DERIVATIVE INSTRUMENTS (Tables)
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3 Months Ended |
Mar. 31, 2019 |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] |
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| 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 |
|
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| 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 |
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| 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 |
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| | | | | | | | | | | | | | | | | | 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 |
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| 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 |
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(a) Included in Operating Revenues - Nonutility (b) Included in Interest Charges |