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FAIR VALUE
 3 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
FAIR VALUE
6. FAIR VALUE

Fair Value of Assets and Liabilities

The fair value of cash and cash equivalents, accounts receivable, current loans receivable, accounts payable, commercial paper and borrowings under revolving credit facilities are estimated to equal their carrying amounts due to the short maturity of those instruments. Noncurrent loans receivable are recorded based on what the Company expects to receive, which approximates fair value, in other noncurrent assets on the Unaudited Condensed Consolidated Balance Sheets. The Company regularly evaluates the credit quality and collection profile of its customers to approximate fair value.

The estimated fair value of long-term debt, including current maturities, excluding natural gas meter sale leasebacks, debt issuance costs and solar asset sale leasebacks, is as follows:
(Thousands)December 31,
2024		September 30,
2024
Carrying value (1) (2)
$2,767,845 $2,767,845 
Fair market value$2,391,501 $2,525,804 
(1)Excludes NJNG's debt issuance costs of $10.8M and $10.9M as of December 31, 2024 and September 30, 2024, respectively.
(2)Excludes NJR's debt issuance costs of $3.4M and $3.0M as of December 31, 2024 and September 30, 2024, respectively.
The Company enters into sale leaseback transactions for certain commercial solar assets and natural gas meters. These transactions are recorded within long-term debt on the Unaudited Condensed Consolidated Balance Sheets. The carrying value of solar sale leasebacks was approximately $288.0M and $283.0M and the estimated fair value was approximately $287.9M and $290.4M as of December 31, 2024 and September 30, 2024, respectively. The carrying value of the natural gas meter sale leasebacks was approximately $39.4M and $31.6M and the estimated fair value of certain natural gas meter sale leasebacks amounted to approximately $36.5M and $26.7M as of December 31, 2024 and September 30, 2024, respectively.

The Company utilizes a discounted cash flow method to determine the fair value of its debt. Inputs include observable municipal and corporate yields, as appropriate for the maturity of the specific debt instrument and the Company's credit rating. As of December 31, 2024 and September 30, 2024, the Company discloses its debt within Level 2 of the fair value hierarchy.

Fair Value Hierarchy

The Company applies fair value measurement guidance to its financial assets and liabilities, as appropriate, which include financial derivatives and physical commodity contracts qualifying as derivatives, investments in equity securities and other financial assets and liabilities. In addition, authoritative accounting literature prescribes the use of a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based on the source of the data used to develop the price inputs. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to inputs that are based on unobservable market data and includes the following:
Fair Value HierarchyDescription of Fair Value LevelFair Value Technique
Level 1
Unadjusted quoted prices for identical assets or liabilities in active markets
The Company’s Level 1 assets and liabilities include exchange-traded natural gas futures and options contracts, listed equities and money market funds. Exchange-traded futures and options contracts include all energy contracts traded on the NYMEX, CME and ICE that the Company refers to internally as basis swaps, fixed swaps, futures and financial options that are cleared through an FCM.
Level 2Other significant observable inputs, such as interest rates or price data, including both commodity and basis pricing that is observed either directly or indirectly from publications or pricing services
The Company’s Level 2 assets and liabilities include over-the-counter physical forward commodity contracts and swap contracts, SREC contracts or derivatives that are initially valued using observable quotes and are subsequently adjusted to include time value, credit risk or estimated transport pricing components for which no basis price is available. Level 2 financial derivatives consist of transactions with non-FCM counterparties (basis swaps, fixed swaps and/or options). Inputs are verifiable and do not require significant management judgment. For some physical commodity contracts, the Company utilizes transportation tariff rates that are publicly available and that it considers to be observable inputs that are equivalent to market data received from an independent source. There are no significant judgments or adjustments applied to the transportation tariff inputs and no market perspective is required. Even if the transportation tariff input were considered to be a “model,” it would still be considered to be a Level 2 input as the data is:
•widely accepted and public;
•non-proprietary and sourced from an independent third party; and
•observable and published.
These additional adjustments are generally not considered to be significant to the ultimate recognized values.
Level 3Inputs derived from a significant amount of unobservable market dataThese include the Company’s best estimate of fair value and are derived primarily through the use of internal valuation methodologies.
Assets and liabilities measured at fair value on a recurring basis are summarized as follows:
Quoted Prices in Active Markets for Identical AssetsSignificant Other Observable InputsSignificant Unobservable Inputs
(Thousands)(Level 1)(Level 2)(Level 3)Total
As of December 31, 2024
Assets:
Physical commodity contracts$— $3,840 $— $3,840 
Financial commodity contracts3,105 — — 3,105 
Money market funds10 — — 10 
Other2,714 — — 2,714 
Total assets at fair value$5,829 $3,840 $— $9,669 
Liabilities:
Physical commodity contracts$— $19,829 $— $19,829 
Financial commodity contracts5,955 — — 5,955 
Total liabilities at fair value$5,955 $19,829 $— $25,784 
As of September 30, 2024
Assets:
Physical commodity contracts$— $2,408 $— $2,408 
Financial commodity contracts5,211 — — 5,211 
Money market funds62 — — 62 
Other2,671 — — 2,671 
Total assets at fair value$7,944 $2,408 $— $10,352 
Liabilities:
Physical commodity contracts$— $15,683 $— $15,683 
Financial commodity contracts2,078 — — 2,078 
Total liabilities at fair value$2,078 $15,683 $— $17,761