RATES AND REGULATORY ACTIONS	12 Months Ended
Dec. 31, 2021
Public Utilities, General Disclosures [Abstract]
RATES AND REGULATORY ACTIONS	RATES AND REGULATORY ACTIONS: SJG and ETG are subject to the rules and regulations of the BPU. SJG: Base Rate Case - In March 2020, SJG filed a base rate case with the BPU to increase its base rates in order to obtain a return on new capital investments made by SJG since the settlement of its last base rate case in 2017. In September 2020, the BPU approved the settlement of SJG's rate case petition, resulting in an increase in annual revenues from base rates effective October 1, 2020 of $39.5 million, including an approved after-tax rate of return of 6.9%, with a return on equity of 9.6% and a common equity component of 54.0%. Included was recovery of $10.1 million in costs related to a previous project to re-power the former BL England facility with natural gas (see Note 11) and $5.1 million of costs related to the ERIP (see Note 12). These costs are to be amortized over a five year period commencing October 1, 2020. Periodic Rate Mechanisms: SJG's tariff, a schedule detailing the terms, conditions and rate information applicable to its various types of natural gas service, as approved by the BPU, has several primary rate mechanisms. The current effective rate mechanisms reflected in SJG’s tariff, and regulatory actions regarding each for the preceding three years, are described below (filings and petitions described below are still pending unless otherwise indicated). The approvals for the BGSS and clauses under the SBC discussed below do not impact SJG's earnings. They represent changes in the cash requirements of SJG corresponding to cost changes and/or previously over/under recoveries from ratepayers associated with each respective mechanism. BGSS Clause - The BGSS price structure allows SJG to recover all prudently incurred gas costs. Changes to BGSS charges to customers can occur either monthly or periodically (annually). Monthly changes in BGSS charges are applicable to large use customers and are pursuant to a BPU-approved formula based on commodity market prices. Periodic changes in BGSS charges are applicable to lower usage customers, which include all of SJG's residential customers, and those rates are evaluated at least annually by the BPU. However, to some extent, more frequent rate changes to the periodic BGSS are allowed. SJG collects gas costs from customers on a forecasted basis and defers periodic over/under recoveries to the following BGSS year, which runs from October 1 through September 30. If SJG is in a net cumulative undercollected position, gas costs deferrals are reflected on the consolidated balance sheets as a regulatory asset. If SJG is in a net cumulative overcollected position, amounts due back to customers are reflected on the consolidated balance sheets as a regulatory liability. SJG pays interest on net overcollected BGSS balances at the rate of return on rate base utilized by the BPU to set rates in the most recently concluded base rate proceeding. •2019-2020 BGSS year - In September 2019, the BPU approved, on a provisional basis, a $27.6 million decrease in gas cost recoveries, effective October 1, 2019. This was approved as a final rate in the first quarter of 2020 with no changes from the provisional rate. •2020-2021 BGSS year - In September 2020, the BPU approved, on a provisional basis, a $59.4 million decrease in gas cost recoveries, effective October 1, 2020 based on SJG's June 2020 BGSS filing. Although SJG's June 2020 BGSS filing included consideration of $22.9 million of costs requested to be recovered over a two-year period related to a previous dispute on a long-term gas supply contract that was settled during 2019 ("supply contract costs"), the provisional rate adjustments effective October 1, 2020 included the temporary removal of these amounts to allow for a further review of these costs during the course of this proceeding. In May 2021, the BPU approved these provisional rates, adjusted for a two-year amortization of the supply contract costs through September 30, 2022 as final effective June 1, 2021. •2021-2022 BGSS year - In November 2021, the BPU approved, on a provisional basis, a $36.2 million increase in gas cost recoveries, effective December 1, 2021. The approval extended the amortization of the supply contract costs to September 30, 2024. In addition, as allowed under the BGSS clause, in November 2021, SJG issued a notice to the BPU of SJG's intent to self-implement a BGSS rate adjustment representing an additional 5% increase of the monthly bill of a typical residential customer, effective December 1, 2021, for a total increase of $56.6 million in revenues. CIP - The primary purpose of the CIP is to promote conservation efforts, without negatively impacting financial stability, and to base SJG's profit margin on the number of customers rather than the amount of natural gas distributed to customers. Each CIP year begins October 1 and ends September 30 of the subsequent year. On a monthly basis during the CIP year, SJG records adjustments to earnings based on weather and customer usage factors, as incurred. Subsequent to each year, SJG makes filings with the BPU to review and approve amounts recorded under the CIP. BPU-approved cash inflows or outflows generally will not begin until the next CIP year. •2019-2020 CIP year - In September 2019, the BPU approved, on a provisional basis, a total $7.6 million net decrease in revenues, which included a $32.3 million decrease in non-weather related revenues and a $24.7 million increase in weather related revenues, effective October 2019. This was approved as a final rate in the first quarter of 2020 with no changes from the provisional rate. •2020-2021 CIP year - In September 2020, the BPU approved, on a provisional basis, a $27.4 million increase in revenues, effective October 1, 2020, which included a $17.3 million increase in weather-related revenues and a $10.1 million increase in non-weather-related revenues. This was approved as a final rate in the second quarter of 2021 with no changes from the provisional rate. •2021-2022 CIP year - In November 2021, the BPU approved, on a provisional basis, a $15.3 million decrease in revenues, effective December 1, 2021, which included a $6.5 million decrease in weather-related revenues and a $8.8 million decrease in non-weather related revenues. AIRP - In October 2016, the BPU approved an extension of the AIRP for a five-year period commencing October 1, 2016 through September 30, 2021, with authorized investments of up to $302.5 million to continue replacing cast iron and unprotected bare steel mains and associated services ("AIRP II"). Pursuant to the Order, AIRP II investments are to be recovered through annual base rate adjustments. •September 2019 - The BPU approved an increase in annual revenues from base rates of $6.7 million to reflect the roll-in of $64.5 million of in service AIRP II investments from July 1, 2018 through June 30, 2019, effective October 1, 2019. •September 2020 - The BPU approved an increase in annual revenues from base rates of $6.4 million to reflect the roll-in of $58.8 million of AIRP II in service investments for the period July 1, 2019 through June 30, 2020, effective October 1, 2020. •December 2021 - The BPU approved an increase in annual revenues from base rates of $6.7 million to reflect the roll-in of $69.0 million of AIRP II in service investments for the period July 1, 2020 through September 30, 2021. The AIRP II Program concluded September 30, 2021 and the final rate adjustment for this program became effective January 1, 2022. SHARP - SHARP replaces low pressure distribution mains and services with high pressure mains and services in coastal areas that are susceptible to flooding during major storm events. SHARP investments are to be recovered through annual base rate adjustments. Phase one of SJG’s initial SHARP expired in June 2017. In May 2018, the BPU approved SJG's petition to continue its storm hardening efforts under a second phase of SHARP ("SHARP II"). SHARP II is a three-year program, with a total investment level of approximately $100.3 million, focused on four system enhancement projects within the coastal regions. •April 2019 - SJG submitted its first annual filing, pursuant to the May 2018 BPU approval of the SHARP II, seeking a base rate adjustment to increase annual revenues by approximately $3.0 million to reflect the roll-in of approximately $28.3 million of SHARP II investments placed in service during June 1, 2018 through June 30, 2019. •September 2019 - The BPU approved an increase in annual revenues from base rates of $2.9 million to reflect the roll-in of $27.4 million of in service SHARP II investments made from July 1, 2018 through June 30, 2019, effective October 1, 2019. •September 2020 - The BPU approved an increase in annual revenues from base rates of $3.7 million to reflect the roll-in of $33.3 million of SHARP II in service investments for the period July 1, 2019 through June 30, 2020, effective October 1, 2020. •September 2021 - The BPU approved an increase in annual revenues from base rates of $2.2 million to reflect the roll-in of $22.8 million of SHARP II in service investments for the period July 1, 2020 through June 30, 2021. The SHARP II program ended June 30, 2021 and the final rate adjustment for this program became effective October 1, 2021. IIP – In November 2020, SJG filed a petition with the BPU, seeking authority to implement an IIP pursuant to which SJG would recover the costs associated with SJG's planned initial investment of approximately $742.5 million from 2021-2026 to, among other things, replace its at-risk plastic and coated steel mains, as well as excess flow valves on new service lines, and related services. This matter is pending before the BPU. EET - SJG has authorization to recover costs associated with its EEPs through the EET cost recovery mechanism. The EEP rate enables SJG to recover the costs of its EEP as authorized by the BPU. SJG’s EEP consists of a range of rebates and related offers, including, for example, various customer education and outreach initiatives, as well as an on-line customer dashboard, that are designed to encourage customers to conserve energy and to provide them with information on how to lower their gas bills. In October 2018, the BPU approved the continuation of SJG's existing EEPs with modifications, and to implement several new EEPs for a period of three years (the "EEP IV"), with a total budget of $81.3 million and a revenue increase of $3.5 million, effective November 1, 2018, which allow SJG to recover incremental operating and maintenance expenses and earn a return of, and return on, program investments over a seven-year amortization period. From 2019 through 2021, the following changes occurred related to the recovery of costs and the allowed return of, and on, prior investments associated with EET/EEPs: •January 2019 - The BPU approved a $1.6 million decrease in revenues, effective February 1, 2019. •January 2020 - The BPU approved a $1.3 million increase in revenues, effective February 1, 2020. •January 2021 - The BPU approved a $5.9 million increase in revenues, effective February 1, 2021. In addition, in September 2020, SJG filed a petition seeking authorization to implement new EEPs, commencing July 1, 2021 (the "EEP V"). SJG’s petition included a request to recover, in the first year, $6.3 million in revenues. In April 2021, the BPU approved SJG's continuation of several of SJG's existing EEPs with modifications. It also approved SJG's implementation of EEP V for a period of three years, with a total budget of $133.3 million and a revenue increase of $5.4 million, effective July 1, 2021. This approval allows SJG to recover incremental operating and maintenance expenses and earns a return of, and return on, program investments over a ten-year amortization period. SBC - The SBC allows SJG to recover costs related to several BPU-mandated programs. Within the SBC are the RAC, the CLEP and the USF and LL programs. The USF and LL programs require a separate annual regulatory filing while annual adjustments for the RAC and CLEP programs are the subject of our annual SBC filings discussed below. The RAC recovers environmental remediation costs of 12 former gas manufacturing plants (see Note 15). The BPU allows SJG to recover such costs over seven-year amortization periods, resulting in a regulatory asset for the costs that have been incurred but not yet recovered in rates (see Note 11). The CLEP recovers costs associated with SJG’s energy efficiency and renewable energy programs required under the NJCEP. From July 2018 through July 2021, the BPU approved annual NJCEP funding levels of $344.7 million for which SJG’s annual responsibility during the timeframe ranged from $12.7 million to $13.2 million. Regulatory filings related to the RAC and CLEP programs over the preceding three years were as follows: •2018-2019 SBC filing - In March 2019, the BPU approved a $2.2 million decrease in revenues, with rates effective May 1, 2019. •2019-2020 SBC filing - In March 2020, the BPU approved a $3.9 million increase in revenues, effective April 1, 2020. •2020-2021 SBC filing - In April 2021, the BPU approved a $5.1 million increase in annual revenue, effective June 1, 2021. •2021-2022 SBC filing - In July 2021, SJG filed its annual SBC petition, requesting a $0.9 million increase in annual revenues. This matter is pending BPU approval. The USF and LL are statewide programs which are funded from collections from customers of all New Jersey electric and gas utilities. From 2018-2021, the BPU approved statewide USF and LL annual budgets for all NJ gas utilities ranging from $45.6 million to $80.3 million, of which SJG’s annual responsibility during that timeframe was between $5.5 million and $9.6 million. Unbundling - This allows all natural gas consumers to select their natural gas commodity supplier. As of December 31, 2021, 19,793 of SJG's customers were purchasing their gas commodity from someone other than SJG. Customers choosing to purchase natural gas from providers other than the utility are charged for the cost of gas by the marketer. While customer choice can reduce utility revenues, it does not negatively affect SJG's net income or financial condition as the resulting decrease in utility revenues is offset by a corresponding decrease in gas costs. The BPU continues to allow for full recovery of prudently incurred natural gas costs through the BGSS. Unbundling did not change the fact that SJG still recovers cost of service, including certain deferred costs, through base rates. Pipeline Integrity Costs - SJG is permitted to defer and recover incremental costs incurred as a result of Pipeline Integrity Management regulations, which are aimed at enhancing public safety and reliability. The regulations require that utilities use a comprehensive analysis to assess, evaluate, repair and validate the integrity of certain transmission lines in the event of a leak or failure. SJG is authorized to defer future program costs, including related carrying costs, for recovery in the next base rate case proceeding, subject to review by the BPU. Tax Reform - In response to the implementation of Tax Reform, in March 2018, SJG filed a petition with the BPU for a change within base rates, a customer refund, and the introduction of a rider ("Rider H") to reflect the change in the corporate tax rate from 35% to 21%. The BPU subsequently approved an interim rate reduction, effective April 1, 2018, to reflect the change in the corporate tax rate under Tax Reform, within SJG's base rates. In September 2018, the BPU granted final approval of SJG's request, including: ◦A final base rate adjustment to reflect an annual revenue reduction of approximately $25.9 million, effective April 1, 2018; ◦A one-time customer refund was issued in October 2018 of approximately $13.8 million, including interest, for over collected tax during the period January 1, 2018 through September 30, 2018; and ◦A customer refund of approximately $27.5 million to return "Unprotected" EDIT to customers through SJG's Rider H over a five-year period effective October 1, 2018. In May 2020, the BPU issued an Order resolving SJG’s 2019 Compliance Filing and 2019 Tax Act Rider petition, with a revised Rider H credit rate effective June 1, 2020. The terms of settlement include the following: •The “Unprotected” EDIT balance of approximately $44.7 million (adjusted from the previously approved level to reclassify certain EDIT from "Protected" to "Unprotected") will be refunded to customers over a 5 year period through the approved rider (which began October 1, 2018); •The net “Protected” EDIT regulatory liability of $149.4 million (regulatory liability of $181.0 million partially offset by a regulatory asset of $31.6 million) will be refunded to customers through a proposed base rate adjustment in SJG’s next base rate case. That next base rate case was the 2020 rate filing and the BPU approved a settlement under which amortization of the net “Protected” EDIT was used to reduce the test year revenue requirement over the remaining book lives of the related assets. In June 2020, in compliance with the September 2018 Order discussed above, SJG submitted its annual Rider H true up filing to modify SJG’s current Rider H credit rate for the period of October 1, 2020 through September 30, 2021. In September 2020, the BPU approved a rate adjustment to SJG’s Rider H credit rate to refund, from October 1, 2020 through September 30, 2021, approximately $14.9 million related to SJG’s "Unprotected" EDIT. Additionally, as part of the approved settlement in its base rate case, SJG will refund an additional $1.9 million associated with the accumulated balance of the amortization of the "Protected" EDIT recognized during the period January 1, 2018 through June 30, 2019. Effective October 1, 2020, this amount will be refunded to customers through the Rider H credit rate over its remaining three-year term. In June 2021, in compliance with the September 2018 Order discussed above, SJG submitted its annual Rider H true-up filing to modify SJG's current Rider H credit rate for the period of October 1, 2021 through September 30, 2022. In its filing, SJG proposed to return $11.6 million to its customers. This matter is pending before the BPU. ETG: Base Rate Case - In April 2019, ETG filed a petition with the BPU requesting a base rate revenue increase to recognize the infrastructure investments made to maintain the safety and reliability of its natural gas system. In November 2019, the BPU issued an Order that permitted ETG to increase base rate revenues by $34.0 million with new rates in effect November 15, 2019. The Order also provides for an after-tax rate of return of approximately 6.5%, with a return on equity of approximately 9.6% and a common equity component of approximately 51.5%. In December 2021, ETG filed a petition with the BPU requesting a base rate revenue increase, which was updated in February 2022 to a requested increase of $72.9 million, primarily to obtain a return on new capital investments made by ETG since the settlement of its last base rate case in 2019. This matter is pending before the BPU. Periodic Rate Mechanisms: Like SJG, ETG's tariff includes several primary rate mechanisms. The current effective rate mechanisms reflected in ETG's tariff, and regulatory actions regarding each for the preceding three years, are described below (filings and petitions described below are still pending, unless otherwise indicated). The approvals for the BGSS and the clauses under the SBC discussed below do not impact ETG's earnings. They represent changes in the cash requirements of ETG corresponding to cost changes and/or previous over/under recoveries from ratepayers associated with each respective mechanism. IIP - Consistent with approval of the ETG/ELK Acquisition, SJI was required to develop a plan, in concert with the BPU and the New Jersey Division of Rate Counsel, to address the replacement of ETG's aging infrastructure. In October 2018, ETG filed an IIP petition with the BPU pursuant to rules adopted by the BPU in December 2017 pertaining to utility infrastructure investments. The IIP petition sought authority to recover the costs associated with ETG's initial investment of approximately $518.0 million from 2019-2023 to, among other things, replace its cast-iron and low-pressure vintage main and related services. The IIP petition included a request for timely recovery of ETG's investment on a semi-annual basis through a separate rate mechanism. In June 2019, the BPU approved a $300.0 million IIP effective July 1, 2019. The Order authorized the recovery of costs associated with ETG’s investments of approximately $300.0 million between 2019-2024 to replace its cast-iron and bare steel vintage main and related services. The Order provides for annual recovery of ETG's investments through a separate rate mechanism. In April 2020, ETG submitted its annual filing, pursuant to the June 2019 BPU approval of the IIP. In July 2020, ETG submitted an updated filing, reflecting rider rates to increase annual revenues by $6.8 million to reflect the roll-in of $63.3 million of IIP investments for the period July 2019 through June 2020. The BPU issued an Order in September 2020 approving the updated IIP rates effective October 1, 2020. In April 2021, ETG submitted its annual filing, pursuant to the June 2019 BPU approval of the IIP. In July 2021, ETG submitted an updated filing, reflecting rider rates to increase annual revenues by $7.1 million to reflect the roll-in of $64.0 million of IIP investments for the period July 2020 through June 2021. The BPU issued an Order in September 2021 approving the updated IIP rates effective October 1, 2021. BGSS Clause - The BGSS for ETG is similar to that of SJG defined above. •March 2020 - The BPU approved ETG's annual BGSS filing in May 2019 to maintain its current BGSS-P rate. As ETG requested to maintain its current rate there was no corresponding increase or decrease in gas cost recoveries requested. This was approved on a provisional basis effective October 1, 2019, and final rates were approved, effective April 1, 2020, with no changes. •June 2020 - ETG submitted its annual BGSS filing. During discovery, ETG updated the rate for a revised request of a $21.1 million decrease in revenues. The BPU issued an Order in September 2020 approving the revised rate decrease on a provisional basis effective October 1, 2020, and final rates were approved, effective July 1, 2021, with no changes. •June 2021 - ETG submitted its annual BGSS filing. In August 2021, ETG updated the requested rate for a revised $11.3 million increase in revenues. The BPU issued an Order in November 2021 approving the revised rate increase on a provisional basis, effective December 1, 2021. In addition, as allowed under the BGSS clause, in November 2021, ETG issued a notice to the BPU of ETG's intent to self-implement a BGSS rate adjustment representing an additional 5% increase of the monthly bill of a typical residential customer, effective December 2021, for a total increase of $19.1 million in revenues. CIP - In April 2021, the BPU approved the implementation of ETG's CIP, which is similar to SJG's discussed above and further discussed below under "EEP." Each CIP year begins on July 1 and ends on June 30 of the subsequent year, with the first year effective July 1, 2021. The CIP replaces the WNC, which is discussed below. EEP - ETG's EEP is similar to SJG's discussed above. ETG has authorization from the BPU to offer its EEP through June 30, 2024 at a total budget of approximately $83.4 million, which allows ETG to recover incremental operating and maintenance expenses and earn a return of, and return on, program investments over a ten-year amortization period. From 2019 through 2021, the following changes occurred related to the recovery of costs and the allowed return on prior investments associated with EEPs: •January 2019 - ETG entered into a stipulation with Board Staff and the New Jersey Division of Rate Counsel extending its EEP through February 29, 2020 at a total budget of approximately $3.0 million. The BPU approved the stipulation in February 2019. •April 2019 - The BPU approved a revenue increase of $1.3 million associated with ETG’s annual EEP rate adjustment filing, effective May 1, 2019. •July 2019 - ETG filed its annual EEP rate adjustment petition, requesting a $1.0 million increase in revenues to continue recovering the costs of, and the allowed return on, investments associated with its EEP. In the first quarter of 2020, the final rate was approved by the BPU, effective April 1, 2020. The final rate reflected a $0.9 million increase in revenues. •In February 2020, the BPU approved ETG's stipulation with the BPU and the New Jersey Division of Rate Counsel extending its EEP through June 2020 under the previously approved budget and from July 2020 through December 2021 at a total budget of approximately $4.2 million. •In July 2020, ETG filed its annual EEP rate adjustment petition, requesting a $0.2 million decrease in revenues related to the recovery of costs of, and the allowed return on, investments associated with its EEPs. In June 2021, the BPU approved the stipulation to resolve ETG's annual EEP filing, effective July 1, 2021. The final rate reflected a $0.5 million decrease in revenues. •In September 2020, ETG filed for a new EEP program to expand its EEPs for three years and also proposed to establish a CIP, similar to SJG’s CIP, which eliminates the link between usage and margin and includes a weather component. In April 2021, the BPU approved the stipulation for ETG's new EEP program to expand its EEPs for three years effective July 1, 2021, authorizing a total budget of $83.4 million which would initially increase annual revenues by $2.8 million. This new EEP program replaces the one previously in effect. In April 2021, the BPU also approved the stipulation to establish a CIP effective July 1, 2021. •In July 2021, ETG filed its annual EEP rate adjustment petition for its legacy EEP programs, requesting a $1.6 million decrease in revenues related to the recovery of costs of, and the allowed return on, investments associated with its EEPs. This matter is pending BPU approval. WNC - The WNC rate allows ETG to implement surcharges or credits during the months of October through May to compensate for weather-related changes in customer usage from the previous winter period. •2019-2020 WNC filing - In September 2019, the BPU approved a $7.8 million decrease in revenues to return a net revenue excess of $1.6 million primarily due to colder than normal weather, effective November 1, 2019. The BPU approved a slightly lower final rate effective April 1, 2020. •2020-2021 WNC filing - In September 2020, the BPU approved a $7.1 million increase in revenues to an annual revenue of $5.5 million to recover a deficiency from warmer than normal weather, effective October 1, 2020. This rate was approved by the BPU as final on February 17, 2021. •2021-2022 WNC filing - In September 2021, the BPU approved an annual revenue increase of $5.5 million to recover a deficiency balance associated with the period ending May 31, 2021 due to warmer than normal weather. This rate was approved by the BPU on a provisional basis effective October 1, 2021. The WNC calculation ended May 31, 2021 and was replaced by the CIP effective July 1, 2021 as further discussed above. SBC - Similar to SJG, the SBC allows ETG to recover costs related to several BPU-mandated programs, including the RAC, the CEP and the USF and LL programs. The RAC is similar to that of SJG defined above, recovering environmental remediation costs of former manufactured gas plants (see Note 15) and resulting in a regulatory asset for the costs that have been incurred but not yet recovered in rates (see Note 11). •May 2019 - The BPU approved ETG's annual RAC filing with the BPU, with a $6.9 million increase in RAC recoveries, effective June 1, 2019. •March 2020 -The BPU approved ETG's annual RAC rate adjustment petition, requesting a $6.0 million increase in revenues, effective April 1, 2020. •March 2021 - The BPU approved ETG's annual RAC rate adjustment petition, with a $3.2 million decrease in revenues, effective April 1, 2021. •November 2021 - The BPU approved ETG's annual RAC rate adjustment petition on a provisional basis, with a $7.9 million decrease in revenues, effective December 1, 2021. The CEP recovers costs associated with ETG’s energy efficiency and renewable energy programs required under the NJCEP. From July 2018 through June 2021, the BPU approved annual NJCEP funding levels of $344.7 million for which ETG's annual responsibility during the timeframe ranged from $10.6 million to $11.5 million. •2019-2020 CEP filing - In September 2019, the BPU approved a $0.1 million decrease in revenues, effective November 1, 2019. •2020-2021 CEP filing - In September 2020, the BPU approved a $3.2 million increase in revenues effective October 1, 2020. •2021-2022 CEP filing - In September 2021, the BPU approved, on a provisional basis, a $0.2 million decrease in revenues effective October 1, 2021. The USF and LL are statewide programs through which funds are collected from customers of all New Jersey electric and gas utilities. Annually, the BPU approves a statewide budget for these programs, as noted within the SJG section above. From 2019-2021, ETG's annual responsibility was between $5.4 million and $9.0 million. ELK: As discussed in Note 1, in December 2019, the Company entered into an agreement to sell ELK to a third-party buyer. This transaction was approved by the MPSC on June 29, 2020. This transaction closed on July 31, 2020.

Base Rate Case - In March 2020, SJG filed a base rate case with the BPU to increase its base rates in order to obtain a return on new capital investments made by SJG since the settlement of its last base rate case in 2017. In September 2020, the BPU approved the settlement of SJG's rate case petition, resulting in an increase in annual revenues from base rates effective October 1, 2020 of $39.5 million, including an approved after-tax rate of return of 6.9%, with a return on equity of 9.6% and a common equity component of 54.0%. Included was recovery of $10.1 million in costs related to a previous project to re-power the former BL England facility with natural gas (see Note 11) and $5.1 million of costs related to the ERIP (see Note 12). These costs are to be amortized over a five year period commencing October 1, 2020.

SJG's tariff, a schedule detailing the terms, conditions and rate information applicable to its various types of natural gas service, as approved by the BPU, has several primary rate mechanisms. The current effective rate mechanisms reflected in SJG’s tariff, and regulatory actions regarding each for the preceding three years, are described below (filings and petitions described below are still pending unless otherwise indicated). The approvals for the BGSS and clauses under the SBC discussed below do not impact SJG's earnings. They represent changes in the cash requirements of SJG corresponding to cost changes and/or previously over/under recoveries from ratepayers associated with each respective mechanism.

BGSS Clause - The BGSS price structure allows SJG to recover all prudently incurred gas costs. Changes to BGSS charges to customers can occur either monthly or periodically (annually). Monthly changes in BGSS charges are applicable to large use customers and are pursuant to a BPU-approved formula based on commodity market prices. Periodic changes in BGSS charges are applicable to lower usage customers, which include all of SJG's residential customers, and those rates are evaluated at least annually by the BPU. However, to some extent, more frequent rate changes to the periodic BGSS are allowed. SJG collects gas costs from customers on a forecasted basis and defers periodic over/under recoveries to the following BGSS year, which runs from October 1 through September 30. If SJG is in a net cumulative undercollected position, gas costs deferrals are reflected on the consolidated balance sheets as a regulatory asset. If SJG is in a net cumulative overcollected position, amounts due back to customers are reflected on the consolidated balance sheets as a regulatory liability. SJG pays interest on net overcollected BGSS balances at the rate of return on rate base utilized by the BPU to set rates in the most recently concluded base rate proceeding.

•2019-2020 BGSS year - In September 2019, the BPU approved, on a provisional basis, a $27.6 million decrease in gas cost recoveries, effective October 1, 2019. This was approved as a final rate in the first quarter of 2020 with no changes from the provisional rate.

•2020-2021 BGSS year - In September 2020, the BPU approved, on a provisional basis, a $59.4 million decrease in gas cost recoveries, effective October 1, 2020 based on SJG's June 2020 BGSS filing. Although SJG's June 2020 BGSS filing included consideration of $22.9 million of costs requested to be recovered over a two-year period related to a previous dispute on a long-term gas supply contract that was settled during 2019 ("supply contract costs"), the provisional rate adjustments effective October 1, 2020 included the temporary removal of these amounts to allow for a further review of these costs during the course of this proceeding. In May 2021, the BPU approved these provisional rates, adjusted for a two-year amortization of the supply contract costs through September 30, 2022 as final effective June 1, 2021.

•2021-2022 BGSS year - In November 2021, the BPU approved, on a provisional basis, a $36.2 million increase in gas cost recoveries, effective December 1, 2021. The approval extended the amortization of the supply contract costs to September 30, 2024. In addition, as allowed under the BGSS clause, in November 2021, SJG issued a notice to the BPU of SJG's intent to self-implement a BGSS rate adjustment representing an additional 5% increase of the monthly bill of a typical residential customer, effective December 1, 2021, for a total increase of $56.6 million in revenues.

CIP - The primary purpose of the CIP is to promote conservation efforts, without negatively impacting financial stability, and to base SJG's profit margin on the number of customers rather than the amount of natural gas distributed to customers. Each CIP year begins October 1 and ends September 30 of the subsequent year. On a monthly basis during the CIP year, SJG records adjustments to earnings based on weather and customer usage factors, as incurred. Subsequent to each year, SJG makes filings with the BPU to review and approve amounts recorded under the CIP. BPU-approved cash inflows or outflows generally will not begin until the next CIP year.

•2019-2020 CIP year - In September 2019, the BPU approved, on a provisional basis, a total $7.6 million net decrease in revenues, which included a $32.3 million decrease in non-weather related revenues and a $24.7 million increase in weather related revenues, effective October 2019. This was approved as a final rate in the first quarter of 2020 with no changes from the provisional rate.

•2020-2021 CIP year - In September 2020, the BPU approved, on a provisional basis, a $27.4 million increase in revenues, effective October 1, 2020, which included a $17.3 million increase in weather-related revenues and a $10.1 million increase in non-weather-related revenues. This was approved as a final rate in the second quarter of 2021 with no changes from the provisional rate.

•2021-2022 CIP year - In November 2021, the BPU approved, on a provisional basis, a $15.3 million decrease in revenues, effective December 1, 2021, which included a $6.5 million decrease in weather-related revenues and a $8.8 million decrease in non-weather related revenues.

AIRP - In October 2016, the BPU approved an extension of the AIRP for a five-year period commencing October 1, 2016 through September 30, 2021, with authorized investments of up to $302.5 million to continue replacing cast iron and unprotected bare steel mains and associated services ("AIRP II"). Pursuant to the Order, AIRP II investments are to be recovered through annual base rate adjustments.

•December 2021 - The BPU approved an increase in annual revenues from base rates of $6.7 million to reflect the roll-in of $69.0 million of AIRP II in service investments for the period July 1, 2020 through September 30, 2021. The AIRP II Program concluded September 30, 2021 and the final rate adjustment for this program became effective January 1, 2022.

SHARP - SHARP replaces low pressure distribution mains and services with high pressure mains and services in coastal areas that are susceptible to flooding during major storm events. SHARP investments are to be recovered through annual base rate adjustments. Phase one of SJG’s initial SHARP expired in June 2017. In May 2018, the BPU approved SJG's petition to continue its storm hardening efforts under a second phase of SHARP ("SHARP II"). SHARP II is a three-year program, with a total investment level of approximately $100.3 million, focused on four system enhancement projects within the coastal regions.

•April 2019 - SJG submitted its first annual filing, pursuant to the May 2018 BPU approval of the SHARP II, seeking a base rate adjustment to increase annual revenues by approximately $3.0 million to reflect the roll-in of approximately $28.3 million of SHARP II investments placed in service during June 1, 2018 through June 30, 2019.

•September 2020 - The BPU approved an increase in annual revenues from base rates of $3.7 million to reflect the roll-in of $33.3 million of SHARP II in service investments for the period July 1, 2019 through June 30, 2020, effective October 1, 2020.

•September 2021 - The BPU approved an increase in annual revenues from base rates of $2.2 million to reflect the roll-in of $22.8 million of SHARP II in service investments for the period July 1, 2020 through June 30, 2021. The SHARP II program ended June 30, 2021 and the final rate adjustment for this program became effective October 1, 2021.

IIP – In November 2020, SJG filed a petition with the BPU, seeking authority to implement an IIP pursuant to which SJG would recover the costs associated with SJG's planned initial investment of approximately $742.5 million from 2021-2026 to, among other things, replace its at-risk plastic and coated steel mains, as well as excess flow valves on new service lines, and related services. This matter is pending before the BPU.

EET - SJG has authorization to recover costs associated with its EEPs through the EET cost recovery mechanism. The EEP rate enables SJG to recover the costs of its EEP as authorized by the BPU. SJG’s EEP consists of a range of rebates and related offers, including, for example, various customer education and outreach initiatives, as well as an on-line customer dashboard, that are designed to encourage customers to conserve energy and to provide them with information on how to lower their gas bills. In October 2018, the BPU approved the continuation of SJG's existing EEPs with modifications, and to implement several new EEPs for a period of three years (the "EEP IV"), with a total budget of $81.3 million and a revenue increase of $3.5 million, effective November 1, 2018, which allow SJG to recover incremental operating and maintenance expenses and earn a return of, and return on, program investments over a seven-year amortization period. From 2019 through 2021, the following changes occurred related to the recovery of costs and the allowed return of, and on, prior investments associated with EET/EEPs:

In addition, in September 2020, SJG filed a petition seeking authorization to implement new EEPs, commencing July 1, 2021 (the "EEP V"). SJG’s petition included a request to recover, in the first year, $6.3 million in revenues. In April 2021, the BPU approved SJG's continuation of several of SJG's existing EEPs with modifications. It also approved SJG's implementation of EEP V for a period of three years, with a total budget of $133.3 million and a revenue increase of $5.4 million, effective July 1, 2021. This approval allows SJG to recover incremental operating and maintenance expenses and earns a return of, and return on, program investments over a ten-year amortization period.

SBC - The SBC allows SJG to recover costs related to several BPU-mandated programs. Within the SBC are the RAC, the CLEP and the USF and LL programs. The USF and LL programs require a separate annual regulatory filing while annual adjustments for the RAC and CLEP programs are the subject of our annual SBC filings discussed below.

The RAC recovers environmental remediation costs of 12 former gas manufacturing plants (see Note 15). The BPU allows SJG to recover such costs over seven-year amortization periods, resulting in a regulatory asset for the costs that have been incurred but not yet recovered in rates (see Note 11).

The CLEP recovers costs associated with SJG’s energy efficiency and renewable energy programs required under the NJCEP. From July 2018 through July 2021, the BPU approved annual NJCEP funding levels of $344.7 million for which SJG’s annual responsibility during the timeframe ranged from $12.7 million to $13.2 million.

The USF and LL are statewide programs which are funded from collections from customers of all New Jersey electric and gas utilities. From 2018-2021, the BPU approved statewide USF and LL annual budgets for all NJ gas utilities ranging from $45.6 million to $80.3 million, of which SJG’s annual responsibility during that timeframe was between $5.5 million and $9.6 million.

Unbundling - This allows all natural gas consumers to select their natural gas commodity supplier. As of December 31, 2021, 19,793 of SJG's customers were purchasing their gas commodity from someone other than SJG. Customers choosing to purchase natural gas from providers other than the utility are charged for the cost of gas by the marketer. While customer choice can reduce utility revenues, it does not negatively affect SJG's net income or financial condition as the resulting decrease in utility revenues is offset by a corresponding decrease in gas costs. The BPU continues to allow for full recovery of prudently incurred natural gas costs through the BGSS. Unbundling did not change the fact that SJG still recovers cost of service, including certain deferred costs, through base rates.

Pipeline Integrity Costs - SJG is permitted to defer and recover incremental costs incurred as a result of Pipeline Integrity Management regulations, which are aimed at enhancing public safety and reliability. The regulations require that utilities use a comprehensive analysis to assess, evaluate, repair and validate the integrity of certain transmission lines in the event of a leak or failure. SJG is authorized to defer future program costs, including related carrying costs, for recovery in the next base rate case proceeding, subject to review by the BPU.

Tax Reform - In response to the implementation of Tax Reform, in March 2018, SJG filed a petition with the BPU for a change within base rates, a customer refund, and the introduction of a rider ("Rider H") to reflect the change in the corporate tax rate from 35% to 21%. The BPU subsequently approved an interim rate reduction, effective April 1, 2018, to reflect the change in the corporate tax rate under Tax Reform, within SJG's base rates. In September 2018, the BPU granted final approval of SJG's request, including:

•The “Unprotected” EDIT balance of approximately $44.7 million (adjusted from the previously approved level to reclassify certain EDIT from "Protected" to "Unprotected") will be refunded to customers over a 5 year period through the approved rider (which began October 1, 2018);

•The net “Protected” EDIT regulatory liability of $149.4 million (regulatory liability of $181.0 million partially offset by a regulatory asset of $31.6 million) will be refunded to customers through a proposed base rate adjustment in SJG’s next base rate case. That next base rate case was the 2020 rate filing and the BPU approved a settlement under which amortization of the net “Protected” EDIT was used to reduce the test year revenue requirement over the remaining book lives of the related assets.

settlement in its base rate case, SJG will refund an additional $1.9 million associated with the accumulated balance of the amortization of the "Protected" EDIT recognized during the period January 1, 2018 through June 30, 2019. Effective October 1, 2020, this amount will be refunded to customers through the Rider H credit rate over its remaining three-year term.

In June 2021, in compliance with the September 2018 Order discussed above, SJG submitted its annual Rider H true-up filing to modify SJG's current Rider H credit rate for the period of October 1, 2021 through September 30, 2022. In its filing, SJG proposed to return $11.6 million to its customers. This matter is pending before the BPU.

Base Rate Case - In April 2019, ETG filed a petition with the BPU requesting a base rate revenue increase to recognize the infrastructure investments made to maintain the safety and reliability of its natural gas system. In November 2019, the BPU issued an Order that permitted ETG to increase base rate revenues by $34.0 million with new rates in effect November 15, 2019. The Order also provides for an after-tax rate of return of approximately 6.5%, with a return on equity of approximately 9.6% and a common equity component of approximately 51.5%.

In December 2021, ETG filed a petition with the BPU requesting a base rate revenue increase, which was updated in February 2022 to a requested increase of $72.9 million, primarily to obtain a return on new capital investments made by ETG since the settlement of its last base rate case in 2019. This matter is pending before the BPU.

Like SJG, ETG's tariff includes several primary rate mechanisms. The current effective rate mechanisms reflected in ETG's tariff, and regulatory actions regarding each for the preceding three years, are described below (filings and petitions described below are still pending, unless otherwise indicated). The approvals for the BGSS and the clauses under the SBC discussed below do not impact ETG's earnings. They represent changes in the cash requirements of ETG corresponding to cost changes and/or previous over/under recoveries from ratepayers associated with each respective mechanism.

IIP - Consistent with approval of the ETG/ELK Acquisition, SJI was required to develop a plan, in concert with the BPU and the New Jersey Division of Rate Counsel, to address the replacement of ETG's aging infrastructure. In October 2018, ETG filed an IIP petition with the BPU pursuant to rules adopted by the BPU in December 2017 pertaining to utility infrastructure investments. The IIP petition sought authority to recover the costs associated with ETG's initial investment of approximately $518.0 million from 2019-2023 to, among other things, replace its cast-iron and low-pressure vintage main and related services. The IIP petition included a request for timely recovery of ETG's investment on a semi-annual basis through a separate rate mechanism.

In June 2019, the BPU approved a $300.0 million IIP effective July 1, 2019. The Order authorized the recovery of costs associated with ETG’s investments of approximately $300.0 million between 2019-2024 to replace its cast-iron and bare steel vintage main and related services. The Order provides for annual recovery of ETG's investments through a separate rate mechanism.

In April 2020, ETG submitted its annual filing, pursuant to the June 2019 BPU approval of the IIP. In July 2020, ETG submitted an updated filing, reflecting rider rates to increase annual revenues by $6.8 million to reflect the roll-in of $63.3 million of IIP investments for the period July 2019 through June 2020. The BPU issued an Order in September 2020 approving the updated IIP rates effective October 1, 2020.

In April 2021, ETG submitted its annual filing, pursuant to the June 2019 BPU approval of the IIP. In July 2021, ETG submitted an updated filing, reflecting rider rates to increase annual revenues by $7.1 million to reflect the roll-in of $64.0 million of IIP investments for the period July 2020 through June 2021. The BPU issued an Order in September 2021 approving the updated IIP rates effective October 1, 2021.

•March 2020 - The BPU approved ETG's annual BGSS filing in May 2019 to maintain its current BGSS-P rate. As ETG requested to maintain its current rate there was no corresponding increase or decrease in gas cost recoveries requested. This was approved on a provisional basis effective October 1, 2019, and final rates were approved, effective April 1, 2020, with no changes.

•June 2021 - ETG submitted its annual BGSS filing. In August 2021, ETG updated the requested rate for a revised $11.3 million increase in revenues. The BPU issued an Order in November 2021 approving the revised rate increase on a provisional basis, effective December 1, 2021. In addition, as allowed under the BGSS clause, in November 2021, ETG issued a notice to the BPU of ETG's intent to self-implement a BGSS rate adjustment representing an additional 5% increase of the monthly bill of a typical residential customer, effective December 2021, for a total increase of $19.1 million in revenues.

CIP - In April 2021, the BPU approved the implementation of ETG's CIP, which is similar to SJG's discussed above and further discussed below under "EEP." Each CIP year begins on July 1 and ends on June 30 of the subsequent year, with the first year effective July 1, 2021. The CIP replaces the WNC, which is discussed below.

EEP - ETG's EEP is similar to SJG's discussed above. ETG has authorization from the BPU to offer its EEP through June 30, 2024 at a total budget of approximately $83.4 million, which allows ETG to recover incremental operating and maintenance expenses and earn a return of, and return on, program investments over a ten-year amortization period. From 2019 through 2021, the following changes occurred related to the recovery of costs and the allowed return on prior investments associated with EEPs:

•January 2019 - ETG entered into a stipulation with Board Staff and the New Jersey Division of Rate Counsel extending its EEP through February 29, 2020 at a total budget of approximately $3.0 million. The BPU approved the stipulation in February 2019.

•July 2019 - ETG filed its annual EEP rate adjustment petition, requesting a $1.0 million increase in revenues to continue recovering the costs of, and the allowed return on, investments associated with its EEP. In the first quarter of 2020, the final rate was approved by the BPU, effective April 1, 2020. The final rate reflected a $0.9 million increase in revenues.

•In February 2020, the BPU approved ETG's stipulation with the BPU and the New Jersey Division of Rate Counsel extending its EEP through June 2020 under the previously approved budget and from July 2020 through December 2021 at a total budget of approximately $4.2 million.

•In July 2020, ETG filed its annual EEP rate adjustment petition, requesting a $0.2 million decrease in revenues related to the recovery of costs of, and the allowed return on, investments associated with its EEPs. In June 2021, the BPU approved the stipulation to resolve ETG's annual EEP filing, effective July 1, 2021. The final rate reflected a $0.5 million decrease in revenues.

•In September 2020, ETG filed for a new EEP program to expand its EEPs for three years and also proposed to establish a CIP, similar to SJG’s CIP, which eliminates the link between usage and margin and includes a weather component. In April 2021, the BPU approved the stipulation for ETG's new EEP program to expand its EEPs for three years effective July 1, 2021, authorizing a total budget of $83.4 million which would initially increase annual revenues by $2.8 million. This new EEP program replaces the one previously in effect. In April 2021, the BPU also approved the stipulation to establish a CIP effective July 1, 2021.

•In July 2021, ETG filed its annual EEP rate adjustment petition for its legacy EEP programs, requesting a $1.6 million decrease in revenues related to the recovery of costs of, and the allowed return on, investments associated with its EEPs. This matter is pending BPU approval.

•2019-2020 WNC filing - In September 2019, the BPU approved a $7.8 million decrease in revenues to return a net revenue excess of $1.6 million primarily due to colder than normal weather, effective November 1, 2019. The BPU approved a slightly lower final rate effective April 1, 2020.

•2020-2021 WNC filing - In September 2020, the BPU approved a $7.1 million increase in revenues to an annual revenue of $5.5 million to recover a deficiency from warmer than normal weather, effective October 1, 2020. This rate was approved by the BPU as final on February 17, 2021.

•2021-2022 WNC filing - In September 2021, the BPU approved an annual revenue increase of $5.5 million to recover a deficiency balance associated with the period ending May 31, 2021 due to warmer than normal weather. This rate was approved by the BPU on a provisional basis effective October 1, 2021. The WNC calculation ended May 31, 2021 and was replaced by the CIP effective July 1, 2021 as further discussed above.

The RAC is similar to that of SJG defined above, recovering environmental remediation costs of former manufactured gas plants (see Note 15) and resulting in a regulatory asset for the costs that have been incurred but not yet recovered in rates (see Note 11).

The CEP recovers costs associated with ETG’s energy efficiency and renewable energy programs required under the NJCEP. From July 2018 through June 2021, the BPU approved annual NJCEP funding levels of $344.7 million for which ETG's annual responsibility during the timeframe ranged from $10.6 million to $11.5 million.

The USF and LL are statewide programs through which funds are collected from customers of all New Jersey electric and gas utilities. Annually, the BPU approves a statewide budget for these programs, as noted within the SJG section above. From 2019-2021, ETG's annual responsibility was between $5.4 million and $9.0 million.