DERIVATIVE INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Outstanding derivative contracts

As of March 31, 2018, SJI and SJG had outstanding derivative contracts as follows (1 MMdts = one million decatherms; 1 MMmWh = one million megawatt hours): 

	SJI Consolidated	SJG
Derivative contracts intended to limit exposure to market risk to:
Expected future purchases of natural gas (in MMdts)	45.3	13.3
Expected future sales of natural gas (in MMdts)	53.8	0.3
Expected future purchases of electricity (in MMmWh)	2.4	—
Expected future sales of electricity (in MMmWh)	2.0	—
Basis and Index related net purchase (sale) contracts (in MMdts)	31.8	(3.1	)

Schedule of notional amounts of outstanding derivative positions

As of March 31, 2018, SJI’s active interest rate swaps were as follows:

Notional Amount		Fixed Interest Rate	Start Date	Maturity	Obligor
$	20,000,000	3.049%	3/15/2017	3/15/2027	SJI
$	20,000,000	3.049%	3/15/2017	3/15/2027	SJI
$	10,000,000	3.049%	3/15/2017	3/15/2027	SJI
$	12,500,000	3.530%	12/1/2006	2/1/2036	SJG
$	12,500,000	3.430%	12/1/2006	2/1/2036	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, 2018 and December 31, 2017, are as follows (in thousands):

SJI (includes SJG and all other consolidated subsidiaries):
Derivatives not designated as hedging instruments under GAAP	March 31, 2018				December 31, 2017
	Assets		Liabilities		Assets		Liabilities
Energy-related commodity contracts:
Derivatives - Energy Related - Current	$	24,386	$	12,486	$	42,139	$	46,938
Derivatives - Energy Related - Non-Current	12,268		4,153		5,988		6,025
Interest rate contracts:
Derivatives - Other - Current	—		526		—		748
Derivatives - Other - Noncurrent	—		7,194		—		9,622
Total derivatives not designated as hedging instruments under GAAP	$	36,654	$	24,359	$	48,127	$	63,333
Total Derivatives	$	36,654	$	24,359	$	48,127	$	63,333

SJG:
Derivatives not designated as hedging instruments under GAAP	March 31, 2018				December 31, 2017
	Assets		Liabilities		Assets		Liabilities
Energy-related commodity contracts:
Derivatives – Energy Related – Current	$	404	$	784	$	7,327	$	9,270
Derivatives – Energy Related – Non-Current	—		328		5		170
Interest rate contracts:
Derivatives – Other Current	—		337		—		389
Derivatives – Other Noncurrent	—		5,669		—		6,639
Total derivatives not designated as hedging instruments under GAAP	$	404	$	7,118	$	7,332	$	16,468
Total Derivatives	$	404	$	7,118	$	7,332	$	16,468

Offsetting assets

As of March 31, 2018 and December 31, 2017, information related to these offsetting arrangements were as follows (in thousands):

As of March 31, 2018
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
SJI (includes SJG and all other consolidated subsidiaries):
Derivatives - Energy Related Assets	$	36,654		$	—	$	36,654		$	(10,086	)	(A)	$	—	$	26,568
Derivatives - Energy Related Liabilities	$	(16,639	)	$	—	$	(16,639	)	$	10,086		(B)	$	755	$	(5,798	)
Derivatives - Other	$	(7,720	)	$	—	$	(7,720	)	$	—			$	—	$	(7,720	)
SJG:
Derivatives - Energy Related Assets	$	404		$	—	$	404		$	(342	)	(A)	$	—	$	62
Derivatives - Energy Related Liabilities	$	(1,112	)	$	—	$	(1,112	)	$	342		(B)	$	755	$	(15	)
Derivatives - Other	$	(6,006	)	$	—	$	(6,006	)	$	—			$	—	$	(6,006	)

As of December 31, 2017
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
SJI (includes SJG and all other consolidated subsidiaries):
Derivatives - Energy Related Assets	$	48,127		$	—	$	48,127		$	(24,849	)	(A)	$	—	$	23,278
Derivatives - Energy Related Liabilities	$	(52,963	)	$	—	$	(52,963	)	$	24,849		(B)	$	8,832	$	(19,282	)
Derivatives - Other	$	(10,370	)	$	—	$	(10,370	)	$	—			$	—	$	(10,370	)
SJG:
Derivatives - Energy Related Assets	$	7,332		$	—	$	7,332		$	(208	)	(A)	$	—	$	7,124
Derivatives - Energy Related Liabilities	$	(9,440	)	$	—	$	(9,440	)	$	208		(B)	$	1,543	$	(7,689	)
Derivatives - Other	$	(7,028	)	$	—	$	(7,028	)	$	—			$	—	$	(7,028	)

(A) The balances at March 31, 2018 and December 31, 2017 were related to derivative liabilities which can be net settled against derivative assets.

(B) The balances at March 31, 2018 and December 31, 2017 were related to derivative assets which can be net settled against derivative liabilities.

Offsetting liabilities

As of March 31, 2018 and December 31, 2017, information related to these offsetting arrangements were as follows (in thousands):

As of March 31, 2018
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
SJI (includes SJG and all other consolidated subsidiaries):
Derivatives - Energy Related Assets	$	36,654		$	—	$	36,654		$	(10,086	)	(A)	$	—	$	26,568
Derivatives - Energy Related Liabilities	$	(16,639	)	$	—	$	(16,639	)	$	10,086		(B)	$	755	$	(5,798	)
Derivatives - Other	$	(7,720	)	$	—	$	(7,720	)	$	—			$	—	$	(7,720	)
SJG:
Derivatives - Energy Related Assets	$	404		$	—	$	404		$	(342	)	(A)	$	—	$	62
Derivatives - Energy Related Liabilities	$	(1,112	)	$	—	$	(1,112	)	$	342		(B)	$	755	$	(15	)
Derivatives - Other	$	(6,006	)	$	—	$	(6,006	)	$	—			$	—	$	(6,006	)

As of December 31, 2017
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
SJI (includes SJG and all other consolidated subsidiaries):
Derivatives - Energy Related Assets	$	48,127		$	—	$	48,127		$	(24,849	)	(A)	$	—	$	23,278
Derivatives - Energy Related Liabilities	$	(52,963	)	$	—	$	(52,963	)	$	24,849		(B)	$	8,832	$	(19,282	)
Derivatives - Other	$	(10,370	)	$	—	$	(10,370	)	$	—			$	—	$	(10,370	)
SJG:
Derivatives - Energy Related Assets	$	7,332		$	—	$	7,332		$	(208	)	(A)	$	—	$	7,124
Derivatives - Energy Related Liabilities	$	(9,440	)	$	—	$	(9,440	)	$	208		(B)	$	1,543	$	(7,689	)
Derivatives - Other	$	(7,028	)	$	—	$	(7,028	)	$	—			$	—	$	(7,028	)

(A) The balances at March 31, 2018 and December 31, 2017 were related to derivative liabilities which can be net settled against derivative assets.

(B) The balances at March 31, 2018 and December 31, 2017 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, 2018 and 2017 are as follows (in thousands):

	Three Months Ended March 31,
Derivatives in Cash Flow Hedging Relationships under GAAP	2018			2017
SJI (includes SJG and all other consolidated subsidiaries):
Interest Rate Contracts:
Losses reclassified from AOCL into income (a)	$	(12	)	$	(2,487	)
SJG:
Interest Rate Contracts:
Losses reclassified from AOCL into income (a)	$	(12	)	$	(12	)

(a) Included in Interest Charges

	Three Months Ended March 31,
Derivatives Not Designated as Hedging Instruments under GAAP	2018		2017
SJI (includes SJG and all other consolidated subsidiaries):
Gains on energy-related commodity contracts (a)	$	23,353	$	14,688
Gains (Losses) on interest rate contracts (b)	1,628		(1,005		)
Total	$	24,981	$	13,683

(a)  Included in Operating Revenues - Nonutility

(b)  Included in Interest Charges