DERIVATIVE INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Outstanding derivative contracts

As of March 31, 2019, SJI and SJG had outstanding derivative contracts as follows: 

	SJI Consolidated	SJG
Derivative contracts intended to limit exposure to market risk to:
Expected future purchases of natural gas (in MMdts)	81.0	13.5
Expected future sales of natural gas (in MMdts)	76.8	0.3
Expected future purchases of electricity (in MMmWh)	1.4	—
Expected future sales of electricity (in MMmWh)	1.1	—
Basis and Index related net purchase (sale) contracts (in MMdts)	15.5	2.5

Schedule of notional amounts of outstanding derivative positions

As of March 31, 2019, 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, 2019 and December 31, 2018, are as follows (in thousands):

SJI (includes SJG and all other consolidated subsidiaries):
Derivatives not designated as hedging instruments under GAAP	March 31, 2019				December 31, 2018
	Assets		Liabilities		Assets		Liabilities
Energy-related commodity contracts:
Derivatives - Energy Related - Current	$	29,180	$	21,392	$	54,021	$	24,134
Derivatives - Energy Related - Non-Current	13,677		5,713		7,169		7,256
Interest rate contracts:
Derivatives - Other - Current	—		780		—		588
Derivatives - Other - Noncurrent	—		8,898		—		7,285
Total derivatives not designated as hedging instruments under GAAP	$	42,857	$	36,783	$	61,190	$	39,263
Total Derivatives	$	42,857	$	36,783	$	61,190	$	39,263

SJG:
Derivatives not designated as hedging instruments under GAAP	March 31, 2019				December 31, 2018
	Assets		Liabilities		Assets		Liabilities
Energy-related commodity contracts:
Derivatives – Energy Related – Current	$	2,076	$	693	$	5,464	$	2,146
Derivatives – Energy Related – Non-Current	—		96		15		43
Interest rate contracts:
Derivatives – Other - Current	—		391		—		343
Derivatives – Other - Noncurrent	—		6,191		—		5,524
Total derivatives not designated as hedging instruments under GAAP	$	2,076	$	7,371	$	5,479	$	8,056
Total Derivatives	$	2,076	$	7,371	$	5,479	$	8,056

Offsetting assets

As of March 31, 2019 and December 31, 2018, information related to these offsetting arrangements were as follows (in thousands):

As of March 31, 2019
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	$	42,857		$	—	$	42,857		$	(23,142	)	(A)	$	—	$	19,715
Derivatives - Energy Related Liabilities	$	(27,105	)	$	—	$	(27,105	)	$	23,142		(B)	$	479	$	(3,484	)
Derivatives - Other	$	(9,678	)	$	—	$	(9,678	)	$	—			$	—	$	(9,678	)
SJG:
Derivatives - Energy Related Assets	$	2,076		$	—	$	2,076		$	(303	)	(A)	$	—	$	1,773
Derivatives - Energy Related Liabilities	$	(789	)	$	—	$	(789	)	$	303		(B)	$	479	$	(7	)
Derivatives - Other	$	(6,582	)	$	—	$	(6,582	)	$	—			$	—	$	(6,582	)

As of December 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	$	61,190		$	—	$	61,190		$	(21,045	)	(A)	$	(7,252	)	$	32,893
Derivatives - Energy Related Liabilities	$	(31,390	)	$	—	$	(31,390	)	$	21,045		(B)	$	—		$	(10,345	)
Derivatives - Other	$	(7,873	)	$	—	$	(7,873	)	$	—			$	—		$	(7,873	)
SJG:
Derivatives - Energy Related Assets	$	5,479		$	—	$	5,479		$	(347	)	(A)	$	688		$	5,820
Derivatives - Energy Related Liabilities	$	(2,189	)	$	—	$	(2,189	)	$	347		(B)	$	—		$	(1,842	)
Derivatives - Other	$	(5,867	)	$	—	$	(5,867	)	$	—			$	—		$	(5,867	)

(A) The balances at March 31, 2019 and December 31, 2018 were related to derivative liabilities which can be net settled against derivative assets.

(B) The balances at March 31, 2019 and December 31, 2018 were related to derivative assets which can be net settled against derivative liabilities.

Offsetting liabilities

As of March 31, 2019 and December 31, 2018, information related to these offsetting arrangements were as follows (in thousands):

As of March 31, 2019
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	$	42,857		$	—	$	42,857		$	(23,142	)	(A)	$	—	$	19,715
Derivatives - Energy Related Liabilities	$	(27,105	)	$	—	$	(27,105	)	$	23,142		(B)	$	479	$	(3,484	)
Derivatives - Other	$	(9,678	)	$	—	$	(9,678	)	$	—			$	—	$	(9,678	)
SJG:
Derivatives - Energy Related Assets	$	2,076		$	—	$	2,076		$	(303	)	(A)	$	—	$	1,773
Derivatives - Energy Related Liabilities	$	(789	)	$	—	$	(789	)	$	303		(B)	$	479	$	(7	)
Derivatives - Other	$	(6,582	)	$	—	$	(6,582	)	$	—			$	—	$	(6,582	)

As of December 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	$	61,190		$	—	$	61,190		$	(21,045	)	(A)	$	(7,252	)	$	32,893
Derivatives - Energy Related Liabilities	$	(31,390	)	$	—	$	(31,390	)	$	21,045		(B)	$	—		$	(10,345	)
Derivatives - Other	$	(7,873	)	$	—	$	(7,873	)	$	—			$	—		$	(7,873	)
SJG:
Derivatives - Energy Related Assets	$	5,479		$	—	$	5,479		$	(347	)	(A)	$	688		$	5,820
Derivatives - Energy Related Liabilities	$	(2,189	)	$	—	$	(2,189	)	$	347		(B)	$	—		$	(1,842	)
Derivatives - Other	$	(5,867	)	$	—	$	(5,867	)	$	—			$	—		$	(5,867	)

(A) The balances at March 31, 2019 and December 31, 2018 were related to derivative liabilities which can be net settled against derivative assets.

(B) The balances at March 31, 2019 and December 31, 2018 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, 2019 and 2018 are as follows (in thousands):

	Three Months Ended March 31,
Derivatives in Cash Flow Hedging Relationships under GAAP	2019			2018
SJI (includes SJG and all other consolidated subsidiaries):
Interest Rate Contracts:
Losses reclassified from AOCL into income (a)	$	(12	)	$	(12	)
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	2019			2018
SJI (includes SJG and all other consolidated subsidiaries):
(Losses) Gains on energy-related commodity contracts (a)	$	(12,060	)	$	23,353
(Losses) Gains on interest rate contracts (b)	(1,090		)	1,628
Total	$	(13,150	)	$	24,981

(a)  Included in Operating Revenues - Nonutility

(b)  Included in Interest Charges