REVENUE

3 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

3. REVENUE

Revenue is recognized when a performance obligation is satisfied by transferring control of a product or service to a customer. Revenue is measured based on consideration specified in a contract with a customer using the output method of progress. The Company elected to apply the invoice practical expedient for recognizing revenue, whereby the amounts invoiced to customers represent the value to the customer and the Company’s performance completion as of the invoice date. Therefore, the Company does not disclose related unsatisfied performance obligations. The Company also elected the practical expedient to exclude from the transaction price all sales taxes that are assessed by a governmental authority and therefore presents sales tax net in operating revenues on the Unaudited Condensed Consolidated Statements of Operations.

Below is a listing of performance obligations that arise from contracts with customers, along with details on the satisfaction of each performance obligation, the significant payment terms and the nature of the goods and services being transferred, by reporting segment and other business operations:



Revenue Recognized Over Time:
Segment	Performance Obligation	Description
Natural Gas Distribution	Natural gas utility sales	NJNG's performance obligation is to provide natural gas to residential, commercial and industrial customers as demanded, based on regulated tariff rates, which are established by the BPU. Revenues from the sale of natural gas are recognized in the period that gas is delivered and consumed by customers, including an estimate for quantities consumed but not billed during the period. Payment is due each month for the previous month's deliveries. Natural gas sales to individual customers are based on meter readings, which are performed on a systematic basis throughout the billing period. The unbilled revenue estimates are based on estimated customer usage by customer type, weather effects and the most current tariff rates. NJNG is entitled to be compensated for performance completed until service is terminated. Customers may elect to purchase the natural gas commodity from NJNG or may contract separately to purchase natural gas directly from third-party suppliers. As NJNG is acting as an agent on behalf of the third party supplier, revenue is recorded for the delivery of natural gas to the customer.
Clean Energy Ventures	Commercial solar and wind electricity	Clean Energy Ventures operates wholly-owned solar projects that recognize revenue as electricity is generated and transferred to the customer. The performance obligation is to provide electricity to the customer in accordance with contract terms or the interconnection agreement and is satisfied upon transfer of electricity generated. All wind assets were sold as of February 2019. Revenue is recognized as invoiced and the payment is due each month for the previous month's services.
Clean Energy Ventures	Residential solar electricity	Clean Energy Ventures provides access to residential rooftop and ground-mount solar equipment to customers who then pay the Company a monthly fee. The performance obligation is to provide electricity to the customer based on generation from the underlying residential solar asset and is satisfied upon transfer of electricity generated. Revenue is derived from the contract terms and is recognized as invoiced, with the payment due each month for the previous month's services.
Energy Services	Natural gas services	The performance obligation of Energy Services is to provide the customer transportation, storage and asset management services on an as-needed basis. Energy Services generates revenue through management fees, demand charges, reservation fees and transportation charges centered around the buying and selling of the natural gas commodity, representing one series of distinct performance obligations. Revenue is recognized based upon the underlying natural gas quantities physically delivered and the customer obtaining control. Energy Services invoices customers on a monthly basis in line with the terms of the contract and based on the services provided. Payment is due each month for the previous month's invoiced services.
Midstream	Natural gas services	The performance obligation of Midstream is to provide the customer with storage and transportation services. Midstream generates revenues from firm storage contracts, related usage fees for the use of storage space, injection and withdrawal at the storage facility. Demand fees are recognized as revenue over the term of the related storage agreement.
Home Services and Other	Service contracts	Home Services enters into service contracts with homeowners to provide maintenance and replacement services of applicable heating, cooling or ventilation equipment. All services provided relate to a distinct performance obligation which is to provide services for the specific equipment over the term of the contract. Revenue is recognized on a straight-line basis over the term of the contract and payment is due upon receipt of the invoice.



Revenue Recognized at a Point in Time:
Midstream	Natural gas services	The performance obligation of Midstream is to provide the customer with storage and transportation services. Midstream generates revenues from hub services for the use of storage space, injection and withdrawal from the storage facility. Hub services include parks, loans and wheeling. Hub services revenues are recognized as services are performed.
Home Services and Other	Installations	Home Services installs appliances, including but not limited to, furnaces, air conditioning units, boilers and generators to customers. The distinct performance obligation is the installation of the contracted appliance, which is satisfied at the point in time the item is installed. The transaction price for each installation differs accordingly. Revenue is recognition at a point in time upon completion of the installation, which is when the customer is billed.

Disaggregated revenues from contracts with customers by product line and by reporting segment and other business operations during the three months ended December 31, 2019, is as follows:



(Thousands)	Natural Gas Distribution			Clean Energy Ventures	Energy Services		Midstream		Home Services and Other		Total
2019
Natural gas utility sales	$	219,894		—	—		—		—		$	219,894
Natural gas services	—			—	7,321		9,072		—		16,393
Service contracts	—			—	—		—		8,038		8,038
Installations and maintenance	—			—	—		—		4,869		4,869
Electricity sales	—			4,018	—		—		—		4,018
Eliminations⁽¹⁾	—			—	—		(667	)	(415	)	(1,082		)
Revenues from contracts with customers	219,894			4,018	7,321		8,405		12,492		252,130
Alternative revenue programs	(1,943		)	—	—		—		—		(1,943		)
Derivative Instruments	1,672			2,194	363,094		—		—		366,960
Eliminations⁽¹⁾	—			—	(2,111	)	—		—		(2,111		)
Revenues out of scope	(271		)	2,194	360,983		—		—		362,906
Total operating revenues	$	219,623		6,212	368,304		8,405		12,492		$	615,036

2018
Natural gas utility sales	$	194,983		—	—		—		—		$	194,983
Natural gas services	—			—	10,080		—		—		10,080
Service contracts	—			—	—		—		7,796		7,796
Installations and maintenance	—			—	—		—		4,694		4,694
Electricity sales	—			7,141	—		—		—		7,141
Eliminations⁽¹⁾	—			—	—		—		(545	)	(545		)
Revenues from contracts with customers	194,983			7,141	10,080		—		11,945		224,149
Alternative revenue programs	(867		)	—	—		—		—		(867		)
Derivative Instruments	5,849			7,756	577,187		—		—		590,792
Eliminations⁽¹⁾	—			—	(2,307	)	—		—		(2,307		)
Revenues out of scope	4,982			7,756	574,880		—		—		587,618
Total operating revenues	$	199,965		14,897	584,960		—		11,945		$	811,767


(1)	Consists of transactions between subsidiaries that are eliminated in consolidation.

Disaggregated revenues from contracts with customers by customer type and by reporting segment and other business operations during the three months ended December 31, 2019, is as follows:



(Thousands)	Natural Gas Distribution			Clean Energy Ventures	Energy Services	Midstream	Home Services and Other	Total
2019
Residential	$	153,222		2,460	—	—	12,279	$	167,961
Commercial and industrial	45,422			1,558	7,321	8,405	213	62,919
Firm transportation	19,589			—	—	—	—	19,589
Interruptible and off-tariff	1,661			—	—	—	—	1,661
Revenues out of scope	(271		)	2,194	360,983	—	—	362,906
Total operating revenues	$	219,623		6,212	368,304	8,405	12,492	$	615,036

2018
Residential	$	133,690		2,132	—	—	11,717	$	147,539
Commercial and industrial	40,728			5,009	10,080	—	228	56,045
Firm transportation	18,934			—	—	—	—	18,934
Interruptible and off-tariff	1,631			—	—	—	—	1,631
Revenues out of scope	4,982			7,756	574,880	—	—	587,618
Total operating revenues	$	199,965		14,897	584,960	—	11,945	$	811,767

Customer Accounts Receivable/Credit Balances and Deposits

The timing of revenue recognition, customer billings and cash collections resulting in accounts receivables, billed and unbilled, and customers’ credit balances and deposits on the Unaudited Condensed Consolidated Balance Sheets during the three months ended December 31, 2019, are as follows:



	Customer Accounts Receivable				Customers' Credit
(Thousands)	Billed		Unbilled		Balances and Deposits
Balance as of October 1, 2019	$	139,263	$	6,510	$	27,116
Increase	111,156		57,146		2,457
Balance as of December 31, 2019	$	250,419	$	63,656	$	29,573

The following table provides information about receivables and revenue earned on contracts in progress in excess of billings, which are included within accounts receivable, billed and unbilled, and customers’ credit balances and deposits, respectively, on the Unaudited Condensed Consolidated Balance Sheets as of December 31:



(Thousands)	Natural Gas Distribution			Clean Energy Ventures	Energy Services	Midstream	Home Services and Other	Eliminations		Total
2019
Customer accounts receivable
Billed	$	78,365		3,059	164,688	2,727	2,355	(775	)	$	250,419
Unbilled	63,656			—	—	—	—	—		63,656
Customers' credit balances and deposits	(29,573		)	—	—	—	—	—		(29,573		)
Total	$	112,448		3,059	164,688	2,727	2,355	(775	)	$	284,502