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REGULATORY ASSETS AND REGULATORY LIABILITIES
 9 Months Ended
Sep. 30, 2019
Regulatory Assets and Liabilities Disclosure [Abstract]  
REGULATORY ASSETS AND REGULATORY LIABILITIES REGULATORY ASSETS AND REGULATORY LIABILITIES:
There have been no significant changes to the nature of the Utilities' regulatory assets and liabilities since December 31, 2018, which are described in Note 11 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2018.

The Utilities' Regulatory Assets as of September 30, 2019 consisted of the following items (in thousands):
September 30, 2019
SJGETGELKTotal SJI
Environmental Remediation Costs:
Expended - Net$149,402  $16,809  $—  $166,211  
Liability for Future Expenditures144,543  103,332  —  247,875  
Deferred ARO Costs34,941  13,176  143  48,260  
Deferred Pension Costs - Unrecognized Prior Service Cost—  38,183  14  38,197  
Deferred Pension and Other Postretirement Benefit Costs79,466  2,607  30  82,103  
Deferred Gas Costs - Net66,265  12,929  924  80,118  
SBC Receivable1,159  —  —  1,159  
Deferred Interest Rate Contracts8,996  —  —  8,996  
Energy Efficiency Tracker9,322  —  —  9,322  
Pipeline Supplier Service Charges548  —  —  548  
Pipeline Integrity Cost5,923  —  —  5,923  
AFUDC - Equity Related Deferrals10,397  —  —  10,397  
Other Regulatory Assets10,054  9,817  446  20,317  
Total Regulatory Assets$521,016  $196,853  $1,557  $719,426  

The Utilities' Regulatory Assets as of December 31, 2018 consisted of the following items (in thousands):

December 31, 2018
SJGETGELKTotal SJI
Environmental Remediation Costs:
Expended - Net$136,227  $10,875  $—  $147,102  
Liability for Future Expenditures148,071  104,594  —  252,665  
Deferred ARO Costs31,096  —  —  31,096  
Deferred Pension Costs - Unrecognized Prior Service Cost—  40,612  14  40,626  
Deferred Pension and Other Postretirement Benefit Costs80,121  2,607  30  82,758  
Deferred Gas Costs - Net57,889  —  289  58,178  
SBC Receivable2,173  —  —  2,173  
Deferred Interest Rate Contracts5,867  —  —  5,867  
Energy Efficiency Tracker2,319  —  —  2,319  
Pipeline Supplier Service Charges617  —  —  617  
Pipeline Integrity Cost5,140  —  —  5,140  
AFUDC - Equity Related Deferrals13,914  —  —  13,914  
Weather Normalization—  3,210  139  3,349  
Other Regulatory Assets8,931  8,023  211  17,165  
Total Regulatory Assets$492,365  $169,921  $683  $662,969  
Except where noted below, all regulatory assets are or are expected to be recovered through utility rate charges, as detailed in the following discussion. The Utilities are currently permitted to recover interest on Environmental Remediation Costs, Societal Benefit Costs Receivable, EET and Pipeline Integrity Costs, while the other assets are being recovered without a return on investment.

ENVIRONMENTAL REMEDIATION COSTS - SJG and ETG have two regulatory assets associated with environmental costs related to the cleanup of environmental sites. SJG has 12 sites where SJG or its predecessors previously operated gas manufacturing plants, while ETG is subject to environmental remediation liabilities associated with six former manufactured gas plant sites in New Jersey. The first asset, "Environmental Remediation Cost: Expended - Net," represents what was actually spent to clean up the sites, less recoveries through the RAC and insurance carriers. These costs meet the deferral requirements of GAAP, as the BPU allows SJG and ETG 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 and ETG recorded this estimated amount as a regulatory asset with the corresponding current and noncurrent liabilities on the condensed consolidated balance sheets under the captions "Current Liabilities" (SJI and SJG), "Deferred Credits and Other Noncurrent Liabilities" (SJI) and "Regulatory and Other Noncurrent Liabilities" (SJG). The BPU allows SJG to recover the deferred costs over seven year periods after they are incurred. Accrued environmental remediation costs at ETG are recoverable from customers through rate mechanisms approved by the BPU.

DEFERRED GAS COSTS - NET - Over/under collections of gas costs are monitored through SJG's and ETG's BGSS bill credit. Net undercollected gas costs are classified as a regulatory asset and net overcollected 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 regulatory assets of SJI and SJG increased $21.9 million and $8.4 million, respectively, from December 31, 2018 to September 30, 2019, primarily due to gas commodity costs exceeding recoveries from customers and changes in valuations of hedged natural gas positions from prior periods.

DEFERRED ARO COSTS - The Utilities record AROs primarily related to the legal obligation to cut and cap gas distribution pipelines when taking those pipelines out of service. Deferred ARO costs represent the period to period passage of time (accretion) and the revision to cash flows originally estimated to settle the retirement obligation. The Deferred ARO Costs regulatory asset increased $17.2 million from December 31, 2018 to September 30, 2019, due to revisions to the settlement timing, retirement costs, and changes to inflation and discount rates used to measure the expected retirement costs combined with the addition of ETG's ARO liability recorded through purchase accounting (see Note 17). Corresponding decreases are made to the ARO liability, thus having no impact on earnings.

EET - The EET Regulatory Asset increased $7.0 million from December 31, 2018 to September 30, 2019 due to excess program expenditures incurred net of recoveries.

OTHER REGULATORY ASSETS - Some of the assets included in Other Regulatory Assets are currently being recovered from ratepayers as approved by the BPU. Management believes the remaining deferred costs are probable of recovery from ratepayers through future utility rates. Included in this number for SJG is the impact of the ERIP on SJG employees, see Note 1 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2018.
The Utilities Regulatory Liabilities as of September 30, 2019 consisted of the following items (in thousands):

September 30, 2019
 SJGETGELKTotal SJI
Excess Plant Removal Costs$17,088  $34,761  $1,419  $53,268  
Excess Deferred Taxes252,499  118,459  1,233  372,191  
Deferred Revenues - Net—  13  —  13  
CIP Payable2,944  —  —  2,944  
Weather Normalization—  1,646  —  1,646  
Amounts to be Refunded to Customers—  11,687  —  11,687  
Other Regulatory Liabilities—  415  —  415  
Total Regulatory Liabilities$272,531  $166,981  $2,652  $442,164  

The Utilities Regulatory Liabilities as of December 31, 2018 consisted of the following items (in thousands):

December 31, 2018
 SJGETGELKTotal SJI
Excess Plant Removal Costs$20,805  $47,909  $1,393  $70,107  
Excess Deferred Taxes259,863  118,757  1,231  379,851  
Deferred Gas Costs - Net—  3,188  —  3,188  
CIP Payable5,871  —  —  5,871  
Amounts to be Refunded to Customers—  17,039  —  17,039  
Other Regulatory Liabilities—  2,443  —  2,443  
Total Regulatory Liabilities$286,539  $189,336  $2,624  $478,499  

EXCESS DEFERRED TAXES - This liability is recognized as a result of Tax Reform (see Notes 1 and 4 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2018). The decrease in this liability from December 31, 2018 to September 30, 2019 is related to excess tax amounts returned to customers through customer billings. The Unprotected amount of excess deferred taxes of $26.1 million will be returned to customers over a five year period. The remaining balance will be deferred until SJG's next base rate case as approved by the BPU.

WEATHER NORMALIZATION - The tariffs for ETG include a weather normalization clause that reduces customer bills when winter weather is colder than normal and increases customer bills when winter weather is warmer than normal. The overall reduction of ETG's weather normalization from a $3.2 million regulatory asset at December 31, 2018 to a $1.6 million regulatory liability at September 30, 2019, was due to timing of collections from customers and colder than normal weather during the first three months of the year.

EXCESS PLANT REMOVAL COSTS - The Utilities accrue and collect for cost of removal of utility property. This regulatory liability represents customer collections in excess of actual expenditures, which will be returned to customers as a reduction to depreciation expense. The Excess Plant Removal Costs Liability decreased from December 31, 2018 primarily related to removal costs incurred by the Utilities.

AMOUNTS TO BE REFUNDED TO CUSTOMERS - See "AMA" section in Note 1.