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DERIVATIVE INSTRUMENTS (Tables)
 6 Months Ended
Mar. 31, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value
The following table reflects the fair value of NJR's derivative assets and liabilities recognized on the Unaudited Condensed Consolidated Balance Sheets as of:
 
 
 
Fair Value
 
 
 
March 31, 2014
 
September 30, 2013
(Thousands)
Balance Sheet Location
Asset
Derivatives
Liability
Derivatives
Asset
Derivatives
Liability
Derivatives
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
NJRES:
 
 
 
 
 
 
 
 
 
Foreign currency contracts
Derivatives - current
 
$
—

 
$
277

 
$
16

 
$
3

 
Derivatives - noncurrent
 
—

 
7

 
—

 
2

Fair value of derivatives designated as hedging instruments
 
$
—

 
$
284

 
$
16

 
$
5

 
 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
NJNG:
 
 
 
 
 
 
 
 
 
Financial derivative contracts
Derivatives - current
 
$
15,387

 
$
998

 
$
3,502

 
$
2,045

 
Derivatives - noncurrent
 
—

 
—

 
121

 
140

NJRES:
 
 
 
 
 
 
 
 
 
Physical forward commodity contracts
Derivatives - current
 
5,634

 
35,568

 
11,282

 
14,573

 
Derivatives - noncurrent
 
197

 
111

 
541

 
22

Financial derivative contracts
Derivatives - current
 
24,161

 
34,380

 
38,527

 
23,769

 
Derivatives - noncurrent
 
2,073

 
5,074

 
2,099

 
2,294

Fair value of derivatives not designated as hedging instruments
 
$
47,452

 
$
76,131

 
$
56,072

 
$
42,843

Total fair value of derivatives
 
 
$
47,452

 
$
76,415

 
$
56,088

 
$
42,848
Offsetting Assets and Liabilities
The tables below summarize the reported gross amounts, the amounts that NJR has the right to offset but elects not to, financial collateral, as well as the net amounts NJR could present in the Unaudited Condensed Consolidated Balance Sheets but elects not to.
(Thousands)
Amounts Presented in Balance Sheets (1)
Offsetting Derivative Instruments (2)
Financial Collateral Received/Pledged (3)
Net Amounts (4)
As of March 31, 2014:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
NJRES
 
 
 
 
 
 
 
 
Physical forward commodity contracts
 
$
5,831

 
$
(2,190
)
 
$
—

 
$
3,641

Financial commodity contracts
 
26,234

 
(26,234
)
 
—

 
—

Foreign currency contracts
 
—

 
—

 
—

 
—

Total NJRES
 
$
32,065

 
$
(28,424
)
 
$
—

 
$
3,641

NJNG
 
 
 
 
 
 
 
 
Financial commodity contracts
 
$
15,387

 
$
(998
)
 
$
(10,772
)
 
$
3,617

Derivative liabilities:
 
 
 
 
 
 
 
 
NJRES
 
 
 
 
 
 
 
 
Physical forward commodity contracts
 
$
35,679

 
$
(2,371
)
 
$
(500
)
 
$
32,808

Financial commodity contracts
 
39,454

 
(26,233
)
 
(13,221
)
 
—

Foreign currency contracts
 
284

 
—

 
—

 
284

Total NJRES
 
$
75,417

 
$
(28,604
)
 
$
(13,721
)
 
$
33,092

NJNG
 
 
 
 
 
 
 
 
Financial commodity contracts
 
$
998

 
$
(998
)
 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
As of September 30, 2013:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
NJRES
 
 
 
 
 
 
 
 
Physical forward commodity contracts
 
$
11,823

 
$
(3,549
)
 
$
(100
)
 
$
8,174

Financial commodity contracts
 
40,626

 
(26,063
)
 
6,870

 
21,433

Foreign currency contracts
 
16

 
(5
)
 
—

 
11

Total NJRES
 
$
52,465

 
$
(29,617
)
 
$
6,770

 
$
29,618

NJNG
 
 
 
 
 
 
 
 
Financial commodity contracts
 
$
3,623

 
$
(2,185
)
 
$
214

 
$
1,652

Derivative liabilities:
 
 
 
 
 
 
 
 
NJRES
 
 
 
 
 
 
 
 
Physical forward commodity contracts
 
$
14,595

 
$
(3,549
)
 
$
(500
)
 
$
10,546

Financial commodity contracts
 
26,063

 
(26,063
)
 
—

 
—

Foreign currency contracts
 
5

 
(5
)
 
—

 
—

Total NJRES
 
$
40,663

 
$
(29,617
)
 
$
(500
)
 
$
10,546

NJNG
 
 
 
 
 
 
 
 
Financial commodity contracts
 
$
2,185

 
$
(2,185
)
 
$
—

 
$
—

(1)
Derivative assets and liabilities are presented on a gross basis in the balance sheet as the Company does not elect balance sheet offsetting under ASC 210-20.
(2)
Offsetting derivative instruments include: transactions with NAESB netting election, transactions held by FCM's with net margining and transactions with ISDA netting.
(3)
Financial collateral includes cash balances at FCM's as well as cash received from or pledged to other counterparties.
(4)
Net amounts represent presentation of derivative assets and liabilities if the Company were to elect balance sheet offsetting under ASC 210-20.
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location
The following table reflects the effect of derivative instruments on the Unaudited Condensed Consolidated Statements of Operations as of:
(Thousands)
Location of gain (loss) recognized in income on derivatives
Amount of gain (loss) recognized
in income on derivatives
 
 
Three Months Ended
Six Months Ended
 
 
March 31,
March 31,
Derivatives not designated as hedging instruments:
2014
 
2013
2014
 
2013
NJRES:
 
 
 
 
 
 
 
Physical commodity contracts
Operating revenues
$
(57,916
)
 
$
(2,224
)
$
(57,998
)
 
$
(7,859
)
Physical commodity contracts
Gas purchases
(54,481
)
 
2,762

(79,474
)
 
2,556

Financial derivative contracts
Gas purchases
(101,629
)
 
(30,669
)
(141,699
)
 
(1,467
)
Total unrealized and realized (losses)
$
(214,026
)
 
$
(30,131
)
$
(279,171
)
 
$
(6,770
)
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance
The following tables reflect the effect of derivative instruments designated as cash flow hedges on OCI as of March 31:
(Thousands)
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)
Amount of Gain or (Loss) Reclassified from OCI into Income (Effective Portion)
Amount of Gain or (Loss) Recognized on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
 
Three Months Ended
Three Months Ended
Three Months Ended
 
March 31,
March 31,
March 31,
Derivatives in cash flow hedging relationships:
2014
2013
2014
2013
2014
2013
Foreign currency contracts
$
(309
)
$
24

$
68

$
(35
)
$
—

$
—


(Thousands)
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) (1)
Amount of Gain or (Loss) Reclassified from OCI into Income (Effective Portion)
Amount of Gain or (Loss) Recognized on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
 
Six Months Ended
Six Months Ended
Six Months Ended
 
March 31,
March 31,
March 31,
Derivatives in cash flow hedging relationships:
2014
2013
2014
2013
2014
2013
Foreign currency contracts
$
(460
)
$
(71
)
$
165

$
44

$
—

$
—

(1)
The settlement of foreign currency transactions over the next twelve months is expected to result in the reclassification of $277,000 from OCI into earnings. The maximum tenor is April 2015
Schedule of Derivative Instruments
NJNG and NJRES had the following outstanding long (short) derivatives as of:
 
 
 
Volume (Bcf)
 
 
 
March 31,
2014
September 30,
2013
NJNG
Futures
 
27.5

22.6

NJRES
Futures
 
(20.9
)
(64.2
)
 
Options
 
—

1.5

 
Physical
 
31.0

7.3
Schedule of Due to (from) Broker-Dealers and Clearing Organizations
The balances by company, are as follows:
(Thousands)
Balance Sheet Location
March 31,
2014
September 30,
2013
NJNG
Broker margin - Current assets
$
—

$
213

NJNG
Broker margin - Current (liabilities)
$
(10,573
)
$
—

NJRES
Broker margin - Current assets
$
38,490

$
6,368
Schedules of Concentration of Risk, by Risk Factor
The following is a summary of gross credit exposures grouped by investment and noninvestment grade counterparties, as of March 31, 2014. Internally-rated exposure applies to counterparties that are not rated by S&P or Moody's. In these cases, the Company's or guarantor's financial statements are reviewed, and similar methodologies and ratios used by S&P and/or Moody's are applied to arrive at a substitute rating. Gross credit exposure is defined as the unrealized fair value of physical and financial derivative commodity contracts, plus any outstanding wholesale receivable for the value of natural gas delivered and/or financial derivative commodity contract that has settled for which payment has not yet been received. The amounts presented below have not been reduced by any collateral received or netting and exclude accounts receivable for NJNG retail natural gas sales and services.
(Thousands)
Gross Credit Exposure
Investment grade
 
$
299,185

 
Noninvestment grade
 
6,104

 
Internally rated investment grade
 
43,953

 
Internally rated noninvestment grade
 
27,356

 
Total
 
$
376,598