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DERIVATIVE INSTRUMENTS (Tables)
 12 Months Ended
Sep. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Fair Value of Derivative Assets and Liabilities
The following table presents the fair value of the Company’s derivative assets and liabilities recognized on the Consolidated Balance Sheets as of September 30:
Derivatives at Fair Value
20222021
(Thousands)Balance Sheet LocationAssetsLiabilitiesAssetsLiabilities
Derivatives not designated as hedging instruments:
Natural Gas Distribution:
Physical commodity contractsDerivatives - current$252 $11 $36 $16 
Financial commodity contractsDerivatives - current85 6,281 2,046 13 
Energy Services:
Physical commodity contractsDerivatives - current9,857 17,051 2,818 24,592 
Derivatives - noncurrent376 13,561 333 13,237 
Financial commodity contractsDerivatives - current14,423 26,488 30,226 62,521 
Derivatives - noncurrent6,009 630 3,068 260 
Foreign currency contractsDerivatives - current18 17 125 3 
Derivatives - noncurrent— — 2 — 
Total fair value of derivatives$31,020 $64,039 $38,654 $100,642 
Offsetting Assets The following table summarizes the reported gross amounts, the amounts that the Company has the right to offset but elects not to, financial collateral and the net amounts the Company could present on the Consolidated Balance Sheets but elects not to.
(Thousands)
Amounts Presented on Balance Sheets (1)
Offsetting Derivative Instruments (2)
Financial Collateral Received/Pledged (3)
Net Amounts (4)
As of September 30, 2022:
Derivative assets:
Energy Services
Physical commodity contracts$10,233 $(404)$(200)$9,629 
Financial commodity contracts20,432 (12,198)— 8,234 
Foreign currency contracts18 (17)— 1 
Total Energy Services$30,683 $(12,619)$(200)$17,864 
Natural Gas Distribution
Physical commodity contracts$252 $— $— $252 
Financial commodity contracts85 (85)— — 
Total Natural Gas Distribution$337 $(85)$— $252 
Derivative liabilities:
Energy Services
Physical commodity contracts$30,612 $(404)$— $30,208 
Financial commodity contracts27,118 (12,198)— 14,920 
Foreign currency contracts17 (17)— 
Total Energy Services$57,747 $(12,619)$— $45,128 
Natural Gas Distribution
Physical commodity contracts$11 $— $— $11 
Financial commodity contracts6,281 (85)— 6,196 
Total Natural Gas Distribution$6,292 $(85)$— $6,207 
As of September 30, 2021:
Derivative assets:
Energy Services
Physical commodity contracts$3,151 $(894)$(700)$1,557 
Financial commodity contracts33,294 (33,294)20,532 20,532 
Foreign currency contracts127 (3)— 124 
Total Energy Services$36,572 $(34,191)$19,832 $22,213 
Natural Gas Distribution
Physical commodity contracts$36 $(8)$— $28 
Financial commodity contracts2,046 (13)— 2,033 
Total Natural Gas Distribution$2,082 $(21)$— $2,061 
Derivative liabilities:
Energy Services
Physical commodity contracts$37,829 $(894)$— $36,935 
Financial commodity contracts62,781 (33,294)— 29,487 
Foreign currency contracts3 (3)— — 
Total Energy Services$100,613 $(34,191)$— $66,422 
Natural Gas Distribution
Physical commodity contracts$16 $(8)$— $8 
Financial commodity contracts13 (13)— — 
Total Natural Gas Distribution$29 $(21)$— $8 
(1)Derivative assets and liabilities are presented on a gross basis on the balance sheets as the Company does not elect balance sheet offsetting under ASC 210-20.
(2)Includes transactions with NAESB netting election, transactions held by FCMs with net margining and transactions with ISDA netting.
(3)Financial collateral includes cash balances at FCMs, 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.
Offsetting Liabilities The following table summarizes the reported gross amounts, the amounts that the Company has the right to offset but elects not to, financial collateral and the net amounts the Company could present on the Consolidated Balance Sheets but elects not to.
(Thousands)
Amounts Presented on Balance Sheets (1)
Offsetting Derivative Instruments (2)
Financial Collateral Received/Pledged (3)
Net Amounts (4)
As of September 30, 2022:
Derivative assets:
Energy Services
Physical commodity contracts$10,233 $(404)$(200)$9,629 
Financial commodity contracts20,432 (12,198)— 8,234 
Foreign currency contracts18 (17)— 1 
Total Energy Services$30,683 $(12,619)$(200)$17,864 
Natural Gas Distribution
Physical commodity contracts$252 $— $— $252 
Financial commodity contracts85 (85)— — 
Total Natural Gas Distribution$337 $(85)$— $252 
Derivative liabilities:
Energy Services
Physical commodity contracts$30,612 $(404)$— $30,208 
Financial commodity contracts27,118 (12,198)— 14,920 
Foreign currency contracts17 (17)— 
Total Energy Services$57,747 $(12,619)$— $45,128 
Natural Gas Distribution
Physical commodity contracts$11 $— $— $11 
Financial commodity contracts6,281 (85)— 6,196 
Total Natural Gas Distribution$6,292 $(85)$— $6,207 
As of September 30, 2021:
Derivative assets:
Energy Services
Physical commodity contracts$3,151 $(894)$(700)$1,557 
Financial commodity contracts33,294 (33,294)20,532 20,532 
Foreign currency contracts127 (3)— 124 
Total Energy Services$36,572 $(34,191)$19,832 $22,213 
Natural Gas Distribution
Physical commodity contracts$36 $(8)$— $28 
Financial commodity contracts2,046 (13)— 2,033 
Total Natural Gas Distribution$2,082 $(21)$— $2,061 
Derivative liabilities:
Energy Services
Physical commodity contracts$37,829 $(894)$— $36,935 
Financial commodity contracts62,781 (33,294)— 29,487 
Foreign currency contracts3 (3)— — 
Total Energy Services$100,613 $(34,191)$— $66,422 
Natural Gas Distribution
Physical commodity contracts$16 $(8)$— $8 
Financial commodity contracts13 (13)— — 
Total Natural Gas Distribution$29 $(21)$— $8 
(1)Derivative assets and liabilities are presented on a gross basis on the balance sheets as the Company does not elect balance sheet offsetting under ASC 210-20.
(2)Includes transactions with NAESB netting election, transactions held by FCMs with net margining and transactions with ISDA netting.
(3)Financial collateral includes cash balances at FCMs, as well as cash received from or pledged to other counterparties.
(4)Net amounts represent presentation of derivative assets and liabilities if the Company were to elect balance sheet offsetting under ASC 210-20.
Effect of Derivative Instruments on Consolidated Statements of Operations
The following table presents the effect of derivative instruments recognized on the Consolidated Statements of Operations as of September 30:
(Thousands)Location of gain (loss) recognized in income on derivativesAmount of gain (loss) recognized
in income on derivatives
Derivatives not designated as hedging instruments:202220212020
Energy Services:
Physical commodity contractsOperating revenues$(8,569)$30,011 $1,163 
Physical commodity contractsNatural gas purchases3,580 1,052 (3,366)
Financial commodity contractsNatural gas purchases14,403 (43,997)58,949 
Foreign currency contractsNatural gas purchases(14)238 (41)
Total unrealized and realized gains (losses)$9,400 $(12,696)$56,705 
Effect of Derivative Instruments Designated as Cash Flow Hedges on OCI
The following table reflects the gains and/or (losses) associated with NJNG’s derivative instruments as of September 30:
(Thousands)202220212020
Natural Gas Distribution:
Physical commodity contracts$7,116 $2,174 $2,077 
Financial commodity contracts32,868 32,725 (3,903)
Total unrealized and realized gains (losses)$39,984 $34,899 $(1,826)
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)
The following table reflects the effect of derivative instruments designated as cash flow hedges in OCI as of September 30:
(Thousands)Amount of pre-tax gain (loss) recognized in OCI on derivativesLocation of gain (loss) reclassified from OCI into incomeAmount of pre-tax gain (loss) reclassified from OCI into income
Derivatives in cash flow hedging relationships:2022202120222021
Interest rate contracts$— $— Interest expense$(1,371)$(1,371)
Schedule of Outstanding Long (Short) Derivatives
NJNG and Energy Services had the following outstanding long (short) derivatives as of September 30:
Volume (Bcf)
Transaction Type20222021
Natural Gas DistributionFutures30.5 22.2 
Physical Commodity6.8 7.6 
Energy ServicesFutures(0.7)(13.4)
Swaps— (0.3)
Physical Commodity2.7 0.6 
Schedule of Broker Margin Accounts by Company The balances as of September 30, by reporting segment, are as follows:
(Thousands)Balance Sheet Location20222021
Natural Gas DistributionRestricted broker margin accounts - current assets$26,138 $2,790 
Energy ServicesRestricted broker margin accounts - current assets$68,123 $70,050 
Summary of Gross Credit Exposures
The following is a summary of gross credit exposures grouped by investment and noninvestment grade counterparties, as of September 30, 2022. 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 and Clean Energy Ventures residential solar installations.
(Thousands)Gross Credit
Exposure
Investment grade$182,138 
Noninvestment grade30,105 
Internally-rated investment grade17,113 
Internally-rated noninvestment grade45,591 
Total$274,947