2016 was $735.6 million and averaged $772.1 million during the first three months of 2016. A hypothetical 100 basis point (1%) increase in interest rates on our average variable-rate debt outstanding would result in a $4.6 million increase in our annual interest expense, net of tax. The 100 basis point increase was chosen for illustrative purposes, as it provides a simple basis for calculating the impact of interest rate changes under a variety of interest rate scenarios. Over the past five years, the change in basis points (b.p.) of our average monthly interest rates from the beginning to end of each year was as follows: 2015 - 14 b.p. increase; 2014 - 1 b.p. decrease; 2013 - 16 b.p. decrease; 2012 - 9 b.p. decrease; and 2011 - 33 b.p. increase.  At March 31, 2016, our average interest rate on variable-rate debt was 1.38%.

We typically issue long-term debt either at fixed rates or use interest rate derivatives to limit our exposure to changes in interest rates on variable rate, long-term debt. As of March 31, 2016, the interest costs on $735.6 million of our long-term debt was either at a fixed rate or hedged via an interest rate derivative.

As of March 31, 2016, SJI’s active interest rate swaps were as follows:

Notional Amount		Fixed Interest Rate	Start Date	Maturity	Type	Obligor
$	14,500,000	3.905%	3/17/2006	1/15/2026	Tax-exempt	Marina
$	500,000	3.905%	3/17/2006	1/15/2026	Tax-exempt	Marina
$	330,000	3.905%	3/17/2006	1/15/2026	Tax-exempt	Marina
$	12,500,000	3.530%	12/1/2006	2/1/2036	Tax-exempt	SJG
$	12,500,000	3.430%	12/1/2006	2/1/2036	Tax-exempt	SJG

Credit Risk - As of March 31, 2016, approximately $12.3 million, or 15.9%, of the current and noncurrent Derivatives – Energy Related Assets are transacted with one counterparty. This counterparty has contracts with a large number of diverse customers which minimizes the concentration of this risk. A portion of these contracts may be assigned to SJI in the event of default by the counterparty.

As of March 31, 2016, SJRG had $59.2 million of Accounts Receivable under sales contracts. Of that total, 77.6% were with regulated utilities or companies rated investment-grade or guaranteed by an investment-grade-rated parent or were with companies where we have a collateral arrangement or insurance coverage. The remainder of the Accounts Receivable were within approved credit limits.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of its chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) under the Exchange Act) as of March 31, 2016. Based on that evaluation, the Company’s chief executive officer and chief financial officer concluded that the disclosure controls and procedures employed at the Company are effective.

Changes in Internal Control Over Financial Reporting

There has not been any change in the Company’s internal control over financial reporting as defined in Rules 13a-15(f) under the Exchange Act, during the fiscal quarter ended March 31, 2016 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

Item l. Legal Proceedings

Information required by this Item is incorporated by reference to Part I, Item 2, Pending Litigation, beginning on page 47.

Item 1A. Risk Factors

Other than as set forth below, there have been no material changes in our risk factors from those disclosed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

SJI’s stated long-term goals are based on various assumptions and beliefs that may not prove to be accurate, and SJI may not achieve its stated long-term goals by 2020 or at all. SJI’s current long-term goals are to (i) grow Economic Earnings to $150 million by 2020; (ii) improve the quality of its earnings; (iii) strengthen its balance sheet; and (iv) maintain a low-to-moderate risk profile. Management established those goals in conjunction with SJI’s board of directors based upon a number of different internal and external factors that characterize and influence SJI’s current and expected future activities. For example, these long-term goals are based on certain assumptions regarding SJI’s participation in a current project to build a 100-mile natural gas pipeline in Pennsylvania and New Jersey. However, construction on this project has not yet begun, and this project is subject to a number of regulatory approvals, including approval from the Federal Energy Regulatory Commission, which is not expected until the first quarter of fiscal 2017. The target completion date for this project has been delayed until the second half of 2018, and is subject to further delay. As a result, no assurance can be given that this project will be completed on time or at all. Further, the economy of Southern New Jersey has remained depressed relative to other regions, which could cause customer delinquencies or otherwise negatively affect achievement of SJI’s long-term earnings goals. Due to a term limit, the upcoming 2017 New Jersey gubernatorial election will result in a change in administration, which could lead to unfavorable local regulatory changes that could delay approvals, require environmental remediation or capital or other expenditures or otherwise adversely affect SJI’s results of operations, financial condition or cash flows. Other factors, assumptions and beliefs of management and SJI’s board of directors on which SJI’s long-term goals were based may also prove to differ materially from actual future results. Accordingly, SJI may not achieve its stated long-term goals by 2020 or at all, or SJI’s stated long-term goals may be negatively revised as a result of less than expected progress toward achieving these goals, and you are therefore cautioned not to place undue reliance on these goals.

SJI’s business could be harmed by cybersecurity threats and related disruptions. SJI relies extensively on information technology systems to process transactions, transmit and store information and manage SJI’s business. Disruption or failure of SJI’s information technology systems could shut down SJI’s facilities or otherwise harm its ability to safely deliver natural gas to its customers, serve its customers effectively or manage its assets, or otherwise materially disrupt its business. Cyber threats are constantly evolving, increasing the difficulty of detecting and successfully defending against them. SJI has experienced such attacks in the past; however, based on information currently available to SJI, none have had a material impact on its business, financial condition, results of operations or cash flows. In response, SJI has invested in expanded cybersecurity systems and procedures designed to ensure the continuous and uninterrupted performance of its information technology systems and protect against unauthorized access. However, all information technology systems are potentially vulnerable to security threats, including hacking, viruses, other malicious software, and other unlawful attempts to disrupt or gain access to such systems. There is no guarantee that SJI’s cybersecurity systems and procedures will prevent or detect the unauthorized access by experienced computer programmers, hackers or others. An attack on or failure of SJI’s information technology systems could result in the unauthorized disclosure, theft, misuse or destruction of customer or employee data or business or confidential information, or disrupt the performance of its information technology systems. These events could expose SJI to potential liability, litigation, governmental inquiries, investigations or regulatory actions, harm its brand and reputation, diminish customer confidence, disrupt operations, and subject SJI to payment of fines or other penalties, legal claims by its clients and significant remediation costs.

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Item 6. Exhibits

(a)  Exhibits

Exhibit No.	Description
3.1	Bylaws of South Jersey Industries, Inc. as amended and restated through April 29, 2016. (Incorporated by reference from Exhibit 3.2(ii) to the Registrant's Current Report on Form 8-K filed May 3, 2016).
3.2	Bylaws of South Jersey Gas Company, as amended and restated through April 29, 2016. (Incorporated by reference from Exhibit 3.2(ii) to SJG's Current Report on Form 8-K filed May 4, 2016).
10.1	Amendment No. 1, dated as of March 10, 2016, by and among South Jersey Industries, Inc., the banks party thereto, and JPMorgan Chase Bank, N.A., as issuing bank and administrative agent, which supports the letter of credit related to the Marina Energy LLC - 2001 Project Series A bonds in the aggregate principal amount of $20 million, including an amendment to the related reimbursement agreement, dated as of March 15, 2012. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed March 11, 2016).
10.2	Amendment No. 1, dated as of March 10, 2016, by and among South Jersey Industries, Inc., the banks party thereto, and JPMorgan Chase Bank, N.A., as issuing bank and administrative agent, which supports the letter of credit related to the Marina Energy LLC - 2001 Project Series B bonds in the aggregate principal amount of $25 million, including an amendment to the related reimbursement agreement, dated as of March 15, 2012. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed March 11, 2016).
10.3	Amendment No. 1, dated as of March 10, 2016, by and among South Jersey Industries, Inc., the banks party thereto, and JPMorgan Chase Bank, N.A., as issuing bank and administrative agent, which supports the letter of credit related to the Marina Energy LLC - 2006 Project Series A bonds in the aggregate principal amount of $16.4 million, including an amendment to the related reimbursement agreement, dated as of March 15, 2012. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed March 11, 2016).
31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Exchange Act.
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Exchange Act.
32.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(b) of the Exchange Act as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
32.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(b) of the Exchange Act as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
101	The following financial statements from South Jersey Industries’ Quarterly Report on Form 10-Q for the three months ended March 31, 2016, filed with the Securities and Exchange Commission on May 6, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income; (ii) the Condensed Consolidated Statements of Comprehensive Income; (iii) the Condensed Consolidated Statements of Cash Flows; (iv) the Condensed Consolidated Balance Sheets and (v) the Notes to Condensed Consolidated Financial Statements.

51

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized

		SOUTH JERSEY INDUSTRIES, INC.
		(Registrant)
Dated:	May 6, 2016	By:	/s/ Stephen H. Clark
			Stephen H. Clark
			Senior Vice President & Chief Financial Officer
			(Principal Financial Officer)

52

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Michael J. Renna, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2016, of South Jersey Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15 d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

		South Jersey Industries, Inc.
Date:	May 6, 2016	By:	/s/ Michael J. Renna
			Michael J. Renna
			Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Stephen H. Clark, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2016, of South Jersey Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15 d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

		South Jersey Industries, Inc.
Date:	May 6, 2016	By:	/s/ Stephen H. Clark
			Stephen H. Clark
			Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with the filing of the Quarterly Report on Form 10-Q of South Jersey Industries, Inc. (the “Company”) for the period ended March 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael J. Renna, Chief Executive Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael J. Renna  

Name:  Michael J. Renna  

Title:  Chief Executive Officer

May 6, 2016

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with the filing of the Quarterly Report on Form 10-Q of South Jersey Industries, Inc. (the “Company”) for the period ended March 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen H. Clark, Chief Financial Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Stephen H. Clark

Name:  Stephen H. Clark

Title:  Chief Financial Officer

May 6, 2016

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 02, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	SOUTH JERSEY INDUSTRIES INC
Entity Central Index Key	0000091928
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		71,425,506

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) $ / shares shares	Mar. 31, 2015 USD ($) $ / shares shares
Operating Revenues:
Utility	$ 183,669	$ 266,530
Nonutility	149,366	116,422
Total Operating Revenues	333,035	382,952
Cost of Sales - (Excluding depreciation)
- Utility	65,206	144,974
- Nonutility	87,769	96,733
Operations	38,797	41,861
Maintenance	4,384	3,998
Depreciation	20,701	16,819
Energy and Other Taxes	1,925	2,196
Total Operating Expenses	218,782	306,581
Operating Income	114,253	76,371
Other Income and Expense	2,203	2,241
Interest Charges	(9,160)	(8,601)
Income Before Income Taxes	107,296	70,011
Income Taxes	(39,267)	(16,613)
Equity in Earnings of Affiliated Companies	158	455
Income from Continuing Operations	68,187	53,853
Loss from Discontinued Operations - (Net of tax benefit)	(118)	(276)
Net Income	$ 68,069	$ 53,577
Basic Earnings Per Common Share:
Continuing Operations (in dollars per share) | $ / shares	$ 0.96	$ 0.79
Discontinued Operations (in dollars per share) | $ / shares	0.00	0.00
Basic Earnings Per Common Share (in dollars per share) | $ / shares	$ 0.96	$ 0.79
Average Shares of Common Stock Outstanding - Basic (in shares) | shares	71,127	68,397
Diluted Earnings Per Common Share:
Continuing Operations (in dollars per share) | $ / shares	$ 0.95	$ 0.79
Discontinued Operations (in dollars per share) | $ / shares	0.00	0.00
Diluted Earnings Per Common Share (in dollars per share) | $ / shares	$ 0.95	$ 0.79
Average Shares of Common Stock Outstanding - Diluted (in shares) | shares	71,416	68,618
Dividends Declared Per Common Share (in dollars per share) | $ / shares	$ 0.26	$ 0.25

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Net Income		$ 68,069	$ 53,577
Other Comprehensive Income, Net of Tax:
Unrealized Gain on Available-for-Sale Securities	[1]	49	88
Unrealized Gain on Derivatives - Other	[1]	51	8
Other Comprehensive Loss of Affiliated Companies	[1]	0	(95)
Other Comprehensive Income - Net of Tax	[1]	100	1
Comprehensive Income		$ 68,169	$ 53,578

[1] Determined using a combined average statutory tax rate of 40%.

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Combined statutory tax rate	40.00%	40.00%

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Cash Flows [Abstract]
Net Cash Provided by Operating Activities	$ 98,080	$ 34,936
Cash Flows from Investing Activities:
Capital Expenditures	(67,416)	(54,307)
Purchase of Available for Sale Securities	0	(6,059)
Proceeds from Restricted Investments	1,738	0
Net Proceeds from Sale of Restricted Investments in Margin Account	8,906	4,829
Investment in Long-Term Receivables	(3,142)	(4,658)
Proceeds from Long-Term Receivables	2,527	1,808
Notes Receivable	(50)	0
Purchase of Company-Owned Life Insurance	(357)	(356)
Investment in Affiliate	(3,079)	(717)
Advances on Notes Receivable - Affiliate	0	(1,265)
Repayment of Notes Receivable - Affiliate	1,626	275
Net Cash Used in Investing Activities	(59,247)	(60,450)
Cash Flows from Financing Activities:
Net (Repayments of) Borrowings from Short-Term Credit Facilities	(92,200)	26,700
Proceeds from Issuance of Long-Term Debt	61,000	0
Principal Repayments of Long-Term Debt	(12,905)	0
Proceeds from Sale of Common Stock	5,645	1,857
Net Cash (Used in) Provided by Financing Activities	(38,460)	28,557
Net Increase in Cash and Cash Equivalents	373	3,043
Cash and Cash Equivalents at Beginning of Period	3,877	4,171
Cash and Cash Equivalents at End of Period	$ 4,250	$ 7,214

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment:
Utility Plant, at original cost	$ 2,261,409	$ 2,211,239
Accumulated Depreciation	(450,001)	(440,473)
Nonutility Property and Equipment, at cost	784,495	785,646
Accumulated Depreciation	(117,737)	(108,307)
Property, Plant and Equipment - Net	2,478,166	2,448,105
Investments:
Available-for-Sale Securities	14,960	14,810
Restricted	37,893	48,758
Investment in Affiliates	20,254	16,983
Total Investments	73,107	80,551
Current Assets:
Cash and Cash Equivalents	4,250	3,877
Accounts Receivable	179,662	178,359
Unbilled Revenues	47,502	40,044
Provision for Uncollectibles	(10,024)	(10,252)
Notes Receivable	11,819	11,800
Notes Receivable - Affiliate	1,508	3,134
Natural Gas in Storage, average cost	38,571	54,211
Materials and Supplies, average cost	6,762	5,088
Prepaid Taxes	11,382	21,753
Derivatives - Energy Related Assets	57,815	83,093
Other Prepayments and Current Assets	46,863	40,167
Total Current Assets	396,110	431,274
Regulatory and Other Noncurrent Assets:
Regulatory Assets	356,962	323,434
Derivatives - Energy Related Assets	19,489	16,238
Notes Receivable - Affiliate	13,275	13,275
Contract Receivables	29,039	28,609
Notes Receivable	31,888	35,439
Goodwill	8,139	8,880
Identifiable Intangible Assets	21,850	21,553
Other	65,959	64,575
Total Regulatory and Other Noncurrent Assets	546,601	512,003
Total Assets	3,493,984	3,471,933
Regulatory Liabilities [Line Items]
Total Regulatory Liabilities	55,373	42,841
Equity:
Common Stock	89,048	88,707
Premium on Common Stock	505,601	499,460
Treasury Stock (at par)	(262)	(296)
Accumulated Other Comprehensive Loss	(24,399)	(24,499)
Retained Earnings	523,454	474,167
Total Equity	1,093,442	1,037,539
Long-Term Debt	1,046,968	997,427
Total Capitalization	2,140,410	2,034,966
Current Liabilities:
Notes Payable	339,500	431,700
Current Portion of Long-Term Debt	28,604	29,454
Accounts Payable	151,006	186,400
Customer Deposits and Credit Balances	19,340	20,146
Environmental Remediation Costs	55,065	50,559
Taxes Accrued	3,737	2,336
Derivatives - Energy Related Liabilities	66,370	90,708
Dividends Payable	18,790	0
Interest Accrued	6,108	7,316
Pension Benefits	2,261	2,261
Other Current Liabilities	7,222	11,596
Total Current Liabilities	698,003	832,476
Deferred Credits and Other Noncurrent Liabilities:
Deferred Income Taxes - Net	333,572	295,945
Pension and Other Postretirement Benefits	77,720	76,068
Environmental Remediation Costs	85,263	76,064
Asset Retirement Obligations	58,054	57,943
Derivatives - Energy Related Liabilities	10,148	21,697
Derivatives - Other	13,118	10,943
Regulatory Liabilities	55,373	42,841
Other	22,323	22,990
Total Deferred Credits and Other Noncurrent Liabilities	$ 655,571	$ 604,491
Commitments and Contingencies
Total Capitalization and Liabilities	$ 3,493,984	$ 3,471,933
Excess Plant Removal Costs
Regulatory Liabilities [Line Items]
Total Regulatory Liabilities	32,294	32,644
Deferred Revenues - Net
Regulatory Liabilities [Line Items]
Total Regulatory Liabilities	11,241	0
Societal Benefit Costs
Regulatory Liabilities [Line Items]
Total Regulatory Liabilities	9,454	10,197
Energy Efficiency Tracker
Regulatory Liabilities [Line Items]
Total Regulatory Liabilities	$ 2,384	$ 0

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

GENERAL - South Jersey Industries, Inc. (SJI or the Company) currently provides a variety of energy-related products and services primarily through the following wholly-owned subsidiaries:

▪ South Jersey Gas Company (SJG) is a regulated natural gas utility. SJG distributes natural gas in the seven southernmost counties of New Jersey.

▪ South Jersey Energy Company (SJE) acquires and markets natural gas and electricity to retail end users and provides total energy management services to commercial, industrial and residential customers.

▪ South Jersey Resources Group, LLC (SJRG) markets natural gas storage, commodity and transportation assets along with fuel management services on a wholesale basis in the mid-Atlantic, Appalachian and southern states.

▪ South Jersey Exploration, LLC (SJEX) owns oil, gas and mineral rights in the Marcellus Shale region of Pennsylvania.

▪ Marina Energy, LLC (Marina) develops and operates on-site energy-related projects. The following entities are wholly-owned subsidiaries of Marina as of December 31, 2015 (see Note 3):

•ACB Energy Partners, LLC (ACB) owns and operates a natural gas fueled combined heating, cooling and power facility located in Atlantic City, New Jersey.

•AC Landfill Energy. LLC (ACLE), BC Landfill Energy, LLC (BCLE), SC Landfill Energy, LLC (SCLE) and SX Landfill Energy, LLC (SXLE) own and operate landfill gas-fired electric production facilities in Atlantic, Burlington, Salem and Sussex Counties located in New Jersey.

•MCS Energy Partners, LLC (MCS), NBS Energy Partners, LLC (NBS) and SBS Energy Partners, LLC (SBS) own and operate solar-generation sites located in New Jersey.

▪ South Jersey Energy Service Plus, LLC (SJESP) services residential and small commercial HVAC systems, installs small commercial HVAC systems, provides plumbing services and services appliances under warranty via a subcontractor arrangement as well as on a time and materials basis.

▪ SJI Midstream, LLC was formed in 2014 to invest in infrastructure and other midstream projects, including a current project to build a 100-mile natural gas pipeline in Pennsylvania and New Jersey.

BASIS OF PRESENTATION — The condensed consolidated financial statements include the accounts of SJI, its wholly-owned subsidiaries and subsidiaries in which SJI has a controlling interest. SJI eliminates all significant intercompany accounts and transactions. In management’s opinion, the condensed consolidated financial statements reflect all normal and recurring adjustments needed to fairly present SJI’s financial position, operating results and cash flows at the dates and for the periods presented. SJI’s businesses are subject to seasonal fluctuations and, accordingly, this interim financial information should not be the basis for estimating the full year’s operating results. As permitted by the rules and regulations of the Securities and Exchange Commission (SEC), the accompanying unaudited condensed consolidated financial statements contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). These financial statements should be read in conjunction with SJI’s 2015 Annual Report on Form 10-K for a more complete discussion of the Company’s accounting policies and certain other information.

Certain reclassifications have been made to the prior period's condensed consolidated balance sheets, as well as the prior period long-term debt carrying value and prior period's segment disclosures in Notes 5 and 6, respectively, to conform to the current period presentation. The unamortized debt issuance costs previously included in "Regulatory and Other Noncurrent Assets" on the condensed consolidated balance sheets were reclassified to Long-Term Debt to conform to ASU 2015-03, which is described below under "New Accounting Pronouncements." This reclassification caused the prior period long-term debt carrying value in Note 5 to be adjusted, along with the prior period unamortized debt issuance costs recorded as Identifiable Assets in the Gas Utility Operations, On-Site Energy Production and Corporate and Services segments in Note 6 to be removed.

On February 26, 2015, the Board of Directors approved an amendment to SJI's Certificate of Incorporation to increase the authorized number of shares of common stock from 60,000,000 shares to 120,000,000 shares. The principal purpose of the increase was to permit a two-for-one split of all the issued shares of SJI's common stock, effected pursuant to a stock dividend of one share of common stock for each outstanding share of common stock, payable May 8, 2015 to shareholders of record at the close of business on April 17, 2015. All references to number of shares and per share information in the condensed consolidated financial statements and related notes have been adjusted for all periods presented to reflect this stock split.

REVENUE AND THROUGHPUT-BASED TAXES — SJG collects certain revenue-based energy taxes from its customers. Such taxes include New Jersey State Sales Tax and Public Utilities Assessment (PUA). State sales tax is recorded as a liability when billed to customers and is not included in revenue or operating expenses. The PUA is included in both utility revenue and energy and other taxes and totaled $0.4 million and $0.6 million for the three months ended March 31, 2016 and 2015, respectively.

IMPAIRMENT OF LONG-LIVED ASSETS - SJI reviews the carrying amount of long-lived assets for possible impairment whenever events or changes in circumstances indicate that such amounts may not be recoverable. For the three months ended March 31, 2016 and 2015, no impairments were identified.

GAS EXPLORATION AND DEVELOPMENT - The Company capitalizes all costs associated with gas property acquisition, exploration and development activities under the full cost method of accounting. Capitalized costs include costs related to unproved properties, which are not amortized until proved reserves are found or it is determined that the unproved properties are impaired. All costs related to unproved properties are reviewed quarterly to determine if impairment has occurred. No impairment charges were recorded during the three months ended March 31, 2016 or 2015. As of both March 31, 2016 and December 31, 2015, $8.9 million related to interests in proved and unproved properties in Pennsylvania, net of amortization, is included with Nonutility Property and Equipment and Other Noncurrent Assets on the condensed consolidated balance sheets.

TREASURY STOCK – SJI uses the par value method of accounting for treasury stock. As of March 31, 2016 and December 31, 2015, SJI held 209,298 and 236,571 shares of treasury stock, respectively. These shares are related to deferred compensation arrangements where the amounts earned are held in the stock of SJI.

INCOME TAXES — Deferred income taxes are provided for all significant temporary differences between the book and taxable bases of assets and liabilities in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740 - “Income Taxes”.  A valuation allowance is established when it is determined that it is more likely than not that a deferred tax asset will not be realized. Investment tax credits related to renewable energy facilities of Marina are recognized on the flow-through method, which may result in variations in the customary relationship between income taxes and pre-tax income for interim periods.

GOODWILL - Goodwill was acquired as part of the acquisition of Energenic projects discussed in Note 3 and is a part of the on-site energy production segment. Goodwill represents the excess of the consideration paid over the fair value of identifiable net assets acquired. Goodwill is not amortized, but instead is subject to impairment testing on an annual basis, and between annual tests whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying amount. No such events have occurred during the three months ended March 31, 2016. The Company recorded $8.1 million and $8.9 million of Goodwill on the condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015, respectively.

The following table summarizes the changes in Goodwill for the three months ended March 31, 2016 (in thousands):

	2016
Beginning Balance, January 1	$	8,880
Fair Value Adjustments During Measurement Periods (See Note 3)	(741		)
Ending Balance, March 31	$	8,139

NEW ACCOUNTING PRONOUNCEMENTS — Other than as described below, no new accounting pronouncement issued or effective during 2016 or 2015 had, or is expected to have, a material impact on the condensed consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU supersedes the revenue recognition requirements in FASB ASC 605, Revenue Recognition, and in most industry-specific topics. The new guidance identifies how and when entities should recognize revenue. The new rules establish a core principle requiring the recognition of revenue to depict the transfer of promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40); Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. The new guidance requires management of a company to evaluate whether there is substantial doubt about the company's ability to continue as a going concern. This ASU is effective for the annual reporting period ending after December 15, 2016, and for interim and annual reporting periods thereafter, with early adoption permitted. The Company does not expect this standard to have an impact on its consolidated financial statements upon adoption.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis, which changes the analysis to be performed in determining whether certain types of legal entities should be consolidated. Specifically, the standard amends the evaluation of whether (a) fees paid to a decision maker or a service provider represent a variable interest, (b) a limited partnership or similar entity has the characteristics of a Variable Interest Entity ("VIE") and (c) a reporting entity is the primary beneficiary of a VIE. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015, with early adoption permitted. Adoption of this guidance did not have an impact on the Company's financial statement results.

In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This ASU requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Adoption of this guidance did not have an impact on the Company's results of operations; however, balance sheet presentations were modified to conform to this guidance.

Also in April 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40). This ASU provides guidance to customers (a) in determining whether a cloud computing arrangement includes a software license, and (b) on how the arrangement should be accounted for, depending on whether or not it includes a software license. The amended guidance is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Adoption of this guidance did not have an impact on the Company's financial statement results.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. This ASU states that inventory for which cost is determined using a method other than last-in, first-out (LIFO) or the retail method should be subsequently measured at the lower of cost or net realizable value (NRV), rather than at the lower of cost or market. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In August 2015, the FASB issued ASU 2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. This ASU states that, given the absence of authoritative guidance for debt issuance costs related to line-of-credit arrangements within ASU 2015-03 (discussed above), the SEC staff would not object to an entity deferring and presenting such costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of credit arrangement. The adoption of this standard did not have an impact on the Company's financial statement results.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which enhances the reporting model for financial instruments and includes amendments to address aspects of recognition, measurement, presentation and disclosure. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted for only certain portions of the new guidance. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In March 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The new standard requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The new standard also will result in enhanced quantitative and qualitative disclosures, including significant judgments made by management, to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing leases. The accounting for leases by the lessor remains relatively the same. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships. The amendments in this guidance clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016, with early adoption permitted. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In March 2016, the FASB issued ASU 2016-07, Investments- Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting, which eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016, with early adoption permitted. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This standard amends ASU 2014-09 (discussed above), to improve the implementation guidance on principal versus agent considerations and whether an entity reports revenue on a gross or net basis. This standard will have the same effective date and transition requirements as ASU 2014-09. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies various aspects of accounting for share-based payment arrangements. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016, with early adoption permitted. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. This standard amends ASU 2014-09 (discussed above), to clarify identifying performance obligations and the licensing implementation guidance. This standard will have the same effective date and transition requirements as ASU 2014-09. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

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STOCK-BASED COMPENSATION PLAN

3 Months Ended

Mar. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION PLAN

STOCK-BASED COMPENSATION PLAN:

On April 30, 2015, the shareholders of SJI approved the adoption of the Company's 2015 Omnibus Equity Compensation Plan (Plan), replacing the Amended and Restated 1997 Stock-Based Compensation Plan that had terminated on January 26, 2015. Under the Plan, shares may be issued to SJI’s officers (Officers), non-employee directors (Directors) and other key employees. No options were granted or outstanding during the three months ended March 31, 2016 and 2015.  No stock appreciation rights have been issued under the plans. During the three months ended March 31, 2016 and 2015, SJI granted 192,760 and 151,354 restricted shares, respectively, to Officers and other key employees under the plans.  Performance-based restricted shares vest over a three-year period and are subject to SJI achieving certain market and earnings-based performance targets, which can cause the actual amount of shares that ultimately vest to range from 0% to 200% of the original share units granted.

Beginning in 2015, SJI grants time-based shares of restricted stock, one-third of which vests annually over a three-year period and is limited to 100% payout. Vesting of time-based grants is contingent upon SJI achieving a return on equity (ROE) of at least 7% during the initial year of the grant and meeting the service requirement. Provided that the 7% ROE requirement is met in the initial year, payout is solely contingent upon the service requirement being met in years two and three of the grant. During the three months ended March 31, 2016 and 2015, Officers and other key employees were granted 57,828 and 45,406 shares of time-based restricted stock, which are included in the shares noted above.

Grants containing market-based performance targets use SJI's total shareholder return (TSR) relative to a peer group to measure performance. As TSR-based grants are contingent upon market and service conditions, SJI is required to measure and recognize stock-based compensation expense based on the fair value at the date of grant on a straight-line basis over the requisite three-year period of each award. In addition, SJI identifies specific forfeitures of share-based awards, and compensation expense is adjusted accordingly over the requisite service period. Compensation expense is not adjusted based on the actual achievement of performance goals. The fair value of TSR-based restricted stock awards on the date of grant is estimated using a Monte Carlo simulation model.

Through 2014, grants containing earnings-based targets were based on SJI's earnings per share (EPS) growth rate relative to a peer group to measure performance. In 2015, earning-based performance targets included pre-defined EPS and return on equity (ROE) goals to measure performance. Beginning in 2016, performance targets include pre-defined Economic Earnings compound annual growth rate (EE) for SJI. As EPS-based, ROE-based and EE-based grants are contingent upon performance and service conditions, SJI is required to measure and recognize stock-based compensation expense based on the fair value at the date of grant over the requisite three-year period of each award. The fair value is measured as the market price at the date of grant. The initial accruals of compensation expense are based on the estimated number of shares expected to vest, assuming the requisite service is rendered and probable outcome of the performance condition is achieved. That estimate is revised if subsequent information indicates that the actual number of shares is likely to differ from previous estimates. Compensation expense is ultimately adjusted based on the actual achievement of service and performance targets.

During the three months ended March 31, 2016 and 2015, SJI granted 32,882 and 25,398 restricted shares, respectively, to Directors.  Shares issued to Directors vest over twelve months and contain no performance conditions. As a result, 100% of the shares granted generally vest.

The following table summarizes the nonvested restricted stock awards outstanding at March 31, 2016 and the assumptions used to estimate the fair value of the awards:

	Grants	Shares Outstanding	Fair Value Per Share		Expected Volatility		Risk-Free Interest Rate
Officers & Key Employees -	2014 - TSR	51,042	$	21.31	20.0	%	0.80	%
	2014 - EPS	51,042	$	27.22	N/A		N/A
	2015 - TSR	34,406	$	26.31	16.0	%	1.10	%
	2015 - EPS, ROE, Time	75,300	$	29.47	N/A		N/A
	2016 - TSR	67,466	$	22.01	18.1	%	1.31	%
	2016 - EE, Time	125,294	$	23.52	N/A		N/A
Directors -	2016	32,882	$	23.52	N/A		N/A

Expected volatility is based on the actual volatility of SJI’s share price over the preceding three-year period as of the valuation date. The risk-free interest rate is based on the zero-coupon U.S. Treasury Bond, with a term equal to the three-year term of the Officers’ and other key employees’ restricted shares. As notional dividend equivalents are credited to the holders during the three-year service period, no reduction to the fair value of the award is required. As the Directors’ restricted stock awards contain no performance conditions and dividends are paid or credited to the holder during the requisite service period, the fair value of these awards are equal to the market value of the shares on the date of grant.

The following table summarizes the total stock-based compensation cost for the three months ended March 31, 2016 and 2015 (in thousands):

	Three Months Ended March 31,
	2016			2015
Officers & Key Employees	$	817		$	799
Directors	193			186
Total Cost	1,010			985
Capitalized	(106		)	(91		)
Net Expense	$	904		$	894

As of March 31, 2016, there was $6.5 million of total unrecognized compensation cost related to nonvested stock-based compensation awards granted under the plans. That cost is expected to be recognized over a weighted average period of 2.2 years.

The following table summarizes information regarding restricted stock award activity during the three months ended March 31, 2016, excluding accrued dividend equivalents:

	Officers &Other Key Employees		Directors		Weighted Average Fair Value
Nonvested Shares Outstanding, January 1, 2016	226,191		26,338		$	26.89
Granted	192,760		32,882		$	23.07
Cancelled/Forfeited	(1,154	)	—		$	26.24
Vested	(13,247	)	(26,338	)	$	29.30
Nonvested Shares Outstanding, March 31, 2016	404,550		32,882		$	24.70

Performance targets during the three-year vesting period were not attained for the 2012 or 2013 Officer and other key employee grants that vested at December 31, 2014 and 2015, respectively. As a result, no shares were awarded in 2015 or 2016 associated with those grants. However, the initial performance hurdle for the 2015 time-based grant was met. As a result, 13,247 shares were awarded to Officers and other key employees during the three months ended March 31, 2016 at a market value of $0.3 million. During the three months ended March 31, 2016 and 2015, SJI granted 32,882 and 25,398 shares to its Directors at a market value of $0.8 million and $0.7 million, respectively. The Company has a policy of issuing new shares to satisfy its obligations under the Plan; therefore, there are no cash payment requirements resulting from the normal operation of the Plan. However, a change in control could result in such shares becoming nonforfeitable or immediately payable in cash.  At the discretion of the Officers, Directors and other key employees, the receipt of vested shares can be deferred until future periods.  These deferred shares are included in Treasury Stock on the condensed consolidated balance sheets.

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AFFILIATIONS AND DISCONTINUED OPERATIONS

3 Months Ended

Mar. 31, 2016

Business Combinations [Abstract]

AFFILIATIONS AND DISCONTINUED OPERATIONS

AFFILIATIONS AND DISCONTINUED OPERATIONS:

AFFILIATIONS — The following affiliated entities are accounted for under the equity method:

Energenic – US, LLC (Energenic) - Marina and a joint venture partner formed Energenic, in which Marina has a 50% equity interest. Energenic develops and operates on-site, self-contained, energy-related projects.

On December 31, 2015, Energenic, Marina and its joint venture partner entered into two Equity Distribution and Purchase Agreements (the "Transaction"), pursuant to which Marina became the sole owner of eight of the Energenic projects ("Marina Projects") and its joint venture partner became the sole owner of seven other Energenic projects ("Partner Projects"). The Transaction has been accounted for as a distribution of member interests by Energenic to its owners and a business combination through the exchange of member interests in various projects between Marina and its joint venture partner. In connection with the exchange, the joint venture partner provided a $19.5 million note payable to Marina. The note and other existing obligations of the joint venture partner to Marina are included in Notes Receivable on the condensed consolidated balance sheets, with approximately $1.8 million being included as a current asset as of March 31, 2016, as it is due within one year. This note is collateralized by security interests in various energy project assets owned by the joint venture partner, as well as personal guarantees from its principals.

As part of the transaction, each party is relieved of any guarantees related to the Projects in which it no longer has an ownership interest.

The projects that are now wholly-owned by Marina are ACB, ACLE, BCLE, SCLE, SXLE, MCS, NBS and SBS.

Through December 31, 2015, Marina’s investment in Energenic was accounted for under the equity method of accounting. As such, Marina’s share of the equity value of the projects was included within Investment in Affiliates on the condensed consolidated balance sheets and Marina’s share of the loss or earnings from the projects for the three months ended March 31, 2015 was included within Equity in Earnings of Affiliated Companies on the condensed consolidated statements of income. As of December 31, 2015, the assets and liabilities of the projects that are now wholly-owned by Marina are consolidated into the condensed consolidated balance sheets. Beginning in 2016, the respective results from operations and cash flows of the projects that are now wholly-owned by Marina are consolidated into the condensed consolidated statements of income and cash flows. The results of the acquired projects are included in the On-Site Energy Production segment.

The following table summarizes the preliminary purchase price allocation and reflects 100% of the fair values of the assets acquired and the liabilities assumed by the Company in connection with the Transaction. The Company is still awaiting final valuation reports supporting the allocation of the purchase price to certain identifiable intangibles. Total consideration for the step acquisition of the remaining interest in the Marina Projects was $46.0 million, which represents the fair value of the Company’s interest in the Partner Projects exchanged ($31.5 million) as well as the existing value of the Marina Projects immediately prior to the exchange ($14.5 million) (in thousands):

Current assets (excluding inventory)	$	7,804
Inventory	3,154
Note Receivable Received	19,504
Fixed Assets	41,190
Intangible Assets:
Identifiable Intangibles	22,220
Goodwill	8,139
Non-Current Assets	1,873
Current Liabilities	(8,196		)
Note Payable - Affiliate	(16,986		)
Long-Term Debt, including current portion	(21,642		)
Capital Lease Payable	(10,458		)
Other Non-Current Liabilities	(572		)
Fair Value of Consolidated Assets and Liabilities of Acquired Projects	$	46,030

The recorded amounts for assets and liabilities represent the Company's best estimate as of March 31, 2016. The measurement period adjustments recorded during the three months ended March 31, 2016 did not have a significant impact on the Company's condensed consolidated balance sheet. The pro forma impact of this transaction on the operations of the Company is not significant.

Potato Creek, LLC (Potato Creek) - SJI and a joint venture partner formed Potato Creek, in which SJI has a 30% equity interest.  Potato Creek owns and manages the oil, gas and mineral rights of certain real estate in Pennsylvania.

PennEast Pipeline Company, LLC (PennEast) - Midstream has a 20% investment in PennEast, which is planning to construct an approximately 100-mile natural gas pipeline that will extend from Northeastern Pennsylvania into New Jersey, with a target completion of 2018.

During the first three months of 2016 and 2015, the Company made net investments in unconsolidated affiliates of $1.5 million and $1.7 million, respectively.  As of March 31, 2016 and December 31, 2015, the outstanding balance of Notes Receivable – Affiliate was $14.8 million and $16.4 million, respectively. As of March 31, 2016, approximately $13.7 million of these notes are secured by property, plant and equipment of the affiliates, accrue interest at 7.5% and are to be repaid through 2025. The remaining $1.1 million of these notes are unsecured and accrue interest at variable rates.

SJI holds significant variable interests in these entities but is not the primary beneficiary. Consequently, these entities are accounted for under the equity method because SJI does not have both a) the power to direct the activities of the entity that most significantly impact the entity’s economic performance and b) the obligation to absorb losses of the entity that could potentially be significant to the entity or the right to receive benefits from the entity that could potentially be significant to the entity. As of March 31, 2016, the Company had a net asset of approximately $20.3 million included in Investment in Affiliates on the condensed consolidated balance sheets related to equity method investees, in addition to Notes Receivable – Affiliate as discussed above. SJI’s maximum exposure to loss from these entities as of March 31, 2016, is limited to its combined equity contributions and the Notes Receivable-Affiliate in the aggregate amount of $35.1 million.

DISCONTINUED OPERATIONS - Discontinued Operations consist of the environmental remediation activities related to the properties of South Jersey Fuel, Inc. (SJF) and the product liability litigation and environmental remediation activities related to the prior business of The Morie Company, Inc. (Morie). SJF is a subsidiary of Energy & Minerals, Inc. (EMI), an SJI subsidiary, which previously operated a fuel oil business. Morie is the former sand mining and processing subsidiary of EMI. EMI sold the common stock of Morie in 1996.

SJI conducts tests annually to estimate the environmental remediation costs for these properties.

Summarized operating results of the discontinued operations for the three months endedMarch 31, 2016 and 2015, were (in thousands, except per share amounts):

	Three Months Ended March 31,
	2016			2015
Loss before Income Taxes:
Sand Mining	$	(146	)	$	(347	)
Fuel Oil	(35		)	(66		)
Income Tax Benefits	63			137
Loss from Discontinued Operations — Net	$	(118	)	$	(276	)
Earnings Per Common Share from
Discontinued Operations — Net:
Basic and Diluted	$	—		$	—

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COMMON STOCK

3 Months Ended

Mar. 31, 2016

Common Stock [Abstract]

COMMON STOCK

COMMON STOCK:

The following shares were issued and outstanding:

	2016
Beginning Balance, January 1	70,965,622
New Issues During the Period:
Dividend Reinvestment Plan	229,522
Stock-Based Compensation Plan	43,023
Ending Balance, March 31	71,238,167

The par value ($1.25 per share) of stock issued was recorded in Common Stock and the net excess over par value of approximately $6.1 million was recorded in Premium on Common Stock.

EARNINGS PER COMMON SHARE (EPS) - Basic EPS is based on the weighted-average number of common shares outstanding.  The incremental shares required for inclusion in the denominator for the diluted EPS calculation were 288,502 and 220,762 for the three months ended March 31, 2016 and 2015, respectively. These shares relate to SJI's restricted stock as discussed in Note 2.

DIVIDEND REINVESTMENT PLAN (DRP) - The Company offers a DRP which allows participating shareholders to purchase shares of SJI common stock by automatic reinvestment of dividends or optional purchases. Shares of common stock offered by the DRP have been issued directly by SJI from its authorized but unissued shares of common stock. The Company raised $5.6 million and $1.9 million of equity capital through the DRP during the three months ended March 31, 2016 and 2015, respectively.

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FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2016

Financial Instruments, Owned, at Fair Value [Abstract]

FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS:

RESTRICTED INVESTMENTS — Marina is required to maintain escrow accounts related to ongoing capital projects as well as unused loan proceeds pending approval of construction expenditures. As of March 31, 2016 and December 31, 2015, the escrowed funds, including interest earned, totaled $3.2 million and $3.4 million, respectively.

The Company maintains margin accounts with selected counterparties to support its risk management activities. The balances required to be held in these margin accounts increase as the net value of the outstanding energy-related contracts with the respective counterparties decrease. As of March 31, 2016 and December 31, 2015, the balances in these accounts totaled $34.7 million and $43.7 million, respectively.

As of December 31, 2015, in accordance with an outstanding loan agreement which ACB had with a third party, ACB was required to maintain control accounts which included a debt service reserve of $1.7 million. In January 2016, the remaining debt on the loan agreement was paid (see Note 14); as such, there was no reserve as of March 31, 2016.

The carrying amounts of the Restricted Investments approximate their fair values at March 31, 2016 and December 31, 2015, which would be included in Level 1 of the fair value hierarchy (see Note 13).

INVESTMENT IN AFFILIATES - During 2011, subsidiaries of Energenic, in which Marina has a 50% equity interest, entered into 20-year contracts to build, own and operate a central energy center and energy distribution system for a new hotel, casino and entertainment complex in Atlantic City, New Jersey. The complex commenced operations in April 2012, and as a result, Energenic subsidiaries began providing full energy services to the complex. 

In June 2014, the parent company of the hotel, casino and entertainment complex filed petitions in U.S. Bankruptcy Court to facilitate a sale of substantially all of its assets. The complex ceased normal business operations in September 2014. Energenic subsidiaries continued to provide limited energy services to the complex during the shutdown period under a temporary agreement with the trustee. The hotel, casino and entertainment complex was sold in April 2015. As of December 31, 2015, the Energenic subsidiaries were providing limited services to the complex under a short-term agreement with the new owner. However, the Energenic subsidiaries had not been able to secure a permanent or long-term energy services agreement with the new owner.

In 2015 management of the Company and Energenic evaluated the carrying value of the investment in this project and a related note receivable. Based on the inability of the Energenic subsidiaries to secure a permanent or long-term energy services agreement, the Company recorded a $7.7 million (net of tax) non-cash charge to earnings during the second quarter of 2015 due to the reduction in the carrying value of the investment in this project recorded by Energenic. This charge was included in Equity in Loss of Affiliated Companies during the second quarter of 2015 on the condensed consolidated statements of income. Estimating the fair value of an investment is highly judgmental and involves the use of significant estimates and assumptions. Actual results may differ significantly from those used to develop this estimate.

The central energy center and energy distribution system owned by the Energenic subsidiaries was financed in part by the issuance of bonds during 2011. These bonds were collateralized primarily by certain assets of the central energy center and revenue from the energy services agreement with the hotel, casino and entertainment complex. During 2015, due to the cessation of normal business operations of the complex and the inability of the Energenic subsidiaries to meet its obligations under the bonds, the trustee for the bondholders filed suit to foreclose on certain assets of the central energy center. In November 2015 during settlement discussions, the bondholders alleged, among other things, that they were entitled to recover from Energenic itself, any amounts owed under the bonds that were not covered by the collateral, including principal, interest and attorney’s fees. The bondholders’ assertion was based on inconsistent language in the bond documents. In January 2016, Energenic and certain subsidiaries reached a multi-party settlement with the bondholders. This agreement resolves all outstanding litigation and transfers ownership of the bondholders’ collateral to the owners of the entertainment complex. The Company’s share of this settlement was $7.5 million, which was accrued by Energenic as of December 31, 2015 and paid in 2016. Management of Energenic is currently in active settlement discussions and believes that this amount is recoverable from its insurance carrier and external legal advisors.

As of March 31, 2016, the Company, through its investment in Energenic, had a remaining net asset of approximately $1.4 million included in Investment in Affiliates on the condensed consolidated balance sheets related to cogeneration assets for this project. In addition, the Company had approximately $13.7 million included in Notes Receivable - Affiliate on the condensed consolidated balance sheets, due from Energenic, which is secured by those cogeneration assets. This note is subject to a reimbursement agreement that secures reimbursement for the Company, from its joint venture partner, of a proportionate share of any amounts that are not repaid.

Management will continue to monitor the situation surrounding the complex and will evaluate the carrying value of the investment and the note receivable as future events occur.

NOTE RECEIVABLE - In June 2015, SJG advanced $10.0 million to a not-for-profit organization formed to spur economic development in Atlantic City, New Jersey, of which $0.1 million was repaid. The note bears interest at 1.0% for an initial term of six months, with the borrower’s option to extend the term for two additional terms of three months each. In December 2015 and February 2016, the borrower exercised each option, respectively. SJG holds a first lien security interest on land in Atlantic City as collateral against this note.  The carrying amount of this receivable approximates its fair value at March 31, 2016 and December 31, 2015, which would be included in Level 2 of the fair value hierarchy (see Note 13).

LONG-TERM RECEIVABLES — SJG provides financing to customers for the purpose of attracting conversions to natural gas heating systems from competing fuel sources.  The terms of these loans call for customers to make monthly payments over a period of up to five to ten years with no interest.  The carrying amounts of such loans were $12.2 million and $12.9 million as of March 31, 2016 and December 31, 2015, respectively. The current portion of these receivables is reflected in Accounts Receivable and the non-current portion is reflected in Contract Receivables on the condensed consolidated balance sheets. The carrying amounts noted above are net of unamortized discounts resulting from imputed interest in the amount of $1.2 million and $1.3 million as of March 31, 2016 and December 31, 2015, respectively.  The annualized amortization to interest is not material to the Company’s condensed consolidated financial statements.  The carrying amounts of these receivables approximate their fair value at March 31, 2016 and December 31, 2015, which would be included in Level 2 of the fair value hierarchy (see Note 13).

CREDIT RISK - As of March 31, 2016, approximately $12.3 million, or 15.9%, of the current and noncurrent Derivatives – Energy Related Assets are transacted with one counterparty. This counterparty has contracts with a large number of diverse customers which minimizes the concentration of this risk. A portion of these contracts may be assigned to SJI in the event of default by the counterparty.

FINANCIAL INSTRUMENTS NOT CARRIED AT FAIR VALUE - The fair value of a financial instrument is the market price to sell an asset or transfer a liability at the measurement date. The carrying amounts of SJI's financial instruments approximate their fair values at March 31, 2016 and December 31, 2015, except as noted below.

• For Long-Term Debt, in estimating the fair value, we use the present value of remaining cash flows at the balance sheet date. We based the estimates on interest rates available to SJI at the end of each period for debt with similar terms and maturities (Level 2 in the fair value hierarchy, see Note 13). The estimated fair values of SJI's long-term debt, including current maturities, as of March 31, 2016 and December 31, 2015, were $1,143.0 million and $1,079.0 million, respectively.  The carrying amounts of SJI's long-term debt, including current maturities, as of March 31, 2016 and December 31, 2015, were $1,075.6 million and $1,026.9 million, respectively. The carrying amounts as of March 31, 2016 and December 31, 2015 are net of unamortized debt issuance costs of $8.4 million and $9.0 million, respectively (see Note 1).

OTHER FINANCIAL INSTRUMENTS - The carrying amounts of SJI's other financial instruments approximate their fair values at March 31, 2016 and December 31, 2015.

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SEGMENTS OF BUSINESS

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

SEGMENTS OF BUSINESS

SEGMENTS OF BUSINESS:

SJI operates in several different reportable operating segments which reflect the financial information regularly evaluated by the chief operating decision maker. These segments are as follows:

• Gas utility operations (SJG) consist primarily of natural gas distribution to residential, commercial and industrial customers.

• Wholesale energy operations include the activities of SJRG and SJEX.

• SJE is involved in both retail gas and retail electric activities.

◦ Retail gas and other operations include natural gas acquisition and transportation service business lines.

◦ Retail electric operations consist of electricity acquisition and transportation to commercial, industrial and residential customers.

• On-site energy production consists of Marina's thermal energy facility and other energy-related projects. Also included in this segment are the activities of ACB, ACLE, BCLE, SCLE, SXLE, MCS, NBS and SBS. These entities became wholly-owned subsidiaries of Marina on December 31, 2015 (see Note 3).

• Appliance service operations includes SJESP’s servicing of appliances under warranty via a subcontractor arrangement as well as on a time and materials basis. 

• The activities of Midstream are a part of the Corporate and Services segment.

SJI groups its nonutility operations into two categories: Energy Group and Energy Services. Energy Group includes wholesale energy, retail gas and other, and retail electric operations. Energy Services includes on-site energy production and appliance service operations. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Intersegment sales and transfers are treated as if the sales or transfers were to third parties at current market prices.

Information about SJI’s operations in different reportable operating segments is presented below (in thousands):

	Three Months Ended March 31,
	2016			2015
Operating Revenues:
Gas Utility Operations	$	187,766		$	267,658
Energy Group:
Wholesale Energy Operations	65,074			35,345
Retail Gas and Other Operations	29,733			38,078
Retail Electric Operations	39,491			29,777
Subtotal Energy Group	134,298			103,200
Energy Services:
On-Site Energy Production	16,321			13,572
Appliance Service Operations	1,888			2,357
Subtotal Energy Services	18,209			15,929
Corporate and Services	8,876			9,086
Subtotal	349,149			395,873
Intersegment Sales	(16,114		)	(12,921		)
Total Operating Revenues	$	333,035		$	382,952

	Three Months Ended March 31,
	2016			2015
Operating Income:
Gas Utility Operations	$	75,773		$	73,189
Energy Group:
Wholesale Energy Operations	38,244			330
Retail Gas and Other Operations	(759		)	3,087
Retail Electric Operations	585			(182		)
Subtotal Energy Group	38,070			3,235
Energy Services:
On-Site Energy Production	(89		)	(482		)
Appliance Service Operations	44			(52		)
Subtotal Energy Services	(45		)	(534		)
Corporate and Services	455			481
Total Operating Income	$	114,253		$	76,371
Depreciation and Amortization:
Gas Utility Operations	$	15,626		$	14,167
Energy Group:
Wholesale Energy Operations	204			32
Retail Gas and Other Operations	85			20
Subtotal Energy Group	289			52
Energy Services:
On-Site Energy Production	9,919			7,051
Appliance Service Operations	84			74
Subtotal Energy Services	10,003			7,125
Corporate and Services	223			242
Total Depreciation and Amortization	$	26,141		$	21,586
Interest Charges:
Gas Utility Operations	$	4,787		$	5,190
Energy Group:
Wholesale Energy Operations	64			242
Retail Gas and Other Operations	132			73
Subtotal Energy Group	196			315
Energy Services:
On-Site Energy Production	3,462			2,315
Corporate and Services	3,452			2,988
Subtotal	11,897			10,808
Intersegment Borrowings	(2,737		)	(2,207		)
Total Interest Charges	$	9,160		$	8,601

	Three Months Ended March 31,
	2016			2015
Income Taxes:
Gas Utility Operations	$	27,404		$	26,172
Energy Group:
Wholesale Energy Operations	14,737			867
Retail Gas and Other Operations	(168		)	1,576
Retail Electric Operations	239			(74		)
Subtotal Energy Group	14,808			2,369
Energy Services:
On-Site Energy Production	(3,012		)	(12,047		)
Appliance Service Operations	26			(8		)
Subtotal Energy Services	(2,986		)	(12,055		)
Corporate and Services	41			127
Total Income Taxes	$	39,267		$	16,613
Property Additions:
Gas Utility Operations	$	51,370		$	43,326
Energy Group:
Wholesale Energy Operations	6			4
Retail Gas and Other Operations	371			729
Subtotal Energy Group	377			733
Energy Services:
On-Site Energy Production	2,651			4,381
Appliance Service Operations	101			116
Subtotal Energy Services	2,752			4,497
Corporate and Services	163			1,064
Total Property Additions	$	54,662		$	49,620

	March 31, 2016			December 31, 2015
Identifiable Assets (See Note 1):
Gas Utility Operations	$	2,365,728		$	2,281,576
Energy Group:
Wholesale Energy Operations	174,326			231,660
Retail Gas and Other Operations	60,178			55,111
Retail Electric Operations	51,239			55,528
Subtotal Energy Group	285,743			342,299
Energy Services:
On-Site Energy Production	784,474			790,231
Appliance Service Operations	3,849			4,885
Subtotal Energy Services	788,323			795,116
Discontinued Operations	1,542			1,545
Corporate and Services	648,213			652,325
Intersegment Assets	(595,565		)	(600,928		)
Total Identifiable Assets	$	3,493,984		$	3,471,933

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RATES AND REGULATORY ACTIONS

3 Months Ended

Mar. 31, 2016

Public Utilities, General Disclosures [Abstract]

RATES AND REGULATORY ACTIONS

RATES AND REGULATORY ACTIONS:

SJG is subject to the rules and regulations of the New Jersey Board of Public Utilities (BPU).

In January 2016, SJG provided a BGSS bill credit of approximately $20.0 million to its residential and small commercial customers. This credit is in addition to an overall rate reduction of 10.3% that was approved by the BPU and took effect in October 2015. SJG’s ability to offer the BGSS bill credit is a direct result of lower wholesale natural gas prices and the overall management of its gas supply portfolio. The BGSS clause serves as a method to pass along increases or decreases in gas costs to customers; therefore, SJG’s income is not affected by BGSS rate adjustments or bill credits.

On February 29, 2016, SJG filed a petition with the BPU for approval to continue its Accelerated Infrastructure Replacement Program (AIRP), which will expire at the end of 2016. In its petition, SJG has requested approval to continue its AIRP for an additional seven years, with program investments totaling approximately $500.0 million, to retire and replace bare steel and cast iron mains, bare steel services, and other aging infrastructure. The petition proposes to recover the costs of, and a return on, future AIRP investments through annual base rate adjustments. The petition also includes a request to reflect in base rates approximately $76.0 million of AIRP investments that will have been made since the conclusion of SJG’s last base rate case in October 2014 through the end 2016.

In February 2016, the BPU approved a $7.9 million revenue decrease to SJG’s Energy Efficiency Tracker (EET), which recovers the cost of, and an allowed return on, investments in Energy Efficiency Programs (EEP). SJG’s original EEPs and its first EEP Extension, approved by the BPU in 2009 and 2013, respectively, ended in July 2013 and August 2015, respectively. The revenue requirements associated with these prior investments decrease over time as they are amortized and recovered. SJG is continuing to make energy efficiency investments under its most recent EEP Extension, which was approved by the BPU in August 2015, and is recovering the costs, and the allowed return on, those investments through the EET.

There have been no other significant regulatory actions or changes to SJG's rate structure since December 31, 2015. See Note 10 to the Consolidated Financial Statements in Item 8 of SJI's Annual Report on Form 10-K for the year ended December 31, 2015.

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REGULATORY ASSETS & REGULATORY LIABILITIES

3 Months Ended

Mar. 31, 2016

Regulatory Assets and Liabilities Disclosure [Abstract]

REGULATORY ASSETS & REGULATORY LIABILITIES

REGULATORY ASSETS & REGULATORY LIABILITIES:

There have been no significant changes to the nature of the Company’s regulatory assets and liabilities since December 31, 2015, which are described in Note 11 to the Consolidated Financial Statements in Item 8 of SJI’s Annual Report on Form 10-K for the year ended December 31, 2015.

Regulatory Assets consisted of the following items (in thousands):

	March 31, 2016		December 31, 2015
Environmental Remediation Costs:
Expended - Net	$	47,023	$	42,032
Liability for Future Expenditures	136,779		123,194
Deferred Asset Retirement Obligation Costs	42,515		42,430
Deferred Pension and Other Postretirement Benefit Costs	79,779		79,779
Deferred Gas Costs - Net	—		2,701
Conservation Incentive Program Receivable	19,205		2,624
Deferred Interest Rate Contracts	9,379		7,631
Energy Efficiency Tracker	—		496
Pipeline Supplier Service Charges	3,360		3,776
Pipeline Integrity Cost	4,310		4,596
AFUDC - Equity Related Deferrals	11,638		11,423
Other Regulatory Assets	2,974		2,752
Total Regulatory Assets	$	356,962	$	323,434

ENVIRONMENTAL REMEDIATION COSTS - SJG has two regulatory assets associated with environmental costs related to the cleanup of 12 sites where SJG or its predecessors previously operated gas manufacturing plants. The first asset, "Environmental Remediation Cost: Expended - Net," represents what was actually spent to clean up the sites, less recoveries through the Remediation Adjustment Clause (RAC) and insurance carriers. These costs meet the deferral requirements of GAAP, as the BPU allows SJG to recover such expenditures through the RAC. The other asset, "Environmental Remediation Cost: Liability for Future Expenditures," relates to estimated future expenditures required to complete the remediation of these sites. SJG recorded this estimated amount as a regulatory asset with the corresponding current and noncurrent liabilities on the balance sheets under the captions "Current Liabilities" and "Deferred Credits and Other Noncurrent Liabilities." The BPU allows SJG to recover the deferred costs over seven-year periods after they are spent. The increase from December 31, 2015 is a result of expenditures made during the first three months of 2016 and an increase in the expected future expenditures for remediation activities.

DEFERRED GAS COSTS - NET - See discussion under "Deferred Revenues - Net" below.

CONSERVATION INCENTIVE PROGRAM (CIP) RECEIVABLE – The CIP tracking mechanism adjusts earnings when actual usage per customer experienced during the period varies from an established baseline usage per customer. Actual usage per customer was less than the established baseline during the 2015 - 2016 winter season, and more notably, during the first three months of 2016, resulting in an increase in the receivable. This is primarily the result of extremely warm weather experienced in the region.

Regulatory Liabilities consisted of the following items (in thousands):

	March 31, 2016		December 31, 2015
Excess Plant Removal Costs	$	32,294	$	32,644
Deferred Revenues - Net	11,241		—
Societal Benefit Costs	9,454		10,197
Energy Efficiency Tracker	2,384		—
Total Regulatory Liabilities	$	55,373	$	42,841

DEFERRED REVENUES - NET - Over/under collections of gas costs are monitored through SJG's BGSS mechanism. Net under collected gas costs are classified as a regulatory asset and net over collected gas costs are classified as a regulatory liability. Derivative contracts used to hedge natural gas purchases are also included in the BGSS, subject to BPU approval. The BGSS changed from a $2.7 million regulatory asset at December 31, 2015 to a $11.2 million regulatory liability at March 31, 2016 primarily due to the gas costs recovered from customers exceeding the actual cost of the commodity. SJG typically over collects during the winter season when throughput is high and under collects during the summer season when throughput is low.

ENERGY EFFICIENCY TRACKER (EET) - This regulatory liability primarily represents energy efficiency measures installed in customer homes and businesses. The change from a $0.5 million regulatory asset at December 31, 2015 to a $2.4 million regulatory liability at March 31, 2016 is due to recoveries being greater than the cost of, and allowed return on, investments in the Energy Efficiency Programs. In February 2016, the BPU approved a $7.9 million revenue decrease to SJG’s EET (see Note 7).

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PENSION AND OTHER POSTRETIREMENT BENEFITS

3 Months Ended

Mar. 31, 2016

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

PENSION AND OTHER POSTRETIREMENT BENEFITS

PENSION AND OTHER POSTRETIREMENT BENEFITS:

For the three months ended March 31, 2016 and 2015, net periodic benefit cost related to the employee and officer pension and other postretirement benefit plans consisted of the following components (in thousands):

	Pension Benefits
	Three Months Ended March 31,
	2016			2015
Service Cost	$	1,315		$	1,443
Interest Cost	3,000			2,770
Expected Return on Plan Assets	(3,380		)	(3,699		)
Amortizations:
Prior Service Cost	53			53
Actuarial Loss	2,309			2,656
Net Periodic Benefit Cost	3,297			3,223
Capitalized Benefit Cost	(1,187		)	(1,239		)
Deferred Benefit Cost	(161		)	—
Total Net Periodic Benefit Expense	$	1,949		$	1,984

	Other Postretirement Benefits
	Three Months Ended March 31,
	2016			2015
Service Cost	$	230		$	327
Interest Cost	653			771
Expected Return on Plan Assets	(776		)	(748		)
Amortizations:
Prior Service Cost	(86		)	152
Actuarial Loss	294			384
Net Periodic Benefit Cost	315			886
Capitalized Benefit Cost	(101		)	(256		)
Total Net Periodic Benefit Expense	$	214		$	630

Capitalized benefit costs reflected in the table above relate to SJG’s construction program. Deferred benefit costs relate to SJG's deferral of incremental expense associated with the adoption of new mortality tables effective December 31, 2014 and 2015. Deferred benefit costs are expected to be recovered through rates as part of SJG's next base rate case.

SJI contributed $15.0 million to the pension plans in January 2015. No contributions were made to the pension plans during the three months ended March 31, 2016. SJI does not expect to make any contributions to the pension plans in 2016; however, changes in future investment performance and discount rates may ultimately result in a contribution. Payments related to the unfunded supplemental executive retirement plan (SERP) are expected to approximate $2.3 million in 2016. SJG also has a regulatory obligation to contribute approximately $3.6 million annually to the other postretirement benefit plans’ trusts, less direct costs incurred.

See Note 12 to the Consolidated Financial Statements in Item 8 of SJI’s Annual Report on Form 10-K for the year ended December 31, 2015, for additional information related to SJI’s pension and other postretirement benefits.

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LINES OF CREDIT

3 Months Ended

Mar. 31, 2016

Line of Credit Facility [Abstract]

LINES OF CREDIT

LINES OF CREDIT:

Credit facilities and available liquidity as of March 31, 2016 were as follows (in thousands):

Company	Total Facility		Usage			Available Liquidity		Expiration Date
SJG:
Commercial Paper Program/Revolving Credit Facility	$	200,000	$	66,900	(A)	$	133,100	May 2018
Uncommitted Bank Lines	10,000		—			10,000		August 2016
Total SJG	210,000		66,900			143,100
SJI:
Revolving Credit Facility	400,000		278,000		(B)	122,000		February 2018
Total SJI	400,000		278,000			122,000
Total	$	610,000	$	344,900		$	265,100

(A) Includes letters of credit outstanding in the amount of $2.1 million.

(B) Includes letters of credit outstanding in the amount of $3.3 million.

The SJG facilities are restricted as to use and availability specifically to SJG; however, if necessary, the SJI facilities can also be used to support SJG’s liquidity needs. Borrowings under these credit facilities are at market rates. The weighted average interest rate on these borrowings, which changes daily, was 1.34% and 0.88% at March 31, 2016 and 2015, respectively. Average borrowings outstanding under these credit facilities, not including letters of credit, during the three months ended March 31, 2016 and 2015 were $394.6 million and $274.1 million, respectively. The maximum amounts outstanding under these credit facilities, not including letters of credit, during the three months ended March 31, 2016 and 2015 were $467.7 million and $329.4 million, respectively.

The SJI and SJG facilities are provided by a syndicate of banks and contain one financial covenant limiting the ratio of indebtedness to total capitalization (as defined in the respective credit agreements) to not more than 0.65 to 1, measured at the end of each fiscal quarter. SJI and SJG were in compliance with this covenant as of March 31, 2016.

SJG has a commercial paper program under which SJG may issue short-term, unsecured promissory notes to qualified investors up to a maximum aggregate amount outstanding at any time of $200.0 million.  The notes have fixed maturities which vary by note, but may not exceed 270 days from the date of issue. Proceeds from the notes are used for general corporate purposes.  SJG uses the commercial paper program in tandem with its $200.0 million revolving credit facility and does not expect the principal amount of borrowings outstanding under the commercial paper program and the credit facility at any time to exceed an aggregate of $200.0 million.

In March 2016, the Company entered into amendments to three separate letter of credit reimbursement agreements in connection with letters of credit that were set to expire on March 15, 2016. The letters of credit are in the aggregate amount of $62.3 million and support three outstanding series of bonds issued by Marina, in the amounts of $16.4 million, $20.0 million and $25.0 million. Each of the three amendments was entered into in connection with the extension of its respective letter of credit until March 15, 2018, and each amendment provides for the Company to reimburse the issuing bank for any draws under the related letter of credit.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES:

GUARANTEES — As part of the Transaction involving the Energenic projects (see Note 3), the Company is relieved of any guarantees from prior periods related to the projects in which it no longer has an ownership interest.

As of March 31, 2016, SJI had issued $6.2 million of parental guarantees on behalf of an unconsolidated subsidiary. These guarantees generally expire within the next two years and were issued to enable our subsidiary to market retail natural gas.

COLLECTIVE BARGAINING AGREEMENTS— Unionized personnel represent approximately 45% of our workforce at March 31, 2016. The Company has collective bargaining agreements with two unions that represent these employees: the International Brotherhood of Electrical Workers (IBEW) Local 1293 and the International Association of Machinists and Aerospace Workers (IAM) Local 76.  SJG and SJESP employees represented by the IBEW operate under collective bargaining agreements that run through February 2017. The remaining unionized employees are represented by the IAM and operate under collective bargaining agreements that run through August 2017.

STANDBY LETTERS OF CREDIT — As of March 31, 2016, SJI provided $3.3 million of standby letters of credit through its revolving credit facility to enable SJE to market retail electricity and for various construction and operating activities. SJG provided a $2.1 million letter of credit under its revolving credit facility to support the remediation of environmental conditions at certain locations in SJG's service territory. The Company has also provided $87.5 million of additional letters of credit under separate facilities outside of the revolving credit facilities to support variable-rate demand bonds issued through the New Jersey Economic Development Authority (NJEDA) to finance the expansion of SJG’s natural gas distribution system and to finance Marina's initial thermal plant project.

PENDING LITIGATION — The Company is subject to claims arising in the ordinary course of business and other legal proceedings. The Company has been named in, among other actions, certain gas supply and capacity management contract disputes and certain product liability claims related to our former sand mining subsidiary. We accrue liabilities related to these claims when we can reasonably estimate the amount or range of amounts of probable settlement costs or other charges for these claims. The Company has accrued approximately $3.3 million and $3.2 million related to all claims in the aggregate as of March 31, 2016 and December 31, 2015, respectively. Management does not believe that it is reasonably possible that there will be a material change in the Company's estimated liability in the near term and does not currently anticipate the disposition of any known claims that would have a material effect on the Company's financial position, results of operations or cash flows.

ENVIRONMENTAL REMEDIATION COSTS — SJI incurred and recorded costs for environmental cleanup of 12 sites where SJG or its predecessors operated gas manufacturing plants. SJG stopped manufacturing gas in the 1950s. SJI and some of its nonutility subsidiaries also recorded costs for environmental cleanup of sites where SJF previously operated a fuel oil business and Morie maintained equipment, fueling stations and storage. There have been no changes to the status of the Company’s environmental remediation efforts since December 31, 2015, as described in Note 15 to the Consolidated Financial Statements in Item 8 of SJI’s Annual Report on Form 10-K for the year ended December 31, 2015.

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DERIVATIVE INSTRUMENTS

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS:

Certain SJI subsidiaries are involved in buying, selling, transporting and storing natural gas and buying and selling retail electricity for their own accounts as well as managing these activities for third parties. These subsidiaries are subject to market risk on expected future purchases and sales due to commodity price fluctuations. The Company uses a variety of derivative instruments to limit this exposure to market risk in accordance with strict corporate guidelines.  These derivative instruments include forward contracts, swap agreements, options contracts and futures contracts. As of March 31, 2016, the Company had outstanding derivative contracts intended to limit the exposure to market risk on 71.9 MMdts (1 MMdts = one million decatherms) of expected future purchases of natural gas, 59.2 MMdts of expected future sales of natural gas, 2.6 MMmwh (1 MMmwh = one million megawatt hours) of expected future purchases of electricity and 2.4 MMmwh of expected future sales of electricity. In addition to these derivative contracts, the Company has basis and index related purchase and sales contracts totaling 169.6 MMdts.  These contracts, which have not been designated as hedging instruments under GAAP, are measured at fair value and recorded in Derivatives - Energy Related Assets or Derivatives - Energy Related Liabilities on the condensed consolidated balance sheets. The net unrealized pre-tax gains and losses for these energy-related commodity contracts are included with realized gains and losses in Operating Revenues – Nonutility.

The Company has also entered into interest rate derivatives to hedge exposure to increasing interest rates and the impact of those rates on cash flows of variable-rate debt. These interest rate derivatives, some of which had been designated as hedging instruments under GAAP, are measured at fair value and recorded in Derivatives - Other on the condensed consolidated balance sheets. Hedge accounting has been discontinued for these derivatives. As a result, unrealized gains and losses on these derivatives, that were previously included in Accumulated Other Comprehensive Loss (AOCL) on the condensed consolidated balance sheets, are being recorded in earnings over the remaining life of the derivative. These derivatives are expected to mature in 2026.

As of March 31, 2016, SJI’s active interest rate swaps were as follows:

Notional Amount		Fixed Interest Rate	Start Date	Maturity	Type	Obligor
$	14,500,000	3.905%	3/17/2006	1/15/2026	Tax-exempt	Marina
$	500,000	3.905%	3/17/2006	1/15/2026	Tax-exempt	Marina
$	330,000	3.905%	3/17/2006	1/15/2026	Tax-exempt	Marina
$	12,500,000	3.530%	12/1/2006	2/1/2036	Tax-exempt	SJG
$	12,500,000	3.430%	12/1/2006	2/1/2036	Tax-exempt	SJG

The fair values of all derivative instruments, as reflected in the condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015, are as follows (in thousands):

Derivatives not designated as hedging instruments under GAAP	March 31, 2016				December 31, 2015
	Assets		Liabilities		Assets		Liabilities
Energy-related commodity contracts:
Derivatives – Energy Related – Current	$	57,815	$	66,370	$	83,093	$	90,708
Derivatives – Energy Related – Non-Current	19,489		10,148		16,238		21,697
Interest rate contracts:
Derivatives - Other	—		13,118		—		10,943
Total derivatives not designated as hedging instruments under GAAP	$	77,304	$	89,636	$	99,331	$	123,348
Total Derivatives	$	77,304	$	89,636	$	99,331	$	123,348

The Company enters into derivative contracts with counterparties, some of which are subject to master netting arrangements, which allow net settlements under certain conditions. The Company presents derivatives at gross fair values on the condensed consolidated balance sheets. As of March 31, 2016 and December 31, 2015, information related to these offsetting arrangements were as follows (in thousands):

As of March 31, 2016
Description	Gross amounts of recognized assets/liabilities			Gross amount offset in the balance sheet		Net amounts of assets/liabilities in balance sheet			Gross amounts not offset in the balance sheet						Net amount
									Financial Instruments				Cash Collateral Posted
Derivatives - Energy Related Assets	$	77,304		$	—	$	77,304		$	(15,597	)	(A)	$	—	$	61,707
Derivatives - Energy Related Liabilities	$	(76,518	)	$	—	$	(76,518	)	$	15,597		(B)	$	22,020	$	(38,901	)
Derivatives - Other	$	(13,118	)	$	—	$	(13,118	)	$	—			$	—	$	(13,118	)

As of December 31, 2015
Description	Gross amounts of recognized assets/liabilities			Gross amount offset in the balance sheet		Net amounts of assets/liabilities in balance sheet			Gross amounts not offset in the balance sheet						Net amount
									Financial Instruments				Cash Collateral Posted
Derivatives - Energy Related Assets	$	99,331		$	—	$	99,331		$	(35,491	)	(A)	$	—	$	63,840
Derivatives - Energy Related Liabilities	$	(112,405	)	$	—	$	(112,405	)	$	35,491		(B)	$	23,045	$	(53,869	)
Derivatives - Other	$	(10,943	)	$	—	$	(10,943	)	$	—			$	—	$	(10,943	)

(A) The balances at March 31, 2016 and December 31, 2015 were related to derivative liabilities which can be net settled against derivative assets.

(B) The balances at March 31, 2016 and December 31, 2015 were related to derivative assets which can be net settled against derivative liabilities.

The effect of derivative instruments on the condensed consolidated statements of income for the three months ended March 31, 2016 and 2015 are as follows (in thousands):

	Three Months Ended March 31,
Derivatives in Cash Flow Hedging Relationships under GAAP	2016			2015
Interest Rate Contracts:
Losses recognized in AOCL on effective portion	$	—		$	—
Losses reclassified from AOCL into income (a)	$	(86	)	$	(23	)
Gains (losses) recognized in income on ineffective portion (a)	$	—		$	—

(a) Included in Interest Charges

	Three Months Ended March 31,
Derivatives Not Designated as Hedging Instruments under GAAP	2016			2015
Gains (losses) on energy-related commodity contracts (a)	$	18,655		$	(6,707	)
Losses on interest rate contracts (b)	(427		)	(298		)
Total	$	18,228		$	(7,005	)

(a)  Included in Operating Revenues - Nonutility

(b)  Included in Interest Charges

Net realized loss of $2.8 million and $2.6 million associated with SJG's energy-related financial commodity contracts for the three months ended March 31, 2016 and 2015, respectively, are not included in the above table. These contracts are part of SJG’s regulated risk management activities that serve to mitigate BGSS costs passed on to its customers. As these transactions are entered into pursuant to, and recoverable through, regulatory riders, any changes in the value of SJG’s energy-related financial commodity contracts are deferred in Regulatory Assets or Liabilities, as applicable, and there is no impact to earnings.

Certain of the Company’s derivative instruments contain provisions that require immediate payment or demand immediate and ongoing collateralization on derivative instruments in net liability positions in the event of a material adverse change in the credit standing of the Company. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a liability position on March 31, 2016, is $33.6 million.  If the credit-risk-related contingent features underlying these agreements were triggered on March 31, 2016, the Company would have been required to settle the instruments immediately or post collateral to its counterparties of approximately $31.5 million after offsetting asset positions with the same counterparties under master netting arrangements.

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FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES:

GAAP establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques.  The levels of the hierarchy are described below:

• Level 1:  Observable inputs, such as quoted prices in active markets for identical assets or liabilities.

• Level 2:  Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

• Level 3:  Unobservable inputs that reflect the reporting entity’s own assumptions.

Assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and financial liabilities and their placement within the fair value hierarchy.

For financial assets and financial liabilities measured at fair value on a recurring basis, information about the fair value measurements for each major category is as follows (in thousands):

As of March 31, 2016	Total		Level 1		Level 2		Level 3
Assets
Available-for-Sale Securities (A)	$	14,960	$	2,945	$	12,015	$	—
Derivatives – Energy Related Assets (B)	77,304		7,145		15,986		54,173
	$	92,264	$	10,090	$	28,001	$	54,173
Liabilities
Derivatives – Energy Related Liabilities (B)	$	76,518	$	31,858	$	3,728	$	40,932
Derivatives – Other (C)	13,118		—		13,118		—
	$	89,636	$	31,858	$	16,846	$	40,932

As of December 31, 2015	Total		Level 1		Level 2		Level 3
Assets
Available-for-Sale Securities (A)	$	14,810	$	2,925	$	11,885	$	—
Derivatives – Energy Related Assets (B)	99,331		16,006		24,730		58,595
	$	114,141	$	18,931	$	36,615	$	58,595
Liabilities
Derivatives – Energy Related Liabilities (B)	$	112,405	$	42,170	$	11,008	$	59,227
Derivatives – Other (C)	10,943		—		10,943		—
	$	123,348	$	42,170	$	21,951	$	59,227

(A) Available-for-Sale Securities include securities that are traded in active markets and securities that are not traded publicly. The securities traded in active markets are valued using the quoted principal market close prices that are provided by the trustees and are categorized in Level 1 in the fair value hierarchy. The remaining securities consist of funds that are not publicly traded. These funds, which consist of stocks and bonds that are traded individually in active markets, are valued using quoted prices for similar assets and are categorized in Level 2 in the fair value hierarchy.

(B) Derivatives – Energy Related Assets and Liabilities are traded in both exchange-based and non-exchange-based markets. Exchange-based contracts are valued using unadjusted quoted market sources in active markets and are categorized in Level 1 in the fair value hierarchy. Certain non-exchange-based contracts are valued using indicative price quotations available through brokers or over-the-counter, on-line exchanges and are categorized in Level 2. These price quotations reflect the average of the bid-ask mid-point prices and are obtained from sources that management believes provide the most liquid market. For non-exchange-based derivatives that trade in less liquid markets with limited pricing information, model inputs generally would include both observable and unobservable inputs. In instances where observable data is unavailable, management considers the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks such as liquidity, volatility and contract duration. Such instruments are categorized in Level 3 as the model inputs generally are not observable.

Significant Unobservable Inputs - Management uses the discounted cash flow model to value Level 3 physical and financial forwards, which calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return and credit spreads. Inputs to the valuation model are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third party pricing sources. The validity of the mark-to-market valuations and changes in mark-to-market valuations from period to period are examined and qualified against historical expectations by the risk management function. If any discrepancies are identified during this process, the mark-to-market valuations or the market pricing information is evaluated further and adjusted, if necessary.

Level 3 valuation methods for natural gas derivative contracts include utilizing another location in close proximity adjusted for certain pipeline charges to derive a basis value. The significant unobservable inputs used in the fair value measurement of certain natural gas contracts consist of forward prices developed based on industry-standard methodologies. Significant increases (decreases) in these forward prices for purchases of natural gas would result in a directionally similar impact to the fair value measurement and for sales of natural gas would result in a directionally opposite impact to the fair value measurement. Level 3 valuation methods for electric represent the value of the contract marked to the forward wholesale curve, as provided by daily exchange quotes for delivered electricity. The significant unobservable inputs used in the fair value measurement of electric contracts consist of fixed contracted electric load profiles; therefore, no change in unobservable inputs would occur. Unobservable inputs are updated daily using industry-standard techniques. Management reviews and corroborates the price quotations to ensure the prices are observable which includes consideration of actual transaction volumes, market delivery points, bid-ask spreads and contract duration.

(C) Derivatives – Other are valued using quoted prices on commonly quoted intervals, which are interpolated for periods different than the quoted intervals, as inputs to a market valuation model. Market inputs can generally be verified and model selection does not involve significant management judgment.

The following table provides quantitative information regarding significant unobservable inputs in Level 3 fair value measurements (in thousands):

Type	Fair Value at March 31, 2016		Valuation Technique	Significant Unobservable Input	Range [Weighted Average]
	Assets	Liabilities
Forward Contract - Natural Gas	$27,715	$15,874	Discounted Cash Flow	Forward price (per dt)	$1.03 - $8.92 [$1.93]	(A)
Forward Contract - Electric	$26,458	$25,058	Discounted Cash Flow	Fixed electric load profile (on-peak)	8.47% - 100.00% [56.83%]	(B)
				Fixed electric load profile (off-peak)	0.00% - 91.53% [43.17%]	(B)

Type	Fair Value at December 31, 2015		Valuation Technique	Significant Unobservable Input	Range [Weighted Average]
	Assets	Liabilities
Forward Contract - Natural Gas	$29,459	$31,733	Discounted Cash Flow	Forward price (per dt)	$(0.77) - $10.00 [$(2.15)]	(A)
Forward Contract - Electric	$29,136	$27,494	Discounted Cash Flow	Fixed electric load profile (on-peak)	8.47% - 100.00% [56.20%]	(B)
				Fixed electric load profile (off-peak)	0.00% - 91.53% [43.80%]	(B)

(A) Represents the range, along with the weighted average, of forward prices for the sale and purchase of natural gas.

(B) Represents the range, along with the weighted average, of the percentage of contracted usage that is loaded during on-peak hours versus off-peak.

The changes in fair value measurements of Derivatives – Energy Related Assets and Liabilities for the three months ended March 31, 2016 and 2015, using significant unobservable inputs (Level 3), are as follows (in thousands):

	Three Months Ended March 31, 2016			Three Months Ended March 31, 2015
Balance at beginning of period	$	(632	)	$	(5,608	)
Other changes in fair value from continuing and new contracts, net	10,015			(16,438		)
Settlements	3,858			4,735
Balance at end of period	$	13,241		$	(17,311	)

Total gains included in earnings for the three months ended March 31, 2016 that are attributable to the change in unrealized gains relating to those assets and liabilities included in Level 3 still held as of March 31, 2016, are $10.0 million.  These gains are included in Operating Revenues-Nonutility on the condensed consolidated statements of income.

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LONG-TERM DEBT

3 Months Ended

Mar. 31, 2016

Long-term Debt, Unclassified [Abstract]

LONG-TERM DEBT

LONG-TERM DEBT:

In January 2016, the Company paid $12.7 million to retire outstanding debt for ACB.

In January 2016, SJG issued $61.0 million of long-term debt at an average interest rate of 1.37% under a $200.0 million aggregate syndicated bank term facility. The facility is now fully drawn. The total outstanding amount under this facility as of March 31, 2016 is $200.0 million.

The Company did not issue or retire any other long-term debt during the three months ended March 31, 2016.

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ACCUMULATED OTHER COMPREHENSIVE LOSS

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE LOSS

ACCUMULATED OTHER COMPREHENSIVE LOSS:

The following tables summarize the changes in accumulated other comprehensive loss (AOCL) for the three months ended March 31, 2016 (in thousands):

	Postretirement Liability Adjustment			Unrealized Gain (Loss) on Derivatives-Other			Unrealized Gain (Loss) on Available-for-Sale Securities			Other Comprehensive Income (Loss) of Affiliated Companies			Total
Balance at January 1, 2016 (a)	$	(22,145	)	$	(2,129	)	$	(128	)	$	(97	)	$	(24,499	)
Other comprehensive loss before reclassifications	—			—			63			—			63
Amounts reclassified from AOCL (b)	—			51			(14		)	—			37
Net current period other comprehensive income (loss)	—			51			49			—			100
Balance at March 31, 2016 (a)	$	(22,145	)	$	(2,078	)	$	(79	)	$	(97	)	$	(24,399	)

(a) Determined using a combined average statutory tax rate of 40%.

(b) See table below.

The following table provides details about reclassifications out of AOCL for the three months ended March 31, 2016:

	Amounts Reclassified from AOCL (in thousands)			Affected Line Item in the Condensed Consolidated Statements of Income
	Three Months Ended March 31, 2016
Unrealized Gain on Derivatives-Other - interest rate contracts designated as cash flow hedges	$	86		Interest Charges
Income Taxes	(35		)	Income Taxes (a)
	$	51
Unrealized Loss on Available-for-Sale Securities	$	(25	)	Other Income
Income Taxes	11			Income Taxes (a)
	$	(14	)
Losses from reclassifications for the period net of tax	$	37

(a) Determined using a combined average statutory tax rate of 40%.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

GENERAL

GENERAL - South Jersey Industries, Inc. (SJI or the Company) currently provides a variety of energy-related products and services primarily through the following wholly-owned subsidiaries:

▪ South Jersey Gas Company (SJG) is a regulated natural gas utility. SJG distributes natural gas in the seven southernmost counties of New Jersey.

▪ South Jersey Energy Company (SJE) acquires and markets natural gas and electricity to retail end users and provides total energy management services to commercial, industrial and residential customers.

▪ South Jersey Resources Group, LLC (SJRG) markets natural gas storage, commodity and transportation assets along with fuel management services on a wholesale basis in the mid-Atlantic, Appalachian and southern states.

▪ South Jersey Exploration, LLC (SJEX) owns oil, gas and mineral rights in the Marcellus Shale region of Pennsylvania.

▪ Marina Energy, LLC (Marina) develops and operates on-site energy-related projects. The following entities are wholly-owned subsidiaries of Marina as of December 31, 2015 (see Note 3):

•ACB Energy Partners, LLC (ACB) owns and operates a natural gas fueled combined heating, cooling and power facility located in Atlantic City, New Jersey.

•AC Landfill Energy. LLC (ACLE), BC Landfill Energy, LLC (BCLE), SC Landfill Energy, LLC (SCLE) and SX Landfill Energy, LLC (SXLE) own and operate landfill gas-fired electric production facilities in Atlantic, Burlington, Salem and Sussex Counties located in New Jersey.

•MCS Energy Partners, LLC (MCS), NBS Energy Partners, LLC (NBS) and SBS Energy Partners, LLC (SBS) own and operate solar-generation sites located in New Jersey.

▪ South Jersey Energy Service Plus, LLC (SJESP) services residential and small commercial HVAC systems, installs small commercial HVAC systems, provides plumbing services and services appliances under warranty via a subcontractor arrangement as well as on a time and materials basis.

▪ SJI Midstream, LLC was formed in 2014 to invest in infrastructure and other midstream projects, including a current project to build a 100-mile natural gas pipeline in Pennsylvania and New Jersey.

BASIS OF PRESENTATION

BASIS OF PRESENTATION — The condensed consolidated financial statements include the accounts of SJI, its wholly-owned subsidiaries and subsidiaries in which SJI has a controlling interest. SJI eliminates all significant intercompany accounts and transactions. In management’s opinion, the condensed consolidated financial statements reflect all normal and recurring adjustments needed to fairly present SJI’s financial position, operating results and cash flows at the dates and for the periods presented. SJI’s businesses are subject to seasonal fluctuations and, accordingly, this interim financial information should not be the basis for estimating the full year’s operating results. As permitted by the rules and regulations of the Securities and Exchange Commission (SEC), the accompanying unaudited condensed consolidated financial statements contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). These financial statements should be read in conjunction with SJI’s 2015 Annual Report on Form 10-K for a more complete discussion of the Company’s accounting policies and certain other information.

RECLASSIFICATIONS

Certain reclassifications have been made to the prior period's condensed consolidated balance sheets, as well as the prior period long-term debt carrying value and prior period's segment disclosures in Notes 5 and 6, respectively, to conform to the current period presentation. The unamortized debt issuance costs previously included in "Regulatory and Other Noncurrent Assets" on the condensed consolidated balance sheets were reclassified to Long-Term Debt to conform to ASU 2015-03, which is described below under "New Accounting Pronouncements." This reclassification caused the prior period long-term debt carrying value in Note 5 to be adjusted, along with the prior period unamortized debt issuance costs recorded as Identifiable Assets in the Gas Utility Operations, On-Site Energy Production and Corporate and Services segments in Note 6 to be removed.

REVENUE AND THROUGHPUT-BASED TAXES

REVENUE AND THROUGHPUT-BASED TAXES — SJG collects certain revenue-based energy taxes from its customers. Such taxes include New Jersey State Sales Tax and Public Utilities Assessment (PUA). State sales tax is recorded as a liability when billed to customers and is not included in revenue or operating expenses.

IMPAIRMENT OF LONG-LIVED ASSETS

IMPAIRMENT OF LONG-LIVED ASSETS - SJI reviews the carrying amount of long-lived assets for possible impairment whenever events or changes in circumstances indicate that such amounts may not be recoverable.

GAS EXPLORATION AND DEVELOPMENT

GAS EXPLORATION AND DEVELOPMENT - The Company capitalizes all costs associated with gas property acquisition, exploration and development activities under the full cost method of accounting. Capitalized costs include costs related to unproved properties, which are not amortized until proved reserves are found or it is determined that the unproved properties are impaired. All costs related to unproved properties are reviewed quarterly to determine if impairment has occurred.

TREASURY STOCK

TREASURY STOCK – SJI uses the par value method of accounting for treasury stock.

INCOME TAXES

INCOME TAXES — Deferred income taxes are provided for all significant temporary differences between the book and taxable bases of assets and liabilities in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740 - “Income Taxes”.  A valuation allowance is established when it is determined that it is more likely than not that a deferred tax asset will not be realized. Investment tax credits related to renewable energy facilities of Marina are recognized on the flow-through method, which may result in variations in the customary relationship between income taxes and pre-tax income for interim periods.

GOODWILL

GOODWILL - Goodwill was acquired as part of the acquisition of Energenic projects discussed in Note 3 and is a part of the on-site energy production segment. Goodwill represents the excess of the consideration paid over the fair value of identifiable net assets acquired. Goodwill is not amortized, but instead is subject to impairment testing on an annual basis, and between annual tests whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying amount. No such events have occurred during the three months ended March 31, 2016.

NEW ACCOUNTING PRONOUNCEMENTS

NEW ACCOUNTING PRONOUNCEMENTS — Other than as described below, no new accounting pronouncement issued or effective during 2016 or 2015 had, or is expected to have, a material impact on the condensed consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU supersedes the revenue recognition requirements in FASB ASC 605, Revenue Recognition, and in most industry-specific topics. The new guidance identifies how and when entities should recognize revenue. The new rules establish a core principle requiring the recognition of revenue to depict the transfer of promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40); Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. The new guidance requires management of a company to evaluate whether there is substantial doubt about the company's ability to continue as a going concern. This ASU is effective for the annual reporting period ending after December 15, 2016, and for interim and annual reporting periods thereafter, with early adoption permitted. The Company does not expect this standard to have an impact on its consolidated financial statements upon adoption.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis, which changes the analysis to be performed in determining whether certain types of legal entities should be consolidated. Specifically, the standard amends the evaluation of whether (a) fees paid to a decision maker or a service provider represent a variable interest, (b) a limited partnership or similar entity has the characteristics of a Variable Interest Entity ("VIE") and (c) a reporting entity is the primary beneficiary of a VIE. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015, with early adoption permitted. Adoption of this guidance did not have an impact on the Company's financial statement results.

In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This ASU requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Adoption of this guidance did not have an impact on the Company's results of operations; however, balance sheet presentations were modified to conform to this guidance.

Also in April 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40). This ASU provides guidance to customers (a) in determining whether a cloud computing arrangement includes a software license, and (b) on how the arrangement should be accounted for, depending on whether or not it includes a software license. The amended guidance is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Adoption of this guidance did not have an impact on the Company's financial statement results.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. This ASU states that inventory for which cost is determined using a method other than last-in, first-out (LIFO) or the retail method should be subsequently measured at the lower of cost or net realizable value (NRV), rather than at the lower of cost or market. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In August 2015, the FASB issued ASU 2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. This ASU states that, given the absence of authoritative guidance for debt issuance costs related to line-of-credit arrangements within ASU 2015-03 (discussed above), the SEC staff would not object to an entity deferring and presenting such costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of credit arrangement. The adoption of this standard did not have an impact on the Company's financial statement results.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which enhances the reporting model for financial instruments and includes amendments to address aspects of recognition, measurement, presentation and disclosure. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted for only certain portions of the new guidance. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In March 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The new standard requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The new standard also will result in enhanced quantitative and qualitative disclosures, including significant judgments made by management, to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing leases. The accounting for leases by the lessor remains relatively the same. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships. The amendments in this guidance clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016, with early adoption permitted. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In March 2016, the FASB issued ASU 2016-07, Investments- Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting, which eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016, with early adoption permitted. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This standard amends ASU 2014-09 (discussed above), to improve the implementation guidance on principal versus agent considerations and whether an entity reports revenue on a gross or net basis. This standard will have the same effective date and transition requirements as ASU 2014-09. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies various aspects of accounting for share-based payment arrangements. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016, with early adoption permitted. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. This standard amends ASU 2014-09 (discussed above), to clarify identifying performance obligations and the licensing implementation guidance. This standard will have the same effective date and transition requirements as ASU 2014-09. Management is currently determining the impact that adoption of this guidance will have on the Company's financial statement results.

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES:

GAAP establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques.  The levels of the hierarchy are described below:

• Level 1:  Observable inputs, such as quoted prices in active markets for identical assets or liabilities.

• Level 2:  Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

• Level 3:  Unobservable inputs that reflect the reporting entity’s own assumptions.

Assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and financial liabilities and their placement within the fair value hierarchy.

(A) Available-for-Sale Securities include securities that are traded in active markets and securities that are not traded publicly. The securities traded in active markets are valued using the quoted principal market close prices that are provided by the trustees and are categorized in Level 1 in the fair value hierarchy. The remaining securities consist of funds that are not publicly traded. These funds, which consist of stocks and bonds that are traded individually in active markets, are valued using quoted prices for similar assets and are categorized in Level 2 in the fair value hierarchy.

(B) Derivatives – Energy Related Assets and Liabilities are traded in both exchange-based and non-exchange-based markets. Exchange-based contracts are valued using unadjusted quoted market sources in active markets and are categorized in Level 1 in the fair value hierarchy. Certain non-exchange-based contracts are valued using indicative price quotations available through brokers or over-the-counter, on-line exchanges and are categorized in Level 2. These price quotations reflect the average of the bid-ask mid-point prices and are obtained from sources that management believes provide the most liquid market. For non-exchange-based derivatives that trade in less liquid markets with limited pricing information, model inputs generally would include both observable and unobservable inputs. In instances where observable data is unavailable, management considers the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks such as liquidity, volatility and contract duration. Such instruments are categorized in Level 3 as the model inputs generally are not observable.

Significant Unobservable Inputs - Management uses the discounted cash flow model to value Level 3 physical and financial forwards, which calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return and credit spreads. Inputs to the valuation model are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third party pricing sources. The validity of the mark-to-market valuations and changes in mark-to-market valuations from period to period are examined and qualified against historical expectations by the risk management function. If any discrepancies are identified during this process, the mark-to-market valuations or the market pricing information is evaluated further and adjusted, if necessary.

Level 3 valuation methods for natural gas derivative contracts include utilizing another location in close proximity adjusted for certain pipeline charges to derive a basis value. The significant unobservable inputs used in the fair value measurement of certain natural gas contracts consist of forward prices developed based on industry-standard methodologies. Significant increases (decreases) in these forward prices for purchases of natural gas would result in a directionally similar impact to the fair value measurement and for sales of natural gas would result in a directionally opposite impact to the fair value measurement. Level 3 valuation methods for electric represent the value of the contract marked to the forward wholesale curve, as provided by daily exchange quotes for delivered electricity. The significant unobservable inputs used in the fair value measurement of electric contracts consist of fixed contracted electric load profiles; therefore, no change in unobservable inputs would occur. Unobservable inputs are updated daily using industry-standard techniques. Management reviews and corroborates the price quotations to ensure the prices are observable which includes consideration of actual transaction volumes, market delivery points, bid-ask spreads and contract duration.

(C) Derivatives – Other are valued using quoted prices on commonly quoted intervals, which are interpolated for periods different than the quoted intervals, as inputs to a market valuation model. Market inputs can generally be verified and model selection does not involve significant management judgment.

FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES:

GAAP establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques.  The levels of the hierarchy are described below:

• Level 1:  Observable inputs, such as quoted prices in active markets for identical assets or liabilities.

• Level 2:  Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

• Level 3:  Unobservable inputs that reflect the reporting entity’s own assumptions.

Assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and financial liabilities and their placement within the fair value hierarchy.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Schedule of Changes in Goodwill

The following table summarizes the changes in Goodwill for the three months ended March 31, 2016 (in thousands):

	2016
Beginning Balance, January 1	$	8,880
Fair Value Adjustments During Measurement Periods (See Note 3)	(741		)
Ending Balance, March 31	$	8,139

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STOCK-BASED COMPENSATION PLAN (Tables)

3 Months Ended

Mar. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of the nonvested restricted stock awards outstanding and the assumptions used to estimate the fair value of the awards

The following table summarizes the nonvested restricted stock awards outstanding at March 31, 2016 and the assumptions used to estimate the fair value of the awards:

	Grants	Shares Outstanding	Fair Value Per Share		Expected Volatility		Risk-Free Interest Rate
Officers & Key Employees -	2014 - TSR	51,042	$	21.31	20.0	%	0.80	%
	2014 - EPS	51,042	$	27.22	N/A		N/A
	2015 - TSR	34,406	$	26.31	16.0	%	1.10	%
	2015 - EPS, ROE, Time	75,300	$	29.47	N/A		N/A
	2016 - TSR	67,466	$	22.01	18.1	%	1.31	%
	2016 - EE, Time	125,294	$	23.52	N/A		N/A
Directors -	2016	32,882	$	23.52	N/A		N/A

Summary of the total stock-based compensation cost for the period

The following table summarizes the total stock-based compensation cost for the three months ended March 31, 2016 and 2015 (in thousands):

	Three Months Ended March 31,
	2016			2015
Officers & Key Employees	$	817		$	799
Directors	193			186
Total Cost	1,010			985
Capitalized	(106		)	(91		)
Net Expense	$	904		$	894

Summary of information regarding restricted stock award activity during the period excluding accrued dividend equivalents

The following table summarizes information regarding restricted stock award activity during the three months ended March 31, 2016, excluding accrued dividend equivalents:

	Officers &Other Key Employees		Directors		Weighted Average Fair Value
Nonvested Shares Outstanding, January 1, 2016	226,191		26,338		$	26.89
Granted	192,760		32,882		$	23.07
Cancelled/Forfeited	(1,154	)	—		$	26.24
Vested	(13,247	)	(26,338	)	$	29.30
Nonvested Shares Outstanding, March 31, 2016	404,550		32,882		$	24.70

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AFFILIATIONS AND DISCONTINUED OPERATIONS (Tables)

3 Months Ended

Mar. 31, 2016

Business Combinations [Abstract]

Schedule of the fair value of the assets acquired and the liabilities assumed

The following table summarizes the preliminary purchase price allocation and reflects 100% of the fair values of the assets acquired and the liabilities assumed by the Company in connection with the Transaction. The Company is still awaiting final valuation reports supporting the allocation of the purchase price to certain identifiable intangibles. Total consideration for the step acquisition of the remaining interest in the Marina Projects was $46.0 million, which represents the fair value of the Company’s interest in the Partner Projects exchanged ($31.5 million) as well as the existing value of the Marina Projects immediately prior to the exchange ($14.5 million) (in thousands):

Current assets (excluding inventory)	$	7,804
Inventory	3,154
Note Receivable Received	19,504
Fixed Assets	41,190
Intangible Assets:
Identifiable Intangibles	22,220
Goodwill	8,139
Non-Current Assets	1,873
Current Liabilities	(8,196		)
Note Payable - Affiliate	(16,986		)
Long-Term Debt, including current portion	(21,642		)
Capital Lease Payable	(10,458		)
Other Non-Current Liabilities	(572		)
Fair Value of Consolidated Assets and Liabilities of Acquired Projects	$	46,030

Summary of operating results of discontinued operations

Summarized operating results of the discontinued operations for the three months endedMarch 31, 2016 and 2015, were (in thousands, except per share amounts):

	Three Months Ended March 31,
	2016			2015
Loss before Income Taxes:
Sand Mining	$	(146	)	$	(347	)
Fuel Oil	(35		)	(66		)
Income Tax Benefits	63			137
Loss from Discontinued Operations — Net	$	(118	)	$	(276	)
Earnings Per Common Share from
Discontinued Operations — Net:
Basic and Diluted	$	—		$	—

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COMMON STOCK (Tables)

3 Months Ended

Mar. 31, 2016

Common Stock [Abstract]

Common stock shares issued and outstanding

The following shares were issued and outstanding:

	2016
Beginning Balance, January 1	70,965,622
New Issues During the Period:
Dividend Reinvestment Plan	229,522
Stock-Based Compensation Plan	43,023
Ending Balance, March 31	71,238,167

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SEGMENTS OF BUSINESS (Tables)

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segments of Business

Information about SJI’s operations in different reportable operating segments is presented below (in thousands):

	Three Months Ended March 31,
	2016			2015
Operating Revenues:
Gas Utility Operations	$	187,766		$	267,658
Energy Group:
Wholesale Energy Operations	65,074			35,345
Retail Gas and Other Operations	29,733			38,078
Retail Electric Operations	39,491			29,777
Subtotal Energy Group	134,298			103,200
Energy Services:
On-Site Energy Production	16,321			13,572
Appliance Service Operations	1,888			2,357
Subtotal Energy Services	18,209			15,929
Corporate and Services	8,876			9,086
Subtotal	349,149			395,873
Intersegment Sales	(16,114		)	(12,921		)
Total Operating Revenues	$	333,035		$	382,952

	Three Months Ended March 31,
	2016			2015
Operating Income:
Gas Utility Operations	$	75,773		$	73,189
Energy Group:
Wholesale Energy Operations	38,244			330
Retail Gas and Other Operations	(759		)	3,087
Retail Electric Operations	585			(182		)
Subtotal Energy Group	38,070			3,235
Energy Services:
On-Site Energy Production	(89		)	(482		)
Appliance Service Operations	44			(52		)
Subtotal Energy Services	(45		)	(534		)
Corporate and Services	455			481
Total Operating Income	$	114,253		$	76,371
Depreciation and Amortization:
Gas Utility Operations	$	15,626		$	14,167
Energy Group:
Wholesale Energy Operations	204			32
Retail Gas and Other Operations	85			20
Subtotal Energy Group	289			52
Energy Services:
On-Site Energy Production	9,919			7,051
Appliance Service Operations	84			74
Subtotal Energy Services	10,003			7,125
Corporate and Services	223			242
Total Depreciation and Amortization	$	26,141		$	21,586
Interest Charges:
Gas Utility Operations	$	4,787		$	5,190
Energy Group:
Wholesale Energy Operations	64			242
Retail Gas and Other Operations	132			73
Subtotal Energy Group	196			315
Energy Services:
On-Site Energy Production	3,462			2,315
Corporate and Services	3,452			2,988
Subtotal	11,897			10,808
Intersegment Borrowings	(2,737		)	(2,207		)
Total Interest Charges	$	9,160		$	8,601

	Three Months Ended March 31,
	2016			2015
Income Taxes:
Gas Utility Operations	$	27,404		$	26,172
Energy Group:
Wholesale Energy Operations	14,737			867
Retail Gas and Other Operations	(168		)	1,576
Retail Electric Operations	239			(74		)
Subtotal Energy Group	14,808			2,369
Energy Services:
On-Site Energy Production	(3,012		)	(12,047		)
Appliance Service Operations	26			(8		)
Subtotal Energy Services	(2,986		)	(12,055		)
Corporate and Services	41			127
Total Income Taxes	$	39,267		$	16,613
Property Additions:
Gas Utility Operations	$	51,370		$	43,326
Energy Group:
Wholesale Energy Operations	6			4
Retail Gas and Other Operations	371			729
Subtotal Energy Group	377			733
Energy Services:
On-Site Energy Production	2,651			4,381
Appliance Service Operations	101			116
Subtotal Energy Services	2,752			4,497
Corporate and Services	163			1,064
Total Property Additions	$	54,662		$	49,620

	March 31, 2016			December 31, 2015
Identifiable Assets (See Note 1):
Gas Utility Operations	$	2,365,728		$	2,281,576
Energy Group:
Wholesale Energy Operations	174,326			231,660
Retail Gas and Other Operations	60,178			55,111
Retail Electric Operations	51,239			55,528
Subtotal Energy Group	285,743			342,299
Energy Services:
On-Site Energy Production	784,474			790,231
Appliance Service Operations	3,849			4,885
Subtotal Energy Services	788,323			795,116
Discontinued Operations	1,542			1,545
Corporate and Services	648,213			652,325
Intersegment Assets	(595,565		)	(600,928		)
Total Identifiable Assets	$	3,493,984		$	3,471,933

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REGULATORY ASSETS & REGULATORY LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2016

Regulatory Assets and Liabilities Disclosure [Abstract]

Schedule of Regulatory Assets

Regulatory Assets consisted of the following items (in thousands):

	March 31, 2016		December 31, 2015
Environmental Remediation Costs:
Expended - Net	$	47,023	$	42,032
Liability for Future Expenditures	136,779		123,194
Deferred Asset Retirement Obligation Costs	42,515		42,430
Deferred Pension and Other Postretirement Benefit Costs	79,779		79,779
Deferred Gas Costs - Net	—		2,701
Conservation Incentive Program Receivable	19,205		2,624
Deferred Interest Rate Contracts	9,379		7,631
Energy Efficiency Tracker	—		496
Pipeline Supplier Service Charges	3,360		3,776
Pipeline Integrity Cost	4,310		4,596
AFUDC - Equity Related Deferrals	11,638		11,423
Other Regulatory Assets	2,974		2,752
Total Regulatory Assets	$	356,962	$	323,434

Schedule of Regulatory Liabilities

Regulatory Liabilities consisted of the following items (in thousands):

	March 31, 2016		December 31, 2015
Excess Plant Removal Costs	$	32,294	$	32,644
Deferred Revenues - Net	11,241		—
Societal Benefit Costs	9,454		10,197
Energy Efficiency Tracker	2,384		—
Total Regulatory Liabilities	$	55,373	$	42,841

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PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables)

3 Months Ended

Mar. 31, 2016

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Schedule of defined benefit plans disclosures

For the three months ended March 31, 2016 and 2015, net periodic benefit cost related to the employee and officer pension and other postretirement benefit plans consisted of the following components (in thousands):

	Pension Benefits
	Three Months Ended March 31,
	2016			2015
Service Cost	$	1,315		$	1,443
Interest Cost	3,000			2,770
Expected Return on Plan Assets	(3,380		)	(3,699		)
Amortizations:
Prior Service Cost	53			53
Actuarial Loss	2,309			2,656
Net Periodic Benefit Cost	3,297			3,223
Capitalized Benefit Cost	(1,187		)	(1,239		)
Deferred Benefit Cost	(161		)	—
Total Net Periodic Benefit Expense	$	1,949		$	1,984

	Other Postretirement Benefits
	Three Months Ended March 31,
	2016			2015
Service Cost	$	230		$	327
Interest Cost	653			771
Expected Return on Plan Assets	(776		)	(748		)
Amortizations:
Prior Service Cost	(86		)	152
Actuarial Loss	294			384
Net Periodic Benefit Cost	315			886
Capitalized Benefit Cost	(101		)	(256		)
Total Net Periodic Benefit Expense	$	214		$	630

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LINES OF CREDIT (Tables)

3 Months Ended

Mar. 31, 2016

Line of Credit Facility [Abstract]

Schedule of lines of credit

Credit facilities and available liquidity as of March 31, 2016 were as follows (in thousands):

Company	Total Facility		Usage			Available Liquidity		Expiration Date
SJG:
Commercial Paper Program/Revolving Credit Facility	$	200,000	$	66,900	(A)	$	133,100	May 2018
Uncommitted Bank Lines	10,000		—			10,000		August 2016
Total SJG	210,000		66,900			143,100
SJI:
Revolving Credit Facility	400,000		278,000		(B)	122,000		February 2018
Total SJI	400,000		278,000			122,000
Total	$	610,000	$	344,900		$	265,100

(A) Includes letters of credit outstanding in the amount of $2.1 million.

(B) Includes letters of credit outstanding in the amount of $3.3 million.

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DERIVATIVE INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of notional amounts of outstanding derivative positions

As of March 31, 2016, SJI’s active interest rate swaps were as follows:

Notional Amount		Fixed Interest Rate	Start Date	Maturity	Type	Obligor
$	14,500,000	3.905%	3/17/2006	1/15/2026	Tax-exempt	Marina
$	500,000	3.905%	3/17/2006	1/15/2026	Tax-exempt	Marina
$	330,000	3.905%	3/17/2006	1/15/2026	Tax-exempt	Marina
$	12,500,000	3.530%	12/1/2006	2/1/2036	Tax-exempt	SJG
$	12,500,000	3.430%	12/1/2006	2/1/2036	Tax-exempt	SJG

Fair value of derivative instruments

The fair values of all derivative instruments, as reflected in the condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015, are as follows (in thousands):

Derivatives not designated as hedging instruments under GAAP	March 31, 2016				December 31, 2015
	Assets		Liabilities		Assets		Liabilities
Energy-related commodity contracts:
Derivatives – Energy Related – Current	$	57,815	$	66,370	$	83,093	$	90,708
Derivatives – Energy Related – Non-Current	19,489		10,148		16,238		21,697
Interest rate contracts:
Derivatives - Other	—		13,118		—		10,943
Total derivatives not designated as hedging instruments under GAAP	$	77,304	$	89,636	$	99,331	$	123,348
Total Derivatives	$	77,304	$	89,636	$	99,331	$	123,348

Offsetting assets

As of March 31, 2016 and December 31, 2015, information related to these offsetting arrangements were as follows (in thousands):

As of March 31, 2016
Description	Gross amounts of recognized assets/liabilities			Gross amount offset in the balance sheet		Net amounts of assets/liabilities in balance sheet			Gross amounts not offset in the balance sheet						Net amount
									Financial Instruments				Cash Collateral Posted
Derivatives - Energy Related Assets	$	77,304		$	—	$	77,304		$	(15,597	)	(A)	$	—	$	61,707
Derivatives - Energy Related Liabilities	$	(76,518	)	$	—	$	(76,518	)	$	15,597		(B)	$	22,020	$	(38,901	)
Derivatives - Other	$	(13,118	)	$	—	$	(13,118	)	$	—			$	—	$	(13,118	)

As of December 31, 2015
Description	Gross amounts of recognized assets/liabilities			Gross amount offset in the balance sheet		Net amounts of assets/liabilities in balance sheet			Gross amounts not offset in the balance sheet						Net amount
									Financial Instruments				Cash Collateral Posted
Derivatives - Energy Related Assets	$	99,331		$	—	$	99,331		$	(35,491	)	(A)	$	—	$	63,840
Derivatives - Energy Related Liabilities	$	(112,405	)	$	—	$	(112,405	)	$	35,491		(B)	$	23,045	$	(53,869	)
Derivatives - Other	$	(10,943	)	$	—	$	(10,943	)	$	—			$	—	$	(10,943	)

(A) The balances at March 31, 2016 and December 31, 2015 were related to derivative liabilities which can be net settled against derivative assets.

(B) The balances at March 31, 2016 and December 31, 2015 were related to derivative assets which can be net settled against derivative liabilities.

Offsetting liabilities

As of March 31, 2016 and December 31, 2015, information related to these offsetting arrangements were as follows (in thousands):

As of March 31, 2016
Description	Gross amounts of recognized assets/liabilities			Gross amount offset in the balance sheet		Net amounts of assets/liabilities in balance sheet			Gross amounts not offset in the balance sheet						Net amount
									Financial Instruments				Cash Collateral Posted
Derivatives - Energy Related Assets	$	77,304		$	—	$	77,304		$	(15,597	)	(A)	$	—	$	61,707
Derivatives - Energy Related Liabilities	$	(76,518	)	$	—	$	(76,518	)	$	15,597		(B)	$	22,020	$	(38,901	)
Derivatives - Other	$	(13,118	)	$	—	$	(13,118	)	$	—			$	—	$	(13,118	)

As of December 31, 2015
Description	Gross amounts of recognized assets/liabilities			Gross amount offset in the balance sheet		Net amounts of assets/liabilities in balance sheet			Gross amounts not offset in the balance sheet						Net amount
									Financial Instruments				Cash Collateral Posted
Derivatives - Energy Related Assets	$	99,331		$	—	$	99,331		$	(35,491	)	(A)	$	—	$	63,840
Derivatives - Energy Related Liabilities	$	(112,405	)	$	—	$	(112,405	)	$	35,491		(B)	$	23,045	$	(53,869	)
Derivatives - Other	$	(10,943	)	$	—	$	(10,943	)	$	—			$	—	$	(10,943	)

(A) The balances at March 31, 2016 and December 31, 2015 were related to derivative liabilities which can be net settled against derivative assets.

(B) The balances at March 31, 2016 and December 31, 2015 were related to derivative assets which can be net settled against derivative liabilities.

Derivatives in cash flow hedging relationships

The effect of derivative instruments on the condensed consolidated statements of income for the three months ended March 31, 2016 and 2015 are as follows (in thousands):

	Three Months Ended March 31,
Derivatives in Cash Flow Hedging Relationships under GAAP	2016			2015
Interest Rate Contracts:
Losses recognized in AOCL on effective portion	$	—		$	—
Losses reclassified from AOCL into income (a)	$	(86	)	$	(23	)
Gains (losses) recognized in income on ineffective portion (a)	$	—		$	—

(a) Included in Interest Charges

	Three Months Ended March 31,
Derivatives Not Designated as Hedging Instruments under GAAP	2016			2015
Gains (losses) on energy-related commodity contracts (a)	$	18,655		$	(6,707	)
Losses on interest rate contracts (b)	(427		)	(298		)
Total	$	18,228		$	(7,005	)

(a)  Included in Operating Revenues - Nonutility

(b)  Included in Interest Charges

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FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Fair value of assets and liabilities

For financial assets and financial liabilities measured at fair value on a recurring basis, information about the fair value measurements for each major category is as follows (in thousands):

As of March 31, 2016	Total		Level 1		Level 2		Level 3
Assets
Available-for-Sale Securities (A)	$	14,960	$	2,945	$	12,015	$	—
Derivatives – Energy Related Assets (B)	77,304		7,145		15,986		54,173
	$	92,264	$	10,090	$	28,001	$	54,173
Liabilities
Derivatives – Energy Related Liabilities (B)	$	76,518	$	31,858	$	3,728	$	40,932
Derivatives – Other (C)	13,118		—		13,118		—
	$	89,636	$	31,858	$	16,846	$	40,932

As of December 31, 2015	Total		Level 1		Level 2		Level 3
Assets
Available-for-Sale Securities (A)	$	14,810	$	2,925	$	11,885	$	—
Derivatives – Energy Related Assets (B)	99,331		16,006		24,730		58,595
	$	114,141	$	18,931	$	36,615	$	58,595
Liabilities
Derivatives – Energy Related Liabilities (B)	$	112,405	$	42,170	$	11,008	$	59,227
Derivatives – Other (C)	10,943		—		10,943		—
	$	123,348	$	42,170	$	21,951	$	59,227

(A) Available-for-Sale Securities include securities that are traded in active markets and securities that are not traded publicly. The securities traded in active markets are valued using the quoted principal market close prices that are provided by the trustees and are categorized in Level 1 in the fair value hierarchy. The remaining securities consist of funds that are not publicly traded. These funds, which consist of stocks and bonds that are traded individually in active markets, are valued using quoted prices for similar assets and are categorized in Level 2 in the fair value hierarchy.

(B) Derivatives – Energy Related Assets and Liabilities are traded in both exchange-based and non-exchange-based markets. Exchange-based contracts are valued using unadjusted quoted market sources in active markets and are categorized in Level 1 in the fair value hierarchy. Certain non-exchange-based contracts are valued using indicative price quotations available through brokers or over-the-counter, on-line exchanges and are categorized in Level 2. These price quotations reflect the average of the bid-ask mid-point prices and are obtained from sources that management believes provide the most liquid market. For non-exchange-based derivatives that trade in less liquid markets with limited pricing information, model inputs generally would include both observable and unobservable inputs. In instances where observable data is unavailable, management considers the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks such as liquidity, volatility and contract duration. Such instruments are categorized in Level 3 as the model inputs generally are not observable.

Significant Unobservable Inputs - Management uses the discounted cash flow model to value Level 3 physical and financial forwards, which calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return and credit spreads. Inputs to the valuation model are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third party pricing sources. The validity of the mark-to-market valuations and changes in mark-to-market valuations from period to period are examined and qualified against historical expectations by the risk management function. If any discrepancies are identified during this process, the mark-to-market valuations or the market pricing information is evaluated further and adjusted, if necessary.

Level 3 valuation methods for natural gas derivative contracts include utilizing another location in close proximity adjusted for certain pipeline charges to derive a basis value. The significant unobservable inputs used in the fair value measurement of certain natural gas contracts consist of forward prices developed based on industry-standard methodologies. Significant increases (decreases) in these forward prices for purchases of natural gas would result in a directionally similar impact to the fair value measurement and for sales of natural gas would result in a directionally opposite impact to the fair value measurement. Level 3 valuation methods for electric represent the value of the contract marked to the forward wholesale curve, as provided by daily exchange quotes for delivered electricity. The significant unobservable inputs used in the fair value measurement of electric contracts consist of fixed contracted electric load profiles; therefore, no change in unobservable inputs would occur. Unobservable inputs are updated daily using industry-standard techniques. Management reviews and corroborates the price quotations to ensure the prices are observable which includes consideration of actual transaction volumes, market delivery points, bid-ask spreads and contract duration.

(C) Derivatives – Other are valued using quoted prices on commonly quoted intervals, which are interpolated for periods different than the quoted intervals, as inputs to a market valuation model. Market inputs can generally be verified and model selection does not involve significant management judgment.

Quantitative information regarding significant unobservable inputs of assets in Level 3 fair value measurements

The following table provides quantitative information regarding significant unobservable inputs in Level 3 fair value measurements (in thousands):

Type	Fair Value at March 31, 2016		Valuation Technique	Significant Unobservable Input	Range [Weighted Average]
	Assets	Liabilities
Forward Contract - Natural Gas	$27,715	$15,874	Discounted Cash Flow	Forward price (per dt)	$1.03 - $8.92 [$1.93]	(A)
Forward Contract - Electric	$26,458	$25,058	Discounted Cash Flow	Fixed electric load profile (on-peak)	8.47% - 100.00% [56.83%]	(B)
				Fixed electric load profile (off-peak)	0.00% - 91.53% [43.17%]	(B)

Type	Fair Value at December 31, 2015		Valuation Technique	Significant Unobservable Input	Range [Weighted Average]
	Assets	Liabilities
Forward Contract - Natural Gas	$29,459	$31,733	Discounted Cash Flow	Forward price (per dt)	$(0.77) - $10.00 [$(2.15)]	(A)
Forward Contract - Electric	$29,136	$27,494	Discounted Cash Flow	Fixed electric load profile (on-peak)	8.47% - 100.00% [56.20%]	(B)
				Fixed electric load profile (off-peak)	0.00% - 91.53% [43.80%]	(B)

(A) Represents the range, along with the weighted average, of forward prices for the sale and purchase of natural gas.

(B) Represents the range, along with the weighted average, of the percentage of contracted usage that is loaded during on-peak hours versus off-peak.

Quantitative information regarding significant unobservable inputs of liabilities in Level 3 fair value measurements

The following table provides quantitative information regarding significant unobservable inputs in Level 3 fair value measurements (in thousands):

Type	Fair Value at March 31, 2016		Valuation Technique	Significant Unobservable Input	Range [Weighted Average]
	Assets	Liabilities
Forward Contract - Natural Gas	$27,715	$15,874	Discounted Cash Flow	Forward price (per dt)	$1.03 - $8.92 [$1.93]	(A)
Forward Contract - Electric	$26,458	$25,058	Discounted Cash Flow	Fixed electric load profile (on-peak)	8.47% - 100.00% [56.83%]	(B)
				Fixed electric load profile (off-peak)	0.00% - 91.53% [43.17%]	(B)

Type	Fair Value at December 31, 2015		Valuation Technique	Significant Unobservable Input	Range [Weighted Average]
	Assets	Liabilities
Forward Contract - Natural Gas	$29,459	$31,733	Discounted Cash Flow	Forward price (per dt)	$(0.77) - $10.00 [$(2.15)]	(A)
Forward Contract - Electric	$29,136	$27,494	Discounted Cash Flow	Fixed electric load profile (on-peak)	8.47% - 100.00% [56.20%]	(B)
				Fixed electric load profile (off-peak)	0.00% - 91.53% [43.80%]	(B)

(A) Represents the range, along with the weighted average, of forward prices for the sale and purchase of natural gas.

(B) Represents the range, along with the weighted average, of the percentage of contracted usage that is loaded during on-peak hours versus off-peak.

Changes in fair value of assets using significant unobservable inputs

The changes in fair value measurements of Derivatives – Energy Related Assets and Liabilities for the three months ended March 31, 2016 and 2015, using significant unobservable inputs (Level 3), are as follows (in thousands):

	Three Months Ended March 31, 2016			Three Months Ended March 31, 2015
Balance at beginning of period	$	(632	)	$	(5,608	)
Other changes in fair value from continuing and new contracts, net	10,015			(16,438		)
Settlements	3,858			4,735
Balance at end of period	$	13,241		$	(17,311	)

Changes in fair value of liabilities using significant unobservable inputs

The changes in fair value measurements of Derivatives – Energy Related Assets and Liabilities for the three months ended March 31, 2016 and 2015, using significant unobservable inputs (Level 3), are as follows (in thousands):

	Three Months Ended March 31, 2016			Three Months Ended March 31, 2015
Balance at beginning of period	$	(632	)	$	(5,608	)
Other changes in fair value from continuing and new contracts, net	10,015			(16,438		)
Settlements	3,858			4,735
Balance at end of period	$	13,241		$	(17,311	)

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ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Schedule of changes in accumulated other comprehensive loss (AOCL)

The following tables summarize the changes in accumulated other comprehensive loss (AOCL) for the three months ended March 31, 2016 (in thousands):

	Postretirement Liability Adjustment			Unrealized Gain (Loss) on Derivatives-Other			Unrealized Gain (Loss) on Available-for-Sale Securities			Other Comprehensive Income (Loss) of Affiliated Companies			Total
Balance at January 1, 2016 (a)	$	(22,145	)	$	(2,129	)	$	(128	)	$	(97	)	$	(24,499	)
Other comprehensive loss before reclassifications	—			—			63			—			63
Amounts reclassified from AOCL (b)	—			51			(14		)	—			37
Net current period other comprehensive income (loss)	—			51			49			—			100
Balance at March 31, 2016 (a)	$	(22,145	)	$	(2,078	)	$	(79	)	$	(97	)	$	(24,399	)

(a) Determined using a combined average statutory tax rate of 40%.

(b) See table below.

The following table provides details about reclassifications out of AOCL for the three months ended March 31, 2016:

	Amounts Reclassified from AOCL (in thousands)			Affected Line Item in the Condensed Consolidated Statements of Income
	Three Months Ended March 31, 2016
Unrealized Gain on Derivatives-Other - interest rate contracts designated as cash flow hedges	$	86		Interest Charges
Income Taxes	(35		)	Income Taxes (a)
	$	51
Unrealized Loss on Available-for-Sale Securities	$	(25	)	Other Income
Income Taxes	11			Income Taxes (a)
	$	(14	)
Losses from reclassifications for the period net of tax	$	37

(a) Determined using a combined average statutory tax rate of 40%.

Reclassifications out of AOCL

The following table provides details about reclassifications out of AOCL for the three months ended March 31, 2016:

	Amounts Reclassified from AOCL (in thousands)			Affected Line Item in the Condensed Consolidated Statements of Income
	Three Months Ended March 31, 2016
Unrealized Gain on Derivatives-Other - interest rate contracts designated as cash flow hedges	$	86		Interest Charges
Income Taxes	(35		)	Income Taxes (a)
	$	51
Unrealized Loss on Available-for-Sale Securities	$	(25	)	Other Income
Income Taxes	11			Income Taxes (a)
	$	(14	)
Losses from reclassifications for the period net of tax	$	37

(a) Determined using a combined average statutory tax rate of 40%.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)			3 Months Ended
	May. 08, 2015	Feb. 26, 2015 shares	Mar. 31, 2016 USD ($) county mi shares	Mar. 31, 2015 USD ($)	Dec. 31, 2015 USD ($) shares	Feb. 25, 2015 shares
Accounting Policies [Abstract]
Debt Issuance Costs, Net			$ 8,400,000		$ 9,000,000
Number of counties in which SJG operates | county			7
Length of pipeline (in miles) | mi			100
Common stock, authorized (in shares) | shares		120,000,000				60,000,000
Stock split, conversion ratio	2	2
Amount of Transitional Energy Facility Assessment and Public Utilities Assessment included in revenues and cost of sales			$ 400,000	$ 600,000
Impairment charges			0	$ 0
Amount of costs related to interests in proved and unproved properties in Pennsylvania, net of amortization			$ 8,900,000		$ 8,900,000
Shares of treasury stock held (in shares) | shares			209,298		236,571
Goodwill			$ 8,139,000		$ 8,880,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - GOODWILL (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)
Goodwill [Roll Forward]
Beginning Balance, January 1	$ 8,880
Fair Value Adjustments During Measurement Periods	(741)
Ending Balance, March 31	$ 8,139

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STOCK-BASED COMPENSATION PLAN (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Number of options granted (in shares)	0	0
Fair value per share (in dollars per share)	$ 26.89		$ 24.70
Expected volatility, measurement period	3 years
Service period of shares (in years)	3 years
Total Cost	$ 1,010	$ 985
Capitalized	(106)	(91)
Net Expense	$ 904	894
Unrecognized compensation cost of awards granted under the plan			$ 6,500
Weighted average period over which unrecognized compensation cost is to be recognized	2 years 2 months 12 days
Additional disclosures [Abstract]
Weighted average fair value nonvested shares-beginning balance (in dollars per share)	$ 26.89
Weighted average fair value nonvested shares-granted during the period (in dollars per share)	23.07
Weighted average fair value nonvested shares-cancelled/forfeited during the period (in dollars per share)	26.24
Weighted average fair value nonvested shares-vested during the period (in dollars per share)	29.30
Weighted average fair value nonvested shares-ending balance (in dollars per share)	$ 24.70
Officers and Key Employees
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Number of shares granted (in shares)	192,760
Shares outstanding (in shares)	226,191		404,550
Total Cost	$ 817	$ 799
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward]
Nonvested shares outstanding, beginning balance (in shares)	226,191
Granted (in shares)	192,760
Cancelled/Forfeited (in shares)	(1,154)
Vested (in shares)	(13,247)
Nonvested shares outstanding, ending balance (in shares)	404,550
Officers and Key Employees | 2014 - TSR
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Shares outstanding (in shares)	51,042		51,042
Fair value per share (in dollars per share)	$ 21.31		$ 21.31
Expected volatility	20.00%
Risk-free interest rate	0.80%
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward]
Nonvested shares outstanding, ending balance (in shares)	51,042
Additional disclosures [Abstract]
Weighted average fair value nonvested shares-ending balance (in dollars per share)	$ 21.31
Officers and Key Employees | 2014 - EPS
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Shares outstanding (in shares)	51,042		51,042
Fair value per share (in dollars per share)	$ 27.22		$ 27.22
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward]
Nonvested shares outstanding, ending balance (in shares)	51,042
Additional disclosures [Abstract]
Weighted average fair value nonvested shares-ending balance (in dollars per share)	$ 27.22
Officers and Key Employees | 2015 - TSR
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Shares outstanding (in shares)	34,406		34,406
Fair value per share (in dollars per share)	$ 26.31		$ 26.31
Expected volatility	16.00%
Risk-free interest rate	1.10%
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward]
Nonvested shares outstanding, ending balance (in shares)	34,406
Additional disclosures [Abstract]
Weighted average fair value nonvested shares-ending balance (in dollars per share)	$ 26.31
Officers and Key Employees | 2015 - EPS, ROE, Time
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Shares outstanding (in shares)	75,300		75,300
Fair value per share (in dollars per share)	$ 29.47		$ 29.47
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward]
Nonvested shares outstanding, ending balance (in shares)	75,300
Additional disclosures [Abstract]
Weighted average fair value nonvested shares-ending balance (in dollars per share)	$ 29.47
Officers and Key Employees | 2016 - TSR
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Shares outstanding (in shares)	67,466		67,466
Fair value per share (in dollars per share)	$ 22.01		$ 22.01
Expected volatility	18.10%
Risk-free interest rate	1.31%
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward]
Nonvested shares outstanding, ending balance (in shares)	67,466
Additional disclosures [Abstract]
Weighted average fair value nonvested shares-ending balance (in dollars per share)	$ 22.01
Officers and Key Employees | 2016 - EE, Time
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Shares outstanding (in shares)	125,294		125,294
Fair value per share (in dollars per share)	$ 23.52		$ 23.52
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward]
Nonvested shares outstanding, ending balance (in shares)	125,294
Additional disclosures [Abstract]
Weighted average fair value nonvested shares-ending balance (in dollars per share)	$ 23.52
Officers and Key Employees | 2015 - Time
Additional disclosures [Abstract]
Number of shares awarded during the period	13,247
Fair value of shares issued	$ 300
Director
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Number of shares granted (in shares)	32,882	25,398
Vesting period of shares (in years)	12 months
Director shares vested (as percent)			100.00%
Shares outstanding (in shares)	26,338		32,882
Total Cost	$ 193	$ 186
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward]
Nonvested shares outstanding, beginning balance (in shares)	26,338
Granted (in shares)	32,882	25,398
Cancelled/Forfeited (in shares)	0
Vested (in shares)	(26,338)
Nonvested shares outstanding, ending balance (in shares)	32,882
Additional disclosures [Abstract]
Fair value of shares issued	$ 800	$ 700
Director | 2016
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Shares outstanding (in shares)	32,882		32,882
Fair value per share (in dollars per share)	$ 23.52		$ 23.52
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward]
Nonvested shares outstanding, ending balance (in shares)	32,882
Additional disclosures [Abstract]
Weighted average fair value nonvested shares-ending balance (in dollars per share)	$ 23.52
Stock Appreciation Rights (SARs)
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Number of shares granted (in shares)	0	0
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward]
Granted (in shares)	0	0
Restricted Stock | Officers and Key Employees
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Number of shares granted (in shares)	192,760	151,354
The range of the actual amount of shares that ultimately vest of the original share units granted	0% to 200%
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward]
Granted (in shares)	192,760	151,354
Restricted Stock | Minimum | Officers and Key Employees
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Percentage of actual amount of shares that ultimately vest of original share units granted	0.00%
Restricted Stock | Maximum | Officers and Key Employees
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Percentage of actual amount of shares that ultimately vest of original share units granted	200.00%
Time-based Restricted Stock
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Return on equity award threshold (as percent)	7.00%
Time-based Restricted Stock | Officers and Key Employees
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Number of shares granted (in shares)	57,828	45,406
Vesting period of shares (in years)	3 years
Payout limit (as percent)	100.00%
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward]
Granted (in shares)	57,828	45,406
Performance Shares | January 2012 and 2013 Grants
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Vesting period of shares (in years)	3 years
Additional disclosures [Abstract]
Number of shares awarded during the period	0	0

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AFFILIATIONS AND DISCONTINUED OPERATIONS (Details) $ in Thousands		3 Months Ended
	Dec. 31, 2015 USD ($) investment agreement	Mar. 31, 2016 USD ($) mi	Mar. 31, 2015 USD ($)
Affiliations [Abstract]
Notes receivable - affiliate	$ 16,400	$ 14,800
Notes receivable - affiliate, current	$ 3,134	$ 1,508
Length of pipeline (in miles) | mi		100
Investments in unconsolidated affiliates		$ 1,500	$ 1,700
Notes secured by property, plant and equipment of affiliates		$ 13,700
Interest accrual on secured notes receivable		7.50%
Due from affiliate, non-current and unsecured		$ 1,100
Net asset - included in investment in affiliates and other noncurrent liabilities		20,300
Combined equity contributions and the notes receivable - affiliate		$ 35,100
Energenic US LLC
Affiliations [Abstract]
Equity interest (as percent)		50.00%
Energenic US LLC | Marina Energy LLC
Affiliations [Abstract]
Number of purchase agreements | agreement	2
Number of investments owned | investment	8
Notes receivable - affiliate	$ 19,500
Notes receivable - affiliate, current		$ 1,800
Percentage of voting interests	100.00%
Total consideration transferred	$ 46,000
Fair value of interest exchanged	$ 14,500
Energenic US LLC | Marina Energy LLC | Co-venturer
Affiliations [Abstract]
Number of investments owned | investment	7
Fair value of interest exchanged	$ 31,500
Potato Creek, LLC (Potato Creek)
Affiliations [Abstract]
Equity interest (as percent)		30.00%
PennEast Pipeline Company, LLC (PennEast)
Affiliations [Abstract]
Equity interest (as percent)		20.00%
Length of pipeline (in miles) | mi		100

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AFFILIATIONS AND DISCONTINUED OPERATIONS AFFILIATIONS AND DISCONTINUED OPERATIONS - SUMMARY OF FINAL PURCHASE PRICE ALLOCATION (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Schedule of Equity Method Investments [Line Items]
Goodwill	$ 8,139	$ 8,880
Marina Energy LLC | Energenic US LLC
Schedule of Equity Method Investments [Line Items]
Current assets (excluding inventory)		7,804
Inventory		3,154
Note Receivable Received		19,504
Fixed Assets		41,190
Identifiable Intangibles		22,220
Goodwill		8,139
Non-Current Assets		1,873
Current Liabilities		(8,196)
Note Payable - Affiliate		(16,986)
Long-Term Debt, including current portion		(21,642)
Capital Lease Payable		(10,458)
Other Non-Current Liabilities		(572)
Fair Value of Consolidated Assets and Liabilities of Acquired Projects		$ 46,030

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AFFILIATIONS AND DISCONTINUED OPERATIONS - SUMMARY OF OPERATING RESULTS OF THE DISCONTINUED OPERATIONS (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Loss Before Income Taxes:
Income Tax Benefits	$ 63	$ 137
Loss from Discontinued Operations — Net	$ (118)	$ (276)
Earnings (Loss) Per Common Share from
Basic and Diluted (in dollars per share)	$ 0.00	$ 0.00
Sand Mining
Loss Before Income Taxes:
Loss Before Income Taxes	$ (146)	$ (347)
Fuel Oil
Loss Before Income Taxes:
Loss Before Income Taxes	$ (35)	$ (66)

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COMMON STOCK (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Common Stock [Roll Forward]
Beginning balance (in shares)	70,965,622
New Issues During the Period:
Dividend Reinvestment Plan (in shares)	229,522
Stock-Based Compensation Plan (in shares)	43,023
Ending balance (in shares)	71,238,167
Par value of common stock (in dollars per share)	$ 1.25
Net excess over par value recorded in premium on common stock	$ 6,100
Incremental shares included in diluted EPS calculation (in shares)	288,502	220,762
Proceeds from sale of common stock	$ 5,645	$ 1,857

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FINANCIAL INSTRUMENTS (Details)	1 Months Ended	3 Months Ended		12 Months Ended
	Jun. 30, 2015 USD ($) term	Mar. 31, 2016 USD ($)	Jun. 30, 2015 USD ($) term	Dec. 31, 2015 USD ($)	Dec. 31, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restricted investments held In escrow		$ 3,200,000		$ 3,400,000
Margin accounts with selected counterparties to support risk management activities		34,700,000		43,700,000
Investment in Affiliates		20,254,000		16,983,000
Notes Receivable - Affiliate		13,275,000		13,275,000
Atlantic City Note Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Note receivable, face amount	$ 10,000,000		$ 10,000,000
Proceeds from collection of notes receivable		$ 100,000
Notes receivable, interest rate (as a percent)	1.00%
Notes receivable, term	6 months
Notes receivable, number of additional terms | term	2		2
Notes receivable, length of each additional term	3 months
Energenic US LLC
Accounts, Notes, Loans and Financing Receivable [Line Items]
Equity interest (as percent)		50.00%
Contract term (in years)					20 years
Non-cash charge			$ 7,700,000
Loss from settlement				7,500,000
Investment in Affiliates		$ 1,400,000
Notes Receivable - Affiliate		13,700,000
ACB
Accounts, Notes, Loans and Financing Receivable [Line Items]
Escrow deposit		0		1,700,000
South Jersey Gas Company | Financing Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Long-term receivables, net of unamortized discount		12,200,000		12,900,000
Imputed interest on long term receivables		$ 1,200,000		$ 1,300,000
South Jersey Gas Company | Financing Receivable | Minimum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable, term		5 years
South Jersey Gas Company | Financing Receivable | Maximum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable, term		10 years

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FINANCIAL INSTRUMENTS - CREDIT RISK (Details) - Derivatives Energy Related Assets - Supplier Concentration Risk $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($)
Concentration Risk [Line Items]
Amount of derivatives - energy related assets with single retail counterparty	$ 12.3
Percentage of derivatives - energy related assets with a single retail counterparty	15.90%

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FINANCIAL INSTRUMENTS - FINANCIAL INSTRUMENTS NOT CARRIED AT FAIR VLAUE (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Financial Instruments, Owned, at Fair Value [Abstract]
Long-term debt, fair value	$ 1,143.0	$ 1,079.0
Long-term debt, carrying value	1,075.6	1,026.9
Unamortized debt issuance costs	$ 8.4	$ 9.0

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SEGMENTS OF BUSINESS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Segment Reporting Information [Line Items]
Total Operating Revenues	$ 333,035	$ 382,952
Total Operating Income	114,253	76,371
Total Depreciation and Amortization	26,141	21,586
Total Interest Charges	9,160	8,601
Total Income Taxes	39,267	16,613
Total Property Additions	54,662	49,620
Total Identifiable Assets	3,493,984		$ 3,471,933
Operating Segments
Segment Reporting Information [Line Items]
Total Operating Revenues	349,149	395,873
Total Interest Charges	11,897	10,808
Operating Segments | Energy Group
Segment Reporting Information [Line Items]
Total Operating Revenues	134,298	103,200
Total Operating Income	38,070	3,235
Total Depreciation and Amortization	289	52
Total Interest Charges	196	315
Total Income Taxes	14,808	2,369
Total Property Additions	377	733
Total Identifiable Assets	285,743		342,299
Operating Segments | Energy Services
Segment Reporting Information [Line Items]
Total Operating Revenues	18,209	15,929
Total Operating Income	(45)	(534)
Total Depreciation and Amortization	10,003	7,125
Total Income Taxes	(2,986)	(12,055)
Total Property Additions	2,752	4,497
Total Identifiable Assets	788,323		795,116
Operating Segments | Gas Utility Operations
Segment Reporting Information [Line Items]
Total Operating Revenues	187,766	267,658
Total Operating Income	75,773	73,189
Total Depreciation and Amortization	15,626	14,167
Total Interest Charges	4,787	5,190
Total Income Taxes	27,404	26,172
Total Property Additions	51,370	43,326
Total Identifiable Assets	2,365,728		2,281,576
Operating Segments | Wholesale Energy Operations | Energy Group
Segment Reporting Information [Line Items]
Total Operating Revenues	65,074	35,345
Total Operating Income	38,244	330
Total Depreciation and Amortization	204	32
Total Interest Charges	64	242
Total Income Taxes	14,737	867
Total Property Additions	6	4
Total Identifiable Assets	174,326		231,660
Operating Segments | Retail Gas and Other Operations | Energy Group
Segment Reporting Information [Line Items]
Total Operating Revenues	29,733	38,078
Total Operating Income	(759)	3,087
Total Depreciation and Amortization	85	20
Total Interest Charges	132	73
Total Income Taxes	(168)	1,576
Total Property Additions	371	729
Total Identifiable Assets	60,178		55,111
Operating Segments | Retail Electric Operations | Energy Group
Segment Reporting Information [Line Items]
Total Operating Revenues	39,491	29,777
Total Operating Income	585	(182)
Total Income Taxes	239	(74)
Total Identifiable Assets	51,239		55,528
Operating Segments | On-Site Energy Production | Energy Services
Segment Reporting Information [Line Items]
Total Operating Revenues	16,321	13,572
Total Operating Income	(89)	(482)
Total Depreciation and Amortization	9,919	7,051
Total Interest Charges	3,462	2,315
Total Income Taxes	(3,012)	(12,047)
Total Property Additions	2,651	4,381
Total Identifiable Assets	784,474		790,231
Operating Segments | Appliance Service Operations | Energy Services
Segment Reporting Information [Line Items]
Total Operating Revenues	1,888	2,357
Total Operating Income	44	(52)
Total Depreciation and Amortization	84	74
Total Income Taxes	26	(8)
Total Property Additions	101	116
Total Identifiable Assets	3,849		4,885
Discontinued Operations
Segment Reporting Information [Line Items]
Total Identifiable Assets	1,542		1,545
Corporate and Services
Segment Reporting Information [Line Items]
Total Operating Revenues	8,876	9,086
Total Operating Income	455	481
Total Depreciation and Amortization	223	242
Total Interest Charges	3,452	2,988
Total Income Taxes	41	127
Total Property Additions	163	1,064
Total Identifiable Assets	648,213		652,325
Intersegment Elimination
Segment Reporting Information [Line Items]
Total Operating Revenues	(16,114)	(12,921)
Total Interest Charges	(2,737)	$ (2,207)
Total Identifiable Assets	$ (595,565)		$ (600,928)

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RATES AND REGULATORY ACTIONS (Details) - USD ($) $ in Millions		1 Months Ended
	Feb. 29, 2016	Jan. 31, 2016	Oct. 31, 2015
Energy Efficiency Tracker
Schedule of Capitalization [Line Items]
Decrease in amount of regulatory costs approved	$ 7.9
Basic Gas Supply Service
Schedule of Capitalization [Line Items]
Refunds to customers		$ 20.0
Approved rate decrease (as a percent)			10.30%
Accelerated Infrastructure Replacement Program
Schedule of Capitalization [Line Items]
Extension period of AIRP	7 years
Investment requested to be recovered through CIRT	$ 500.0
Investment requested to be recovered through end of 2016	$ 76.0

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REGULATORY ASSETS & REGULATORY LIABILITIES - REGULATORY ASSETS (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Regulatory Assets [Line Items]
Regulatory assets	$ 356,962	$ 323,434
Environmental Remediation Costs: Expended - Net
Regulatory Assets [Line Items]
Regulatory assets	47,023	42,032
Environmental Remediation Costs: Liability for Future Expenditures
Regulatory Assets [Line Items]
Regulatory assets	136,779	123,194
Deferred Asset Retirement Obligation Costs
Regulatory Assets [Line Items]
Regulatory assets	42,515	42,430
Deferred Pension and Other Postretirement Benefit Costs
Regulatory Assets [Line Items]
Regulatory assets	79,779	79,779
Deferred Gas Costs - Net
Regulatory Assets [Line Items]
Regulatory assets	0	2,701
Conservation Incentive Program Receivable
Regulatory Assets [Line Items]
Regulatory assets	19,205	2,624
Deferred Interest Rate Contracts
Regulatory Assets [Line Items]
Regulatory assets	9,379	7,631
Energy Efficiency Tracker
Regulatory Assets [Line Items]
Regulatory assets	0	496
Pipeline Supplier Service Charges
Regulatory Assets [Line Items]
Regulatory assets	3,360	3,776
Pipeline Integrity Cost
Regulatory Assets [Line Items]
Regulatory assets	4,310	4,596
AFUDC - Equity Related Deferrals
Regulatory Assets [Line Items]
Regulatory assets	11,638	11,423
Other Regulatory Assets
Regulatory Assets [Line Items]
Regulatory assets	$ 2,974	$ 2,752

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REGULATORY ASSETS & REGULATORY LIABILITIES REGULATORY ASSETS & REGULATORY LIABILITIES (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) site asset	Feb. 29, 2016 USD ($)	Dec. 31, 2015 USD ($)
Regulatory Assets [Line Items]
Regulatory assets	$ 356,962		$ 323,434
Regulatory Liabilities [Line Items]
Regulatory liabilities	55,373		42,841
Deferred Revenues - Net
Regulatory Liabilities [Line Items]
Regulatory liabilities	11,241		0
Energy Efficiency Tracker
Regulatory Liabilities [Line Items]
Regulatory liabilities	$ 2,384		0
Environmental Restoration Costs
Regulatory Assets [Line Items]
Number of regulatory assets | asset	2
Number of sites for environmental cleanup | site	12
Original recovery period of expenditures	7 years
Deferred Revenues - Net
Regulatory Assets [Line Items]
Regulatory assets			2,700
Energy Efficiency Tracker
Regulatory Assets [Line Items]
Regulatory assets	$ 0		$ 496
Regulatory Liabilities [Line Items]
Decrease in amount of regulatory costs approved		$ 7,900

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PENSION AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($)	1 Months Ended	3 Months Ended
	Jan. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Pension Benefits
Net periodic benefit cost [Abstract]
Service Cost		$ 1,315,000	$ 1,443,000
Interest Cost		3,000,000	2,770,000
Expected Return on Plan Assets		(3,380,000)	(3,699,000)
Amortizations:
Prior Service Cost		53,000	53,000
Actuarial Loss		2,309,000	2,656,000
Net Periodic Benefit Cost		3,297,000	3,223,000
Capitalized Benefit Cost		(1,187,000)	(1,239,000)
Deferred Benefit Cost		(161,000)	0
Total Net Periodic Benefit Expense		1,949,000	1,984,000
Contributions	$ 15,000,000	0
Estimated future contributions		0
Other Postretirement Benefits
Net periodic benefit cost [Abstract]
Service Cost		230,000	327,000
Interest Cost		653,000	771,000
Expected Return on Plan Assets		(776,000)	(748,000)
Amortizations:
Prior Service Cost		(86,000)	152,000
Actuarial Loss		294,000	384,000
Net Periodic Benefit Cost		315,000	886,000
Capitalized Benefit Cost		(101,000)	(256,000)
Total Net Periodic Benefit Expense		214,000	$ 630,000
Defined benefit plan regulatory obligation to contribute to the plan during the period		3,600,000
Supplemental Employee Retirement Plans, Defined Benefit
Amortizations:
Estimated future contributions		$ 2,300,000

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LINES OF CREDIT (Details) - Line of Credit	3 Months Ended
	Mar. 31, 2016 USD ($) agreement	Mar. 31, 2015 USD ($)
Line of Credit Facility [Line Items]
Total Facility	$ 610,000,000
Usage	344,900,000
Available Liquidity	$ 265,100,000
Weighted average interest rate on borrowings (as a percent)	1.34%	0.88%
Average borrowings outstanding during the period	$ 394,600,000	$ 274,100,000
Maximum amounts outstanding during the period	$ 467,700,000	$ 329,400,000
Financial covenant, ratio of indebtedness to consolidated total capitalization (not more than)	0.65
SJG Commercial Paper Program
Line of Credit Facility [Line Items]
Total Facility	$ 200,000,000
Fixed maturities of notes, at maximum number of days (in days)	270 days
Letter of Credit Reimbursement Agreements [Member]
Line of Credit Facility [Line Items]
Letters of credit outstanding	$ 62,300,000
Number of reimbursement agreements | agreement	3
South Jersey Gas Company
Line of Credit Facility [Line Items]
Total Facility	$ 210,000,000
Usage	66,900,000
Available Liquidity	143,100,000
South Jersey Gas Company | Revolving Credit Facility
Line of Credit Facility [Line Items]
Total Facility	200,000,000
Usage	66,900,000
Available Liquidity	133,100,000
South Jersey Gas Company | Uncommitted Bank Lines
Line of Credit Facility [Line Items]
Total Facility	10,000,000
Usage	0
Available Liquidity	10,000,000
South Jersey Industries Inc
Line of Credit Facility [Line Items]
Total Facility	400,000,000
Usage	278,000,000
Available Liquidity	122,000,000
South Jersey Industries Inc | Revolving Credit Facility
Line of Credit Facility [Line Items]
Total Facility	400,000,000
Usage	278,000,000
Available Liquidity	122,000,000
Letters of credit outstanding	3,300,000
Marina Energy LLC | Letter of Credit Reimbursement Agreement 1
Line of Credit Facility [Line Items]
Letters of credit outstanding	16,400,000
Marina Energy LLC | Letter of Credit Reimbursement Agreement 2
Line of Credit Facility [Line Items]
Letters of credit outstanding	20,000,000
Marina Energy LLC | Letter of Credit Reimbursement Agreement 3
Line of Credit Facility [Line Items]
Letters of credit outstanding	$ 25,000,000

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COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) site unions	Dec. 31, 2015 USD ($)
Collective bargaining agreements [Abstract]
Percentage of personnel represented by collective bargaining agreements	45.00%
Number of unions (in unions) | unions	2
Pending litigation [Abstract]
Estimated litigation liability	$ 3,300	$ 3,200
Environmental Restoration Costs
Environmental remediation costs [Abstract]
Number of sites for environmental cleanup (in number of sites) | site	12
Line of Credit
Collective bargaining agreements [Abstract]
Letter of credit provided	$ 610,000
Line of Credit | South Jersey Gas Company
Collective bargaining agreements [Abstract]
Letter of credit provided	210,000
Line of Credit | South Jersey Gas Company | Revolving Credit Facility
Collective bargaining agreements [Abstract]
Letters of credit outstanding	2,100
Standby Letter of Credit
Collective bargaining agreements [Abstract]
Letter of credit provided	3,300
Letter of Credit, Separate Facility
Collective bargaining agreements [Abstract]
Letter of credit provided	87,500
Parental Guarantee
Guarantees [Abstract]
Guaranteed amount	$ 6,200
Guarantee expiration period	2 years

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DERIVATIVE INSTRUMENTS - DERIVATIVE INSTRUMENTS AND THE ACTIVE INTEREST SWAPS (Details) MWh in Millions	3 Months Ended
	Mar. 31, 2016 USD ($) MWh	Mar. 31, 2016 USD ($) MMcfe
Marina | Interest Rate Swap, $14,500,000 Contract
Derivative [Line Items]
Derivative, Notional Amount	$ 14,500,000	$ 14,500,000
Derivative, Fixed Interest Rate	3.905%	3.905%
Marina | Interest Rate Swap, $500,000 Contract
Derivative [Line Items]
Derivative, Notional Amount	$ 500,000	$ 500,000
Derivative, Fixed Interest Rate	3.905%	3.905%
Marina | Interest Rate Swap, $330,000 Contract
Derivative [Line Items]
Derivative, Notional Amount	$ 330,000	$ 330,000
Derivative, Fixed Interest Rate	3.905%	3.905%
SJG | Interest Rate Swap, $12,500,000 Contract 1
Derivative [Line Items]
Derivative, Notional Amount	$ 12,500,000	$ 12,500,000
Derivative, Fixed Interest Rate	3.53%	3.53%
SJG | Interest Rate Swap, $12,500,000 Contract 2
Derivative [Line Items]
Derivative, Notional Amount	$ 12,500,000	$ 12,500,000
Derivative, Fixed Interest Rate	3.43%	3.43%
Basis and Index Related Purchase and Sales Contracts
Derivative [Line Items]
Notional amount (natural gas in mmcfe and electricity in mwh) | MMcfe		169,600
Derivative Transaction Type, Purchase
Derivative [Line Items]
Notional amount (natural gas in mmcfe and electricity in mwh)	2.6	71,900
Derivative Transaction Type, Sale
Derivative [Line Items]
Notional amount (natural gas in mmcfe and electricity in mwh)	2.4	59,200

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DERIVATIVE INSTRUMENTS - FAIR VALUE OF ALL DERIVATIVE INSTRUMENTS (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Derivatives, Fair Value [Line Items]
Fair value Derivative Assets	$ 77,304	$ 99,331
Fair value Derivative Liabilities	89,636	123,348
Commodity Contract
Derivatives, Fair Value [Line Items]
Fair value Derivative Assets	77,304	99,331
Fair value Derivative Liabilities	0	0
Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Fair value Derivative Assets	77,304	99,331
Fair value Derivative Liabilities	89,636	123,348
Not Designated as Hedging Instrument | Commodity Contract | Derivatives-Energy Related-Current
Derivatives, Fair Value [Line Items]
Fair value Derivative Assets	57,815	83,093
Fair value Derivative Liabilities	66,370	90,708
Not Designated as Hedging Instrument | Commodity Contract | Derivatives-Energy Related-NonCurrent
Derivatives, Fair Value [Line Items]
Fair value Derivative Assets	19,489	16,238
Fair value Derivative Liabilities	10,148	21,697
Not Designated as Hedging Instrument | Interest Rate Contract | Derivatives-Other
Derivatives, Fair Value [Line Items]
Fair value Derivative Assets	0	0
Fair value Derivative Liabilities	$ 13,118	$ 10,943

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DERIVATIVE INSTRUMENTS - OFFSETTING ARRANGEMENTS (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Offsetting Derivative Assets [Abstract]
Gross amounts of recognized assets/liabilities	$ 77,304	$ 99,331
Offsetting Derivative Liabilities [Abstract]
Gross amount offset in the balance sheet	89,636	123,348
Commodity Contract
Offsetting Derivative Assets [Abstract]
Gross amounts of recognized assets/liabilities	77,304	99,331
Gross amount offset in the balance sheet	0	0
Net amounts of assets/liabilities in balance sheet	77,304	99,331
Gross amounts not offset in the balance sheet, Financial Instruments	(15,597)	(35,491)
Gross amounts not offset in the balance sheet, Cash Collateral Posted	0	0
Net amount	61,707	63,840
Offsetting Derivative Liabilities [Abstract]
Gross amounts of recognized assets/liabilities	(76,518)	(112,405)
Gross amount offset in the balance sheet	0	0
Net amounts of assets/liabilities in balance sheet	(76,518)	(112,405)
Gross amounts not offset in the balance sheet, Financial Instruments	15,597	35,491
Gross amounts not offset in the balance sheet, Cash Collateral Posted	22,020	23,045
Net amount	(38,901)	(53,869)
Other Contract
Offsetting Derivative Liabilities [Abstract]
Gross amounts of recognized assets/liabilities	(13,118)	(10,943)
Gross amount offset in the balance sheet	0	0
Net amounts of assets/liabilities in balance sheet	(13,118)	(10,943)
Gross amounts not offset in the balance sheet, Financial Instruments	0	0
Gross amounts not offset in the balance sheet, Cash Collateral Posted	0	0
Net amount	$ (13,118)	$ (10,943)

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DERIVATIVE INSTRUMENTS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Interest Rate Contracts:
Total	$ 18,228	$ (7,005)
Net realized gains (losses), derivative instruments, energy-related contracts	(2,800)	(2,600)
Fair value derivative instruments with credit-risk-related features	33,600
Additional collateral, aggregate fair value	31,500
Designated as Hedging Instrument
Interest Rate Contracts:
Losses recognized in AOCL on effective portion	0	0
Losses reclassified from AOCL into income	(86)	(23)
Gains (losses) recognized in income on ineffective portion	0	0
Not Designated as Hedging Instrument
Interest Rate Contracts:
Gain (losses) on energy related commodity contracts	18,655	(6,707)
Gain (losses) on interest rate contracts	$ (427)	$ (298)

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FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Changes in significant unobservable inputs [Roll forward]
Balance at beginning of period	$ (632)	$ (5,608)
Other changes in fair value from continuing and new contracts, net	10,015	(16,438)
Settlements	3,858	4,735
Balance at end of period	13,241	$ (17,311)
Fair Value, Measurements, Recurring
Assets
Available-for-Sale Securities	14,960		$ 14,810
Derivatives - Energy Related Assets	77,304		99,331
Total Assets	92,264		114,141
Liabilities
Derivatives - Energy Related Liabilities	76,518		112,405
Derivatives - Other	13,118		10,943
Total Liabilities	89,636		123,348
Fair Value, Measurements, Recurring | Level 1
Assets
Available-for-Sale Securities	2,945		2,925
Derivatives - Energy Related Assets	7,145		16,006
Total Assets	10,090		18,931
Liabilities
Derivatives - Energy Related Liabilities	31,858		42,170
Derivatives - Other	0		0
Total Liabilities	31,858		42,170
Fair Value, Measurements, Recurring | Level 2
Assets
Available-for-Sale Securities	12,015		11,885
Derivatives - Energy Related Assets	15,986		24,730
Total Assets	28,001		36,615
Liabilities
Derivatives - Energy Related Liabilities	3,728		11,008
Derivatives - Other	13,118		10,943
Total Liabilities	16,846		21,951
Fair Value, Measurements, Recurring | Level 3
Assets
Available-for-Sale Securities	0		0
Derivatives - Energy Related Assets	54,173		58,595
Total Assets	54,173		58,595
Liabilities
Derivatives - Energy Related Liabilities	40,932		59,227
Derivatives - Other	0		0
Total Liabilities	$ 40,932		$ 59,227

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FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES - LEVEL THREE INPUTS (Details) - Forward Contracts - Fair Value, Inputs, Level 3 $ in Thousands	Mar. 31, 2016 USD ($) $ / decatherm	Dec. 31, 2015 USD ($) $ / decatherm
Minimum | Natural Gas
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items]
Forward price (in dollars per dt) | $ / decatherm	1.03	(0.77)
Minimum | Electricity | On-Peak
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items]
Fixed electric load profile	8.47%	8.47%
Minimum | Electricity | Off-Peak
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items]
Fixed electric load profile	0.00%	0.00%
Maximum | Natural Gas
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items]
Forward price (in dollars per dt) | $ / decatherm	8.92	10.00
Maximum | Electricity | On-Peak
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items]
Fixed electric load profile	100.00%	100.00%
Maximum | Electricity | Off-Peak
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items]
Fixed electric load profile	91.53%	91.53%
Weighted Average | Natural Gas
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items]
Forward price (in dollars per dt) | $ / decatherm	1.93	(2.15)
Weighted Average | Electricity | On-Peak
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items]
Fixed electric load profile	56.83%	56.20%
Weighted Average | Electricity | Off-Peak
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items]
Fixed electric load profile	43.17%	43.80%
Discounted Cash Flow | Natural Gas
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items]
Assets	$ 27,715	$ 29,459
Liabilities	15,874	31,733
Discounted Cash Flow | Electricity
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items]
Assets	26,458	29,136
Liabilities	$ 25,058	$ 27,494

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LONG-TERM DEBT (Details) - USD ($)	1 Months Ended	3 Months Ended
	Jan. 31, 2016	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Debt Instrument [Line Items]
Proceeds from issuance of debt		$ 61,000,000	$ 0
Long-term debt outstanding		1,075,600,000		$ 1,026,900,000
Line of Credit
Debt Instrument [Line Items]
Letter of credit provided		610,000,000
ACB
Debt Instrument [Line Items]
Repayments of debt	$ 12,700,000
South Jersey Gas Company | Loans Payable | Line of Credit
Debt Instrument [Line Items]
Proceeds from issuance of debt	$ 61,000,000
Interest rate (as percent)	1.37%
Letter of credit provided	$ 200,000,000
Long-term debt outstanding		200,000,000
South Jersey Gas Company | Line of Credit
Debt Instrument [Line Items]
Letter of credit provided		$ 210,000,000

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ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance		$ (24,499)
Other comprehensive loss before reclassifications		63
Amounts reclassified from AOCL		37
Other Comprehensive Income - Net of Tax	[1]	100	$ 1
Ending balance		$ (24,399)
Combined statutory tax rate		40.00%	40.00%
Postretirement Liability Adjustment
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance		$ (22,145)
Other comprehensive loss before reclassifications		0
Amounts reclassified from AOCL		0
Other Comprehensive Income - Net of Tax		0
Ending balance		(22,145)
Unrealized Gain (Loss) on Derivatives-Other
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance		(2,129)
Other comprehensive loss before reclassifications		0
Amounts reclassified from AOCL		51
Other Comprehensive Income - Net of Tax		51
Ending balance		(2,078)
Unrealized Gain (Loss) on Available-for-Sale Securities
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance		(128)
Other comprehensive loss before reclassifications		63
Amounts reclassified from AOCL		(14)
Other Comprehensive Income - Net of Tax		49
Ending balance		(79)
Other Comprehensive Income (Loss) of Affiliated Companies
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance		(97)
Other comprehensive loss before reclassifications		0
Amounts reclassified from AOCL		0
Other Comprehensive Income - Net of Tax		0
Ending balance		$ (97)

[1] Determined using a combined average statutory tax rate of 40%.

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ACCUMULATED OTHER COMPREHENSIVE LOSS - RECLASSIFICATIONS OUT OF AOCL (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Reclassification out of Accumulated Other Comprehensive Income [Line Items]
Interest Charges	$ 9,160	$ 8,601
Other Income	(2,203)	(2,241)
Income Taxes	39,267	16,613
Losses (Gains) from reclassifications for the period net of tax	$ (68,187)	$ (53,853)
Combined statutory tax rate	40.00%	40.00%
Reclassification out of Accumulated Other Comprehensive Income
Reclassification out of Accumulated Other Comprehensive Income [Line Items]
Losses (Gains) from reclassifications for the period net of tax	$ 37
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Gain (Loss) on Derivatives-Other
Reclassification out of Accumulated Other Comprehensive Income [Line Items]
Interest Charges	86
Income Taxes	(35)
Losses (Gains) from reclassifications for the period net of tax	51
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Loss on Available-for-Sale Securities
Reclassification out of Accumulated Other Comprehensive Income [Line Items]
Other Income	(25)
Income Taxes	11
Losses (Gains) from reclassifications for the period net of tax	$ (14)