DEBT

12 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

DEBT

9. DEBT

NJNG and NJR finance working capital requirements and capital expenditures through various short-term debt and long-term financing arrangements, including a commercial paper program and committed unsecured credit facilities.

Long-term Debt

The following table presents the long-term debt of the Company as of September 30:

(Thousands)			2022		2021
NJNG
First mortgage bonds:		Maturity date:
3.00%	Series OO	August 1, 2041	46,500		46,500
3.15%	Series PP	April 15, 2028	50,000		50,000
3.58%	Series QQ	March 13, 2024	70,000		70,000
4.61%	Series RR	March 13, 2044	55,000		55,000
2.82%	Series SS	April 15, 2025	50,000		50,000
3.66%	Series TT	April 15, 2045	100,000		100,000
3.63%	Series UU	June 21, 2046	125,000		125,000
4.01%	Series VV	May 11, 2048	125,000		125,000
3.50%	Series WW	April 1, 2042	10,300		10,300
3.38%	Series XX	April 1, 2038	10,500		10,500
2.45%	Series YY	April 1, 2059	15,000		15,000
3.76%	Series ZZ	July 17, 2049	100,000		100,000
3.86%	Series AAA	July 17, 2059	85,000		85,000
2.75%	Series BBB	August 1, 2039	9,545		9,545
3.00%	Series CCC	August 1, 2043	41,000		41,000
3.13%	Series DDD	June 30, 2050	50,000		50,000
3.13%	Series EEE	July 23, 2050	50,000		50,000
3.33%	Series FFF	July 23, 2060	25,000		25,000
2.87%	Series GGG	September 1, 2050	25,000		25,000
2.97%	Series HHH	September 1, 2060	50,000		50,000
2.97%	Series III	October 28, 2051	50,000		—
3.07%	Series JJJ	October 28, 2061	50,000		—
4.37%	Series LLL	May 27, 2037	50,000		—
4.71%	Series MMM	May 27, 2052	50,000		—
Finance lease obligation-meters		Various dates	30,290		20,135
Less: Debt issuance costs			(9,528)		(9,093)
Less: Current maturities of long-term debt			(6,538)		(5,393)
Total NJNG long-term debt			1,307,069		1,098,494
NJR
3.25%	Unsecured senior notes	September 17, 2022	—		50,000
3.20%	Unsecured senior notes	August 18, 2023	50,000		50,000
3.48%	Unsecured senior notes	November 7, 2024	100,000		100,000
3.54%	Unsecured senior notes	August 18, 2026	100,000		100,000
3.96%	Unsecured senior notes	June 8, 2028	100,000		100,000
3.29%	Unsecured senior notes	July 17, 2029	150,000		150,000
3.60%	Unsecured senior notes	July 23, 2032	130,000		130,000
3.50%	Unsecured senior notes	July 23, 2030	130,000		130,000
3.25%	Unsecured senior notes	September 1, 2033	80,000		80,000
3.13%	Unsecured senior notes	September 1, 2031	120,000		120,000
4.38%	Unsecured senior notes	June 23, 2027	110,000		—
3.64%	Unsecured senior notes	September 19, 2034	50,000		—
Less: Debt issuance costs			(3,753)		(3,269)
Less: Current maturities of long-term debt			(50,000)		(50,000)
Total NJR long-term debt			1,066,247		956,731
Clean Energy Ventures
Solar asset financing obligation		Various dates	130,618		124,387
Less: Current maturities of long-term debt			(18,532)		(17,448)
Total Clean Energy Ventures long-term debt			112,086		106,939
Total long-term debt			$	2,485,402	$	2,162,164

Annual long-term debt redemption requirements, excluding finance leases, debt issuance costs and solar asset financing obligations, as of September 30, are as follows:

(Thousands)	NJR		NJNG
2023	$	50,000	$	—
2024	$	—	$	70,000
2025	$	100,000	$	50,000
2026	$	100,000	$	—
2027	$	110,000	$	—
Thereafter	$	760,000	$	1,172,845

NJR

On June 23, 2022, NJR entered into a Note Purchase Agreement under which NJR issued $110 million, Series 2022A senior notes at a fixed rate of 4.38 percent, maturing in 2027. On September 16, 2022, NJR entered into another Note Purchase Agreement under which NJR issued $50 million, Series C senior notes at a fixed rate of 3.64 percent, maturing in 2034. The senior notes are unsecured and guaranteed by certain unregulated subsidiaries of NJR.

NJNG

First Mortgage Bonds

NJNG and Trustee entered into the Mortgage Indenture, dated September 1, 2014, which secures all of the outstanding FMBs issued by NJNG. The Mortgage Indenture provides a direct first mortgage lien upon substantially all of the operating properties and franchises of NJNG (other than excepted property, such as cash on hand, choses-in-action, securities, rent, natural gas meters and certain materials, supplies, appliances and vehicles), subject only to certain permitted encumbrances. The Mortgage Indenture contains provisions subjecting after-acquired property (other than excepted property and subject to pre-existing liens, if any, at the time of acquisition) to the lien thereof.

NJNG’s Mortgage Indenture does not restrict NJNG’s ability to pay dividends. New Jersey Administrative Code 14:4-4.7 states that a public utility cannot issue dividends, without regulatory approval, if its equity-to-total-capitalization ratio falls below 30 percent. As of September 30, 2022, NJNG’s equity-to-total-capitalization ratio is 53.7 percent and NJNG has the capacity to issue up to $1.3 billion of FMB under the terms of the Mortgage Indenture.

On October 28, 2021, NJNG entered into a Note Purchase Agreement for $100 million of its senior notes, of which $50 million were issued at an interest rate of 2.97 percent, maturing in 2051, and $50 million were issued at an interest rate of 3.07 percent, maturing in 2061.

On May 27, 2022, NJNG entered into a Note Purchase Agreement for $100 million of its senior notes, of which $50 million were issued at an interest rate of 4.37 percent, maturing in 2037, and $50 million were issued at an interest rate of 4.71 percent, maturing in 2052.

On October 24, 2022, NJNG entered into a Note Purchase Agreement for $125 million of its senior notes at an interest rate of 5.47 percent, maturing in 2052.

The senior notes are secured by an equal principal amount of NJNG’s FMBs issued under NJNG’s Mortgage Indenture.

Sale Leasebacks

NJNG received $17.3 million during fiscal 2022 in connection with the sale leaseback of its natural gas meters, with terms ranging from seven to 11 years. NJNG records a finance lease liability that is paid over the term of the lease and has the option to purchase the meters back at fair value upon expiration of the lease. NJNG exercised early purchase options with respect to certain outstanding meter leases by making final principal payments of $1.1 million and $1.2 million for fiscal 2022 and 2021, respectively. There were no natural gas meter sale leasebacks recorded during fiscal 2021.

Contractual commitments for finance lease payments, as of the fiscal years ended September 30, are as follows:

(Thousands)	Lease Payments
2023		$	7,252
2024		7,909
2025		6,026
2026		4,955
2027		2,630
Thereafter		3,262
Subtotal		32,034
Less: Interest component		(1,744)
Total		$	30,290

Clean Energy Ventures

Clean Energy Ventures enters into transactions to sell the commercial solar assets concurrent with agreements to lease the assets back over a period of five to 15 years. These transactions are treated as financing obligations for accounting purposes, and are typically secured by the renewable energy facility asset and its future cash flows from SREC, TRECs and energy sales. ITCs and other tax benefits associated with these solar projects are transferred to the buyer, if applicable; however, the lease payments are structured so that Clean Energy Ventures is compensated for the transfer of the related tax incentives. Clean Energy Ventures continues to operate the solar assets, including related expenses, and retain the revenue generated from SRECs, TRECs and energy sales, and has the option to renew the lease or repurchase the assets sold at the end of the lease term. Clean Energy Ventures received proceeds of $24.1 million and $17.7 million during fiscal 2022 and 2021, respectively, in connection with the sale leaseback of commercial solar assets. The proceeds received were recognized as a financing obligation on the Consolidated Balance Sheets.

Contractual commitments for the solar financing obligation payments, as of the fiscal years ended September 30, are as follows:

(Thousands)	Lease Payments
2023		$	15,755
2024		43,000
2025		39,629
2026		2,841
2027		5,352
Thereafter		16,442
Subtotal		123,019
Less: Interest component		(11,443)
Total		$	111,576

Credit Facilities and Short-term Debt

On February 8, 2022, NJR entered into a 364-day $150 million term loan credit agreement with an interest rate based on SOFR plus 0.85 percent, which expires on February 7, 2023. The Company borrowed $50 million on February 9, 2022 and $100 million on February 14, 2022.

A summary of NJR’s credit facility and NJNG’s commercial paper program and credit facility as of September 30, are as follows:

(Thousands)	2022			2021			Expiration Dates
NJR
Bank revolving credit facilities (1)	$	650,000		$	500,000		September 2027
Notes outstanding at end of period	$	200,150		$	219,100
Weighted average interest rate at end of period	3.97		%	1.05		%
Amount available at end of period (2)	$	440,177		$	270,312
Bank term loan credit agreement	$	150,000		$	—		February 2023
Loans outstanding at end of period	$	150,000		$	—
Weighted average interest rate at end of period	3.81		%	—		%
Amount available at end of period	$	—		$	—
NJNG
Bank revolving credit facilities (3)	$	250,000		$	250,000		September 2027
Commercial paper outstanding at end of period	$	73,800		$	158,200
Weighted average interest rate at end of period	3.34		%	.17		%
Amount available at end of period (4)	$	175,469		$	91,069

(1)Committed credit facilities, which require commitment fees of 0.10 percent on the unused amounts.

(2)Letters of credit outstanding total $9.7 million and $10.6 million as of September 30, 2022 and September 30, 2021, respectively, which reduces amount available by the same amount.

(3)Committed credit facilities, which require commitment fees of 0.075 percent on the unused amounts.

(4)Letters of credit outstanding total $731,000 as of both September 30, 2022 and 2021, which reduces amount available by the same amount.

Amounts available under credit facilities are reduced by bank or commercial paper borrowings, as applicable, and any outstanding letters of credit. Neither NJNG nor the results of its operations are obligated or pledged to support the NJR credit or debt shelf facilities.

NJR

During fiscal 2021, NJR entered into a Second Amended and Restated Credit Agreement governing a $500 million NJR Credit Facility, which was to expire on September 2, 2026. The NJR Credit Facility is subject to two mutual options for a one-year extension beyond that date and includes an accordion feature, which allows NJR, in the absence of a default or event of default, to increase from time to time, with the existing or new lenders, the revolving credit commitments under the NJR Credit Facility in increments of $50 million up to a maximum of $250 million. The NJR Credit Facility also permits the borrowing of revolving loans and swingline loans, as well as a $75 million sublimit for the issuance of letters of credit. On August 30, 2022, NJR amended the Second Amended and Restated Credit Agreement to $650 million and extended the maturity date of the facility to September 2, 2027. The amendment also increased the swingline to $70 million from $60 million and moved to SOFR as the benchmark rate, replacing the existing LIBOR. Certain of NJR’s unregulated subsidiaries have guaranteed all of NJR’s obligations under the NJR Credit Facility. The credit facility is used primarily to finance its share repurchases, to satisfy Energy Services’ short-term liquidity needs and to finance, on an initial basis, unregulated investments.

As of September 30, 2022, NJR had seven letters of credit outstanding totaling $9.7 million on behalf of Energy Services and Clean Energy Ventures. These letters of credit reduce the amount available under NJR’s committed credit facility by the same amount. NJR does not anticipate that these letters of credit will be drawn upon by the counterparties, and they will be renewed as necessary.

Energy Services’ letters of credit are used for margin requirements for natural gas transactions, collateral and security deposit for retail natural gas sales, and they expire on dates ranging from September 2023 to December 2023.

Neither NJNG nor the results of its operations are obligated or pledged to support the NJR credit or debt shelf facilities.

NJNG

During fiscal 2021, NJNG entered into a Second Amended and Restated Credit Agreement governing a $250 million, NJNG Credit Facility, which was to expire on September 2, 2026. The NJNG Credit Facility is subject to two mutual options for a one-year extension beyond that date and permits the borrowing of revolving loans and swingline loans, as well as a $30 million sublimit for the issuance of letters of credit. The NJNG Credit Facility also includes an accordion feature, which would allow NJNG, in the absence of a default or event of default, to increase from time to time, with the existing or new lenders, the revolving credit commitments under the NJNG Credit Facility in minimum increments of $50 million up to a maximum of $100 million.

On August 30, 2022, NJNG amended the Second Amended and Restated Credit Agreement to extend the maturity date of the facility to September 2, 2027, and moved to SOFR as the benchmark rate, replacing the existing LIBOR.

As of September 30, 2022, NJNG has two letters of credit outstanding for 731,000, which reduced the amount available under the NJNG Credit Facility by the same amount. NJNG does not anticipate that these letters of credit will be drawn upon by the counterparties.