Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 01, 2017 | |
Document Information [Line Items] | ||
Entity Registrant Name | SOUTH JERSEY INDUSTRIES INC | |
Entity Central Index Key | 91,928 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 79,549,014 | |
South Jersey Gas Company | ||
Document Information [Line Items] | ||
Entity Registrant Name | SOUTH JERSEY GAS Co | |
Entity Central Index Key | 1,035,216 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 2,339,139 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Operating Revenues: | ||||
Utility | $ 81,938 | $ 68,273 | $ 277,707 | $ 251,942 |
Nonutility | 162,436 | 86,129 | 392,496 | 235,495 |
Total Operating Revenues | 244,374 | 154,402 | 670,203 | 487,437 |
Cost of Sales - (Excluding depreciation) | ||||
- Utility | 32,331 | 19,508 | 103,710 | 84,714 |
- Nonutility | 147,354 | 78,832 | 363,117 | 166,601 |
Operations | 38,474 | 36,250 | 78,100 | 75,047 |
Maintenance | 4,672 | 4,259 | 9,653 | 8,643 |
Depreciation | 24,556 | 22,296 | 48,879 | 42,997 |
Energy and Other Taxes | 1,551 | 1,243 | 3,622 | 3,168 |
Total Operating Expenses | 248,938 | 162,388 | 607,081 | 381,170 |
Operating Loss | (4,564) | (7,986) | 63,122 | 106,267 |
Other Income and Expense | 2,317 | 4,361 | 7,982 | 6,564 |
Interest Charges | (10,979) | (8,229) | (27,724) | (17,389) |
Losses Before Income Taxes | (13,226) | (11,854) | 43,380 | 95,442 |
Income Taxes | 5,544 | 7,189 | (16,326) | (32,078) |
Equity in Earnings (Losses) of Affiliated Companies | 70 | (133) | 3,081 | 25 |
Loss from Continuing Operations | (7,612) | (4,798) | 30,135 | 63,389 |
Loss from Discontinued Operations - (Net of tax benefit) | (47) | (29) | (77) | (147) |
Net Loss | $ (7,659) | $ (4,827) | $ 30,058 | $ 63,242 |
Basic Earnings Per Common Share: | ||||
Continuing Operations (in dollars per share) | $ (0.10) | $ (0.06) | $ 0.38 | $ 0.86 |
Discontinued Operations (in dollars per share) | 0 | 0 | 0 | 0 |
Basic Earnings Per Common Share (in dollars per share) | $ (0.10) | $ (0.06) | $ 0.38 | $ 0.86 |
Average Shares of Common Stock Outstanding - Basic (in shares) | 79,549 | 75,298 | 79,534 | 73,213 |
Diluted Earnings Per Common Share: | ||||
Continuing Operations (in dollars per share) | $ (0.10) | $ (0.06) | $ 0.38 | $ 0.86 |
Discontinued Operations (in dollars per share) | 0 | 0 | 0 | 0 |
Diluted Earnings Per Common Share (in dollars per share) | $ (0.10) | $ (0.06) | $ 0.38 | $ 0.86 |
Average Shares of Common Stock Outstanding - Diluted (in shares) | 79,549 | 75,298 | 79,670 | 73,506 |
Dividends Declared Per Common Share (in dollars per share) | $ 0.27 | $ 0.26 | $ 0.54 | $ 0.52 |
South Jersey Gas Company | ||||
Operating Revenues: | ||||
Total Operating Revenues | $ 83,251 | $ 68,762 | $ 280,065 | $ 256,528 |
Cost of Sales - (Excluding depreciation) | ||||
Cost of Sales (Excluding depreciation) | 33,644 | 19,997 | 106,068 | 89,300 |
Operations | 23,034 | 22,525 | 47,788 | 48,594 |
Maintenance | 4,672 | 4,259 | 9,653 | 8,643 |
Depreciation | 12,873 | 11,490 | 25,587 | 22,700 |
Energy and Other Taxes | 872 | 560 | 2,167 | 1,587 |
Total Operating Expenses | 75,095 | 58,831 | 191,263 | 170,824 |
Operating Loss | 8,156 | 9,931 | 88,802 | 85,704 |
Other Income and Expense | 1,618 | 1,079 | 3,239 | 1,915 |
Interest Charges | (6,077) | (4,552) | (11,955) | (9,339) |
Losses Before Income Taxes | 3,697 | 6,458 | 80,086 | 78,280 |
Income Taxes | (1,431) | (1,415) | (31,342) | (28,819) |
Net Loss | $ 2,266 | $ 5,043 | $ 48,744 | $ 49,461 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Net Loss | $ (7,659) | $ (4,827) | $ 30,058 | $ 63,242 | |
Other Comprehensive Income, Net of Tax: | |||||
Unrealized Gain on Available-for-Sale Securities | 0 | 55 | 0 | 104 | |
Unrealized Gain on Derivatives - Other | 7 | 49 | 1,522 | 100 | |
Other Comprehensive Income - Net of Tax | [1] | 7 | 104 | 1,522 | 204 |
Comprehensive Loss | (7,652) | (4,723) | 31,580 | 63,446 | |
South Jersey Gas Company | |||||
Net Loss | 2,266 | 5,043 | 48,744 | 49,461 | |
Other Comprehensive Income, Net of Tax: | |||||
Unrealized Gain on Available-for-Sale Securities | 0 | 3 | 0 | 7 | |
Unrealized Gain on Derivatives - Other | 7 | 7 | 14 | 14 | |
Other Comprehensive Income - Net of Tax | [2] | 7 | 10 | 14 | 21 |
Comprehensive Loss | $ 2,273 | $ 5,053 | $ 48,758 | $ 49,482 | |
[1] | Determined using a combined average statutory tax rate of 40%. | ||||
[2] | Determined using a combined average statutory tax rate of 40%. |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Combined statutory tax rate | 40.00% | 40.00% | 40.00% | 40.00% |
South Jersey Gas Company | ||||
Combined statutory tax rate | 40.00% | 40.00% | 40.00% | 40.00% |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Net Cash Provided by Operating Activities (See Note 1) | $ 123,658 | $ 158,099 |
Cash Flows from Investing Activities: | ||
Capital Expenditures (See Note 1) | (142,029) | (119,905) |
Proceeds from Sale of Property, Plant & Equipment | 3,058 | 0 |
Investment in Long-Term Receivables | (4,602) | (5,702) |
Proceeds from Long-Term Receivables | 4,948 | 5,195 |
Notes Receivable | 3,000 | (74) |
Purchase of Company-Owned Life Insurance | (8,074) | (652) |
Investment in Affiliate | (19,461) | (5,820) |
Net Repayment of Notes Receivable - Affiliate | 243 | 1,266 |
Net Cash Used in Investing Activities (See Note 1) | (162,917) | (125,692) |
Cash Flows from Financing Activities: | ||
Net Borrowings from (Repayments of) Short-Term Credit Facilities | 200 | (286,300) |
Proceeds from Issuance of Long-Term Debt | 321,000 | 61,000 |
Principal Repayments of Long-Term Debt | (277,400) | (13,078) |
Payments for Issuance of Long-Term Debt | (2,060) | 0 |
Net Settlement of Restricted Stock (See Note 1) | (751) | 0 |
Dividends on Common Stock | (21,676) | (18,790) |
Proceeds from Sale of Common Stock | 0 | 214,463 |
Net Cash Provided by Financing Activities | 19,313 | (42,705) |
Net Decrease in Cash, Cash Equivalents and Restricted Cash | (19,946) | (10,298) |
Cash, Cash Equivalents and Restricted Cash at Beginning of Period (See Note 1) | 31,910 | 52,635 |
Cash, Cash Equivalents and Restricted Cash at End of Period (See Note 1) | 11,964 | 42,337 |
South Jersey Gas Company | ||
Net Cash Provided by Operating Activities (See Note 1) | 75,514 | 97,394 |
Cash Flows from Investing Activities: | ||
Capital Expenditures (See Note 1) | (127,209) | (107,676) |
Investment in Long-Term Receivables | (4,602) | (5,702) |
Proceeds from Long-Term Receivables | 4,948 | 5,195 |
Notes Receivable | 0 | (74) |
Purchase of Company-Owned Life Insurance | (4,875) | 0 |
Net Cash Used in Investing Activities (See Note 1) | (131,738) | (108,257) |
Cash Flows from Financing Activities: | ||
Net Borrowings from (Repayments of) Short-Term Credit Facilities | (101,500) | (121,100) |
Proceeds from Issuance of Long-Term Debt | 321,000 | 61,000 |
Principal Repayments of Long-Term Debt | (200,000) | 0 |
Payments for Issuance of Long-Term Debt | (2,029) | 0 |
Additional Investment by Shareholder | 40,000 | 65,000 |
Net Cash Provided by Financing Activities | 57,471 | 4,900 |
Net Decrease in Cash, Cash Equivalents and Restricted Cash | 1,247 | (5,963) |
Cash, Cash Equivalents and Restricted Cash at Beginning of Period (See Note 1) | 1,391 | 7,544 |
Cash, Cash Equivalents and Restricted Cash at End of Period (See Note 1) | $ 2,638 | $ 1,581 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment: | ||
Utility Plant, at original cost | $ 2,536,251 | $ 2,424,134 |
Accumulated Depreciation | (480,248) | (471,222) |
Nonutility Property and Equipment, at cost | 824,775 | 821,942 |
Accumulated Depreciation | (173,009) | (151,084) |
Property, Plant and Equipment - Net | 2,707,769 | 2,623,770 |
Investments: | ||
Available-for-Sale Securities | 32 | 32 |
Restricted Investments | 1,842 | 13,628 |
Investment in Affiliates | 49,979 | 28,906 |
Total Investments | 51,853 | 42,566 |
Current Assets: | ||
Cash and Cash Equivalents | 10,122 | 18,282 |
Accounts Receivable | 180,551 | 222,339 |
Unbilled Revenues | 25,124 | 59,680 |
Provision for Uncollectibles | (12,218) | (12,744) |
Notes Receivable | 1,107 | 1,454 |
Notes Receivable - Affiliate | 2,218 | 2,461 |
Natural Gas in Storage, average cost | 47,521 | 53,857 |
Materials and Supplies, average cost | 6,965 | 6,753 |
Prepaid Taxes | 14,841 | 17,471 |
Derivatives - Energy Related Assets | 46,361 | 72,391 |
Other Prepayments and Current Assets | 33,870 | 31,369 |
Total Current Assets | 356,462 | 473,313 |
Regulatory and Other Noncurrent Assets: | ||
Regulatory Assets | 445,312 | 410,746 |
Derivatives - Energy Related Assets | 7,248 | 8,502 |
Notes Receivable - Affiliate | 13,275 | 13,275 |
Contract Receivables | 28,873 | 29,037 |
Notes Receivable | 19,374 | 25,271 |
Goodwill | 4,838 | 4,838 |
Identifiable Intangible Assets | 15,255 | 15,820 |
Other | 91,601 | 83,429 |
Total Regulatory and Other Noncurrent Assets | 625,776 | 590,918 |
Total Assets | 3,741,860 | 3,730,567 |
Equity: | ||
Common Stock | 99,436 | 99,347 |
Other Paid-In Capital and Premium on Common Stock | 708,082 | 706,943 |
Treasury Stock (at par) | (264) | (266) |
Accumulated Other Comprehensive Loss | (25,859) | (27,381) |
Retained Earnings | 497,854 | 510,597 |
Total Equity | 1,279,249 | 1,289,240 |
Long-Term Debt | 1,066,680 | 808,005 |
Total Capitalization | 2,345,929 | 2,097,245 |
Current Liabilities: | ||
Notes Payable | 296,300 | 296,100 |
Current Portion of Long-Term Debt | 15,909 | 231,909 |
Accounts Payable | 246,688 | 243,669 |
Customer Deposits and Credit Balances | 48,792 | 48,068 |
Environmental Remediation Costs | 59,706 | 46,120 |
Taxes Accrued | 2,358 | 2,082 |
Derivatives - Energy Related Liabilities | 23,082 | 60,082 |
Derivatives - Other Current | 787 | 681 |
Dividends Payable | 21,677 | 0 |
Interest Accrued | 4,836 | 6,231 |
Pension Benefits | 2,463 | 2,463 |
Other Current Liabilities | 11,521 | 15,219 |
Total Current Liabilities | 734,119 | 952,624 |
Deferred Credits and Other Noncurrent Liabilities: | ||
Deferred Income Taxes - Net | 360,179 | 343,549 |
Pension and Other Postretirement Benefits | 89,474 | 95,235 |
Environmental Remediation Costs | 103,214 | 108,893 |
Asset Retirement Obligations | 59,443 | 59,427 |
Derivatives - Energy Related Liabilities | 4,660 | 4,540 |
Derivatives - Other Noncurrent | 10,559 | 9,349 |
Regulatory Liabilities | 24,655 | 49,121 |
Other | 9,628 | 10,584 |
Total Deferred Credits and Other Noncurrent Liabilities | 661,812 | 680,698 |
Commitments and Contingencies (Note 11) | ||
Total Capitalization and Liabilities | 3,741,860 | 3,730,567 |
South Jersey Gas Company | ||
Property, Plant and Equipment: | ||
Utility Plant, at original cost | 2,536,251 | 2,424,134 |
Accumulated Depreciation | (480,248) | (471,222) |
Property, Plant and Equipment - Net | 2,056,003 | 1,952,912 |
Investments: | ||
Restricted Investments | 1,542 | 32 |
Total Investments | 1,542 | 32 |
Current Assets: | ||
Cash and Cash Equivalents | 1,096 | 1,359 |
Accounts Receivable | 76,400 | 69,651 |
Accounts Receivable - Related Parties | 738 | 1,355 |
Unbilled Revenues | 11,343 | 41,754 |
Provision for Uncollectibles | (12,010) | (12,570) |
Natural Gas in Storage, average cost | 12,728 | 11,621 |
Materials and Supplies, average cost | 947 | 914 |
Prepaid Taxes | 14,129 | 16,428 |
Derivatives - Energy Related Assets | 7,998 | 5,434 |
Other Prepayments and Current Assets | 15,349 | 13,853 |
Total Current Assets | 128,718 | 149,799 |
Regulatory and Other Noncurrent Assets: | ||
Regulatory Assets | 445,312 | 410,746 |
Long-Term Receivables | 25,794 | 25,758 |
Derivatives - Energy Related Assets | 0 | 373 |
Other | 16,374 | 12,303 |
Total Regulatory and Other Noncurrent Assets | 487,480 | 449,180 |
Total Assets | 2,673,743 | 2,551,923 |
Equity: | ||
Common Stock | 5,848 | 5,848 |
Other Paid-In Capital and Premium on Common Stock | 355,743 | 315,827 |
Accumulated Other Comprehensive Loss | (14,920) | (14,934) |
Retained Earnings | 582,024 | 533,159 |
Total Equity | 928,695 | 839,900 |
Long-Term Debt | 742,525 | 423,177 |
Total Capitalization | 1,671,220 | 1,263,077 |
Current Liabilities: | ||
Notes Payable | 2,800 | 104,300 |
Current Portion of Long-Term Debt | 15,909 | 215,909 |
Accounts Payable - Commodity | 30,635 | 23,815 |
Accounts Payable - Other | 49,464 | 45,370 |
Accounts Payable - Related Parties | 7,663 | 11,216 |
Customer Deposits and Credit Balances | 46,845 | 45,816 |
Environmental Remediation Costs | 59,320 | 45,018 |
Taxes Accrued | 1,392 | 855 |
Derivatives - Energy Related Liabilities | 1,881 | 1,372 |
Derivatives - Other Current | 382 | 386 |
Interest Accrued | 3,889 | 5,369 |
Pension Benefits | 2,428 | 2,428 |
Other Current Liabilities | 3,946 | 8,011 |
Total Current Liabilities | 226,554 | 509,865 |
Deferred Credits and Other Noncurrent Liabilities: | ||
Deferred Income Taxes - Net | 500,913 | 469,408 |
Pension and Other Postretirement Benefits | 77,384 | 81,800 |
Environmental Remediation Costs | 102,362 | 108,029 |
Asset Retirement Obligations | 58,676 | 58,674 |
Derivatives - Energy Related Liabilities | 297 | 0 |
Derivatives - Other Noncurrent | 6,915 | 6,979 |
Regulatory Liabilities | 24,655 | 49,121 |
Other | 4,767 | 4,970 |
Total Deferred Credits and Other Noncurrent Liabilities | 775,969 | 778,981 |
Total Capitalization and Liabilities | $ 2,673,743 | $ 2,551,923 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: GENERAL - South Jersey Industries, Inc. (SJI or the Company) currently provides a variety of energy-related products and services primarily through the following wholly-owned subsidiaries: ▪ South Jersey Gas Company (SJG) is a regulated natural gas utility. SJG distributes natural gas in the seven southernmost counties of New Jersey. ▪ South Jersey Energy Company (SJE) acquires and markets natural gas and electricity to retail end users and provides total energy management services to commercial, industrial and residential customers. ▪ South Jersey Resources Group, LLC (SJRG) markets natural gas storage, commodity and transportation assets along with fuel management services on a wholesale basis in the mid-Atlantic, Appalachian and southern states. ▪ South Jersey Exploration, LLC (SJEX) owns oil, gas and mineral rights in the Marcellus Shale region of Pennsylvania. ▪ Marina Energy, LLC (Marina) develops and operates on-site energy-related projects. The significant wholly-owned subsidiaries of Marina are: • ACB Energy Partners, LLC (ACB) owns and operates a natural gas fueled combined heating, cooling and power facility located in Atlantic City, New Jersey. • AC Landfill Energy, LLC (ACLE), BC Landfill Energy, LLC (BCLE), SC Landfill Energy, LLC (SCLE) and SX Landfill Energy, LLC (SXLE) own and operate landfill gas-fired electric production facilities in Atlantic, Burlington, Salem and Sussex Counties located in New Jersey. • MCS Energy Partners, LLC (MCS), NBS Energy Partners, LLC (NBS) and SBS Energy Partners, LLC (SBS) own and operate solar-generation sites located in New Jersey. ▪ South Jersey Energy Service Plus, LLC (SJESP) services residential and small commercial HVAC systems, installs small commercial HVAC systems, provides plumbing services and services appliances under warranty via a subcontractor arrangement as well as on a time and materials basis. In May 2017, SJESP entered into an agreement to sell certain assets of its residential and small commercial HVAC and plumbing business to a third party. This transaction, which is expected to be completed by August 31, 2017, is not expected to have a material impact on the consolidated financial statements. ▪ SJI Midstream, LLC (Midstream) invests in infrastructure and other midstream projects, including a current project to build an approximately 118 -mile natural gas pipeline in Pennsylvania and New Jersey. BASIS OF PRESENTATION - SJI's condensed consolidated financial statements include the accounts of SJI, its wholly-owned subsidiaries (including SJG) and subsidiaries in which SJI has a controlling interest. SJI eliminates all significant intercompany accounts and transactions. In management’s opinion, the unaudited condensed consolidated financial statements of SJI and SJG reflect all normal and recurring adjustments needed to fairly present their respective financial positions, operating results and cash flows at the dates and for the periods presented. SJI’s and SJG's businesses are subject to seasonal fluctuations and, accordingly, this interim financial information should not be the basis for estimating the full year’s operating results. As permitted by the rules and regulations of the Securities and Exchange Commission (SEC), the accompanying unaudited condensed consolidated financial statements of SJI and SJG contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). These financial statements should be read in conjunction with SJI’s and SJG's Annual Reports on Form 10-K for the year ended December 31, 2016 for a more complete discussion of the accounting policies and certain other information. Certain reclassifications have been made to SJI's and SJG's prior period condensed consolidated statements of cash flows to conform to the current period presentation. Restricted cash is now combined with cash and cash equivalents when reconciling the beginning and end of period balances on the condensed consolidated statements of cash flows of SJI, as well as the condensed statements of cash flows for SJG, to conform to ASU 2016-18, which is described below under "New Accounting Pronouncements." This combination of restricted cash and cash and cash equivalents caused Cash Flows from Investing Activities for both SJI and SJG to be adjusted in order to remove items relating to capital expenditures and proceeds from restricted investments (SJI only), as well as the sale of restricted investments in a margin account (SJI and SJG). Certain reclassifications have been made to SJI's prior period condensed consolidated statements of cash flows to conform to the current period presentation. Cash paid by an employer when directly withholding shares for tax-withholding purposes is now classified as a financing activity in the condensed consolidated statements of cash flows to conform to ASU 2016-09, which is described below under "New Accounting Pronouncements." This caused SJI's prior period Cash Flows Provided by Operating Activities to increase by $0.4 million and Net Cash Flows from Financing Activities to decrease by the same amount. Adoption of this guidance did not effect SJG's condensed statements of cash flows. REVENUE-BASED TAXES - SJG collects certain revenue-based energy taxes from its customers. Such taxes include the New Jersey State Sales Tax and Public Utilities Assessment (PUA). State sales tax is recorded as a liability when billed to customers and is not included in revenue or operating expenses. The PUA is included in both utility revenue and energy and other taxes and totaled $0.2 million for both the three months ended June 30, 2017 and 2016, and $0.6 million and $0.5 million for the six months ended June 30, 2017 and 2016, respectively . IMPAIRMENT OF LONG-LIVED ASSETS - SJI and SJG review the carrying amount of long-lived assets for possible impairment whenever events or changes in circumstances indicate that such amounts may not be recoverable. For the six months ended June 30, 2017 , SJI recorded an impairment charge of $0.3 million within Operating Expenses on the condensed consolidated statements of income due to a reduction in the expected cash flows to be received from a solar generating facility within the on-site energy production segment. No impairments were identified at SJI for the three months ended June 30, 2017 or at SJG for the three and six months ended June 30, 2017 . For the three and six months ended June 30, 2016 , no impairments were identified at SJI or SJG. GAS EXPLORATION AND DEVELOPMENT - SJI capitalizes all costs associated with gas property acquisition, exploration and development activities under the full cost method of accounting. Capitalized costs include costs related to unproved properties, which are not amortized until proved reserves are found or it is determined that the unproved properties are impaired. All costs related to unproved properties are reviewed quarterly to determine if impairment has occurred. No impairment charges were recorded during the three and six months ended June 30, 2017 or 2016 . As of June 30, 2017 and December 31, 2016 , $8.7 million and $8.8 million , respectively, related to interests in proved and unproved properties in Pennsylvania, net of amortization, is included with Nonutility Property and Equipment and Other Noncurrent Assets on SJI's condensed consolidated balance sheets. TREASURY STOCK - SJI uses the par value method of accounting for treasury stock. As of June 30, 2017 and December 31, 2016 , SJI held 211,217 and 212,617 shares of treasury stock, respectively. These shares are related to deferred compensation arrangements where the amounts earned are held in the stock of SJI. INCOME TAXES - Deferred income taxes are provided for all significant temporary differences between the book and taxable bases of assets and liabilities in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740 - “Income Taxes.” A valuation allowance is established when it is determined that it is more likely than not that a deferred tax asset will not be realized. Investment tax credits related to renewable energy facilities of Marina are recognized on the flow-through method, which may result in variations in the customary relationship between income taxes and pre-tax income for interim periods. GOODWILL - Goodwill represents the excess of the consideration paid over the fair value of identifiable net assets acquired. Goodwill is not amortized, but instead is subject to impairment testing on an annual basis, and between annual tests whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying amount. No such events have occurred during the three and six months ended June 30, 2017 . Goodwill totaled $4.8 million on the condensed consolidated balance sheets of SJI as of both June 30, 2017 and December 31, 2016 . NEW ACCOUNTING PRONOUNCEMENTS - Other than as described below, no new accounting pronouncement issued or effective during 2017 or 2016 had, or are expected to have, a material impact on the condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU supersedes the revenue recognition requirements in FASB ASC 605, Revenue Recognition , and in most industry-specific topics. The new guidance identifies how and when entities should recognize revenue. The new rules establish a core principle requiring the recognition of revenue to depict the transfer of promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services. In connection with this new standard, the FASB has issued several amendments to ASU 2014-09, as follows: • In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) . This standard improves the implementation guidance on principal versus agent considerations and whether an entity reports revenue on a gross or net basis. • In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing . This standard clarifies identifying performance obligations and the licensing implementation guidance. • In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients . This standard provides additional guidance on (a) the objective of the collectibility criterion, (b) the presentation of sales tax collected from customers, (c) the measurement date of non-cash consideration received, (d) practical expedients in respect of contract modifications and completed contracts at transition, and (e) disclosure of the effects of the accounting change in the period of adoption. • In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers , which amends certain narrow aspects of the guidance, including the disclosure of remaining performance obligations and prior-period performance obligations, as well as other amendments to the guidance on loan guarantee fees, contract costs, refund liabilities, advertising costs and the clarification of certain examples. The new guidance in ASU 2014-09, as well as all amendments discussed above, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Management has formed an implementation team that is currently evaluating the impact that adoption of this guidance will have on the financial statements of SJI and SJG. We are in the process of assessing the impact of the guidance on our contracts in all our revenue streams by reviewing current accounting policies and practices to identify potential differences that would result from applying the new requirements to our revenue contracts. We expect that the majority of SJI and SJG revenue streams will be in scope of the new guidance, which includes SJG’s regulated revenue under tariffs, for which no change in current revenue recognition practices is expected. Revenues from contracts that SJI and SJG have with customers are currently recorded as gas or electricity is delivered to the customer, which is consistent with the new guidance under ASC 606. As a result, based on the review of customer contracts to date, SJI is not anticipating this guidance to have a material impact to SJI's or SJG's statements of consolidated income, cash flows or consolidated balance sheets upon adoption. The ASU does include expanded disclosure requirements, which we continue to analyze. We do not anticipate any significant changes to our business processes, systems or internal controls over financial reporting needed to support recognition and disclosure under the new guidance. We are continuing with our implementation plan and expect to transition to the new guidance beginning in 2018 using the modified retrospective approach. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , which enhances the reporting model for financial instruments and includes amendments to address aspects of recognition, measurement, presentation and disclosure. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted for only certain portions of the new guidance. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In March 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which establishes a new lease accounting model for lessees. The new standard requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The new standard also will result in enhanced quantitative and qualitative disclosures, including significant judgments made by management, to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing leases. The accounting for leases by the lessor remains relatively the same. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. Management has formed an implementation team that is inventorying leases and evaluating the impact that adoption of this guidance will have on SJI's and SJG's financial statements, as well as the transition method that will be elected to adopt the guidance. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , which simplifies various aspects of accounting for share-based payment arrangements. The standard was effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016, with early adoption permitted. Adoption of this guidance did not have a material impact on the financial statement results of SJI or SJG; however, cash flow presentation was modified for SJI to conform to this guidance, as described under “Basis of Presentation” above. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . This standard requires recognition of the current and deferred income tax effects of an intra-entity asset transfer, other than inventory, when the transfer occurs, as opposed to current GAAP, which requires companies to defer the income tax effects of intra-entity asset transfers until the asset has been sold to an outside party. The income tax effects of intra-entity inventory transfers will continue to be deferred until the inventory is sold. ASU 2016-16 is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods, with early adoption permitted. The standard is required to be adopted on a modified retrospective basis with a cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . This standard is intended to reduce diversity in practice in the classification and presentation of changes in restricted cash on the statement of cash flows. This ASU requires that the statement of cash flows explain the change in total cash and cash equivalents and amounts generally described as restricted cash or restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts. This ASU also requires a reconciliation between the total of cash and cash equivalents and restricted cash presented on the statement of cash flows and the cash and cash equivalents balance presented on the balance sheets. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. Both SJI and SJG early adopted this ASU in the first quarter of 2017. Accordingly, cash flow presentations were modified for both entities to conform to this guidance, as described under “Basis of Presentation” above. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . This new standard provides amended and clarifying guidance regarding whether an integrated set of assets and activities acquired is deemed the acquisition of a business (and, thus, accounted for as a business combination) or the acquisition of assets. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. The amendments in this update are effective for annual and any interim impairment tests performed in periods beginning after December 31, 2019. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This ASU is designed to improve guidance related to the presentation of defined benefit costs in the income statement. In particular, this ASU requires an employer to report the service cost component in the same line item(s) as other compensation costs arising from services rendered by the pertinent employees during the period. The standard is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting . This ASU clarifies and reduces both (i) diversity in practice and (ii) cost and complexity when applying the guidance in Topic 718, to a change to the terms and conditions of a share-based payment award. This standard is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, with early adoption permitted. The amendments in this ASU should be applied prospectively to an award modified on or after the adoption date. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. |
STOCK-BASED COMPENSATION PLAN
STOCK-BASED COMPENSATION PLAN | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION PLAN | STOCK-BASED COMPENSATION PLAN: On April 30, 2015, the shareholders of SJI approved the adoption of SJI's 2015 Omnibus Equity Compensation Plan (Plan), replacing the Amended and Restated 1997 Stock-Based Compensation Plan that had terminated on January 26, 2015. Under the Plan, shares may be issued to SJI’s officers (Officers), non-employee directors (Directors) and other key employees. No options were granted or outstanding during the six months ended June 30, 2017 and 2016 . No stock appreciation rights have been issued under the plans. During the six months ended June 30, 2017 and 2016 , SJI granted 167,444 and 193,184 restricted shares, respectively, to Officers and other key employees under the Plan. Performance-based restricted shares vest over a three -year period and are subject to SJI achieving certain market and earnings-based performance targets, which can cause the actual amount of shares that ultimately vest to range from 0% to 200% of the original shares granted. In 2015, SJI began granting time-based shares of restricted stock, one-third of which vest annually over a three -year period and which are limited to a 100% payout. Vesting of time-based grants is contingent upon SJI achieving a return on equity (ROE) of at least 7% during the initial year of the grant and meeting the service requirement. Provided that the 7% ROE requirement is met in the initial year, payout is solely contingent upon the service requirement being met in years two and three of the grant. During the six months ended June 30, 2017 and 2016 , Officers and other key employees were granted 52,971 and 57,955 shares of time-based restricted stock, respectively, which are included in the shares noted above. Grants containing market-based performance targets use SJI's total shareholder return (TSR) relative to a peer group to measure performance. As TSR-based grants are contingent upon market and service conditions, SJI is required to measure and recognize stock-based compensation expense based on the fair value at the date of grant on a straight-line basis over the requisite three -year period of each award. In addition, SJI identifies specific forfeitures of share-based awards, and compensation expense is adjusted accordingly over the requisite service period. Compensation expense is not adjusted based on the actual achievement of performance goals. The fair value of TSR-based restricted stock awards on the date of grant is estimated using a Monte Carlo simulation model. Through 2014, grants containing earnings-based targets were based on SJI's earnings growth rate per share (EGR) relative to a peer group to measure performance. In 2015, earnings-based performance targets included pre-defined EGR and ROE goals to measure performance. Beginning in 2016, performance targets include pre-defined compounded earnings annual growth rate (CEGR) for SJI. As EGR-based, ROE-based and CEGR-based grants are contingent upon performance and service conditions, SJI is required to measure and recognize stock-based compensation expense based on the fair value at the date of grant over the requisite three -year period of each award. The fair value is measured as the market price at the date of grant. The initial accruals of compensation expense are based on the estimated number of shares expected to vest, assuming the requisite service is rendered and probable outcome of the performance condition is achieved. That estimate is revised if subsequent information indicates that the actual number of shares is likely to differ from previous estimates. Compensation expense is ultimately adjusted based on the actual achievement of service and performance targets. During the six months ended June 30, 2017 and 2016 , SJI granted 30,394 and 35,197 restricted shares, respectively, to Directors. Shares issued to Directors vest over twelve months and contain no performance conditions. As a result, 100% of the shares granted generally vest. The following table summarizes the nonvested restricted stock awards outstanding for SJI at June 30, 2017 and the assumptions used to estimate the fair value of the awards: Grants Shares Outstanding Fair Value Per Share Expected Volatility Risk-Free Interest Rate Officers & Key Employees - 2015 - TSR 33,537 $ 26.31 16.0 % 1.10 % 2015 - EGR, ROE, Time 61,586 $ 29.47 N/A N/A 2016 - TSR 66,101 $ 22.53 18.1 % 1.31 % 2016 - CEGR, Time 103,650 $ 23.52 N/A N/A 2017 - TSR 57,237 $ 32.17 20.8 % 1.47 % 2017 - CEGR, Time 110,207 $ 33.69 N/A N/A Directors - 2017 30,394 $ 33.64 N/A N/A Expected volatility is based on the actual volatility of SJI’s share price over the preceding three -year period as of the valuation date. The risk-free interest rate is based on the zero-coupon U.S. Treasury Bond, with a term equal to the three -year term of the Officers’ and other key employees’ restricted shares. As notional dividend equivalents are credited to the holders during the three -year service period, no reduction to the fair value of the award is required. As the Directors’ restricted stock awards contain no performance conditions and dividends are paid or credited to the holder during the requisite service period, the fair value of these awards are equal to the market value of the shares on the date of grant. The following table summarizes the total stock-based compensation cost to SJI for the three and six months ended June 30, 2017 and 2016 (in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 Officers & Key Employees $ 1,117 $ 798 $ 2,187 $ 1,615 Directors 256 227 512 420 Total Cost 1,373 1,025 2,699 2,035 Capitalized (104 ) (106 ) (192 ) (212 ) Net Expense $ 1,269 $ 919 $ 2,507 $ 1,823 As of June 30, 2017 , there was $7.9 million of total unrecognized compensation cost related to nonvested stock-based compensation awards granted under the plans. That cost is expected to be recognized over a weighted average period of 2.0 years. The following table summarizes information regarding restricted stock award activity for SJI during the six months ended June 30, 2017 , excluding accrued dividend equivalents: Officers &Other Key Employees Directors Weighted Average Fair Value Nonvested Shares Outstanding, January 1, 2017 295,515 35,197 $ 24.96 Granted 167,444 30,394 $ 33.24 Vested (30,641 ) (35,197 ) $ 24.75 Nonvested Shares Outstanding, June 30, 2017 432,318 30,394 $ 28.53 During the six months ended June 30, 2017 and 2016 , SJI awarded 65,628 shares to its Officers and other key employees at a market value of $2.2 million , and 13,247 shares at a market value of $0.3 million , respectively. During the six months ended June 30, 2017 and 2016 , SJI also granted 30,394 and 35,197 shares to its Directors at a market value of $1.0 million and $0.8 million , respectively. SJI has a policy of issuing new shares to satisfy its obligations under the Plan; therefore, there are no cash payment requirements resulting from the normal operation of the Plan. However, a change in control could result in such shares becoming nonforfeitable or immediately payable in cash. At the discretion of the Officers, Directors and other key employees, the receipt of vested shares can be deferred until future periods. These deferred shares are included in Treasury Stock on the condensed consolidated balance sheets. South Jersey Gas Company - Officers and other key employees of SJG participate in the stock-based compensation plans of SJI. During the six months ended June 30, 2017 and 2016 , SJG officers and other key employees were granted 24,001 and 32,732 shares of SJI restricted stock, respectively. The cost of outstanding stock awards for SJG during the six months ended June 30, 2017 and 2016 was $0.3 million and $0.2 million , respectively. Approximately one-half of these costs were capitalized on SJG's condensed balance sheets to Utility Plant. |
AFFILIATIONS, DISCONTINUED OPER
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED PARTY TRANSACTIONS | AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED-PARTY TRANSACTIONS: AFFILIATIONS — The following affiliated entities are accounted for under the equity method: PennEast Pipeline Company, LLC (PennEast) - Midstream has a 20% investment in PennEast, which is planning to construct an approximately 118 -mile natural gas pipeline that will extend from Northeastern Pennsylvania into New Jersey, with construction to begin in 2018. Energenic – US, LLC (Energenic) - Marina and a joint venture partner formed Energenic, in which Marina has a 50% equity interest. Energenic developed and operated on-site, self-contained, energy-related projects. Millennium Account Services, LLC (Millennium) - SJI and a joint venture partner formed Millennium, in which SJI has a 50% equity interest. Millennium reads utility customers’ meters on a monthly basis for a fee. Potato Creek, LLC (Potato Creek) - SJI and a joint venture partner formed Potato Creek, in which SJI has a 30% equity interest. Potato Creek owns and manages the oil, gas and mineral rights of certain real estate in Pennsylvania. During the first six months of 2017 and 2016 , SJI made net investments in unconsolidated affiliates of $19.2 million and $4.6 million , respectively. As of June 30, 2017 and December 31, 2016 , the outstanding balance of Notes Receivable – Affiliate was $15.5 million and $15.7 million , respectively. As of June 30, 2017 , $13.7 million of these notes were secured by property, plant and equipment of the affiliates, accrue interest at 7.5% and are to be repaid through 2025 . The remaining $1.8 million of these notes are unsecured and accrue interest at variable rates. SJI holds significant variable interests in these entities but is not the primary beneficiary. Consequently, these entities are accounted for under the equity method because SJI does not have both (a) the power to direct the activities of the entity that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity that could potentially be significant to the entity or the right to receive benefits from the entity that could potentially be significant to the entity. As of June 30, 2017 , SJI had a net asset of approximately $50.0 million included in Investment in Affiliates on the condensed consolidated balance sheets related to equity method investees, in addition to Notes Receivable – Affiliate as discussed above. SJI’s maximum exposure to loss from these entities as of June 30, 2017 , is limited to its combined equity contributions and the Notes Receivable-Affiliate in the aggregate amount of $65.5 million . DISCONTINUED OPERATIONS - Discontinued Operations consist of the environmental remediation activities related to the properties of South Jersey Fuel, Inc. (SJF) and the product liability litigation and environmental remediation activities related to the prior business of The Morie Company, Inc. (Morie). SJF is a subsidiary of Energy & Minerals, Inc. (EMI), an SJI subsidiary, which previously operated a fuel oil business. Morie is the former sand mining and processing subsidiary of EMI. EMI sold the common stock of Morie in 1996. SJI conducts tests annually to estimate the environmental remediation costs for these properties (see Note 11). Summarized operating results of the discontinued operations for the three and six months ended June 30, 2017 and 2016 , were (in thousands, except per share amounts): Three Months Ended Six Months Ended 2017 2016 2017 2016 Loss before Income Taxes: Sand Mining $ (15 ) $ (18 ) $ (32 ) $ (164 ) Fuel Oil (57 ) (27 ) (86 ) (62 ) Income Tax Benefits 25 16 41 79 Loss from Discontinued Operations — Net $ (47 ) $ (29 ) $ (77 ) $ (147 ) Earnings Per Common Share from Discontinued Operations — Net: Basic and Diluted $ — $ — $ — $ — SJG RELATED-PARTY TRANSACTIONS - There have been no significant changes in the nature of SJG’s related-party transactions since December 31, 2016 . See Note 5 to the Financial Statements in Item 8 of SJG’s Form 10-K for the year ended December 31, 2016 for a detailed description of the related parties and their associated transactions. A summary of related party transactions involving SJG, excluding pass-through items, included in SJG's Operating Revenues were as follows (in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 Operating Revenues/Affiliates: SJRG $ 1,248 $ 421 $ 2,211 $ 4,422 Marina 65 68 147 164 Other 21 21 42 42 Total Operating Revenue/Affiliates $ 1,334 $ 510 $ 2,400 $ 4,628 Related-party transactions involving SJG, excluding pass-through items, included in SJG's Cost of Sales and Operating Expenses were as follows (in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 Costs of Sales/Affiliates (Excluding depreciation) SJRG $ 496 $ 1,514 $ 10,946 $ 9,503 Operations Expense/Affiliates: SJI $ 4,988 $ 5,315 $ 11,038 $ 9,870 Millennium 712 701 1,420 1,395 Other (41 ) (49 ) (80 ) (106 ) Total Operations Expense/Affiliates $ 5,659 $ 5,967 $ 12,378 $ 11,159 |
COMMON STOCK
COMMON STOCK | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
COMMON STOCK | COMMON STOCK: The following shares were issued and outstanding for SJI: 2017 Beginning Balance, January 1 79,478,055 New Issuances During the Period: Stock-Based Compensation Plan 70,959 Ending Balance, June 30 79,549,014 The par value ( $1.25 per share) of stock issued was recorded in Common Stock and the net excess over par value of approximately $1.1 million was recorded in Premium on Common Stock. In May 2016, SJI issued and sold 8,050,000 shares of its common stock, par value $1.25 per share pursuant to a public offering, raising net proceeds of approximately $203.6 million . The net proceeds from this offering were or will be used for capital expenditures, primarily for regulated businesses, including infrastructure investments at its utility business. There were 2,339,139 shares of SJG's common stock (par value $2.50 per share) outstanding as of June 30, 2017 . SJG did not issue any new shares during the period. SJI owns all of the outstanding common stock of SJG. SJI's EARNINGS PER COMMON SHARE (EPS) - SJI's Basic EPS is based on the weighted-average number of common shares outstanding. The incremental shares required for inclusion in the denominator for the diluted EPS calculation were 136,332 and 292,782 for the six months ended June 30, 2017 and 2016, respectively . For the three months ended June 30, 2017 and 2016, incremental shares of 150,852 and 297,061 were not included in the denominator for the diluted EPS calculation because they would have an antidilutive effect on EPS. These additional shares relate to SJI's restricted stock as discussed in Note 2. DIVIDEND REINVESTMENT PLAN (DRP) - SJI offers a DRP which allows participating shareholders to purchase shares of SJI common stock by automatic reinvestment of dividends or optional purchases. Prior to May 1, 2016 shares of common stock offered by the DRP had been issued directly by SJI from its authorized but unissued shares of common stock. SJI raised $10.8 million of equity capital through the DRP during the six months ended June 30, 2016 . Effective May 1, 2016, SJI switched to purchasing shares on the open market to fund share purchases by DRP participants. SJI does not intend to issue any new equity capital via the DRP in 2017. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2017 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS: RESTRICTED INVESTMENTS — Marina is required to maintain escrow accounts related to ongoing capital projects as well as unused loan proceeds pending approval of construction expenditures. As of June 30, 2017 and December 31, 2016 , the escrowed funds, including interest earned, totaled $0.3 million and $1.9 million , respectively, which are recorded in Restricted Investments on the condensed consolidated balance sheets. SJI and SJG maintain margin accounts with selected counterparties to support their risk management activities. The balances required to be held in these margin accounts increase as the net value of the outstanding energy-related contracts with the respective counterparties decrease. As of June 30, 2017 , SJI's balances in these accounts totaled $1.5 million held by the counterparty, which is recorded in Restricted Investments on the condensed consolidated balance sheets, and $2.8 million held by SJI as collateral, which is recorded in Other Current Liabilities on the condensed consolidated balance sheets. As of December 31, 2016 , SJI's balances in these accounts totaled $11.7 million held by the counterparty and was recorded in Restricted Investments on the condensed consolidated balance sheets. As of June 30, 2017 , SJG's balance held by the counterparty totaled $1.5 million and was recorded in Restricted Investments on the condensed balance sheets. As of December 31, 2016 , SJG's balance held by SJG as collateral was $3.6 million which was recorded in Accounts Payable - Other on the condensed balance sheets. The carrying amounts of the Restricted Investments for both SJI and SJG approximate their fair values at June 30, 2017 and December 31, 2016 , which would be included in Level 1 of the fair value hierarchy (see Note 13). The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows (in thousands): As of June 30, 2017 Balance Sheet Line Item SJI SJG Cash and Cash Equivalents $ 10,122 $ 1,096 Restricted Investments 1,842 1,542 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 11,964 $ 2,638 As of December 31, 2016 Balance Sheet Line Item SJI SJG Cash and Cash Equivalents $ 18,282 $ 1,359 Restricted Investments 13,628 32 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 31,910 $ 1,391 INVESTMENT IN AFFILIATES - During 2011, subsidiaries of Energenic, in which Marina has a 50% equity interest, entered into 20 -year contracts to build, own and operate a central energy center and energy distribution system for a new hotel, casino and entertainment complex in Atlantic City, New Jersey. The complex commenced operations in April 2012, and as a result, Energenic subsidiaries began providing full energy services to the complex. In June 2014, the parent company of the hotel, casino and entertainment complex filed petitions in U.S. Bankruptcy Court to facilitate a sale of substantially all of its assets. The complex ceased normal business operations in September 2014. Energenic subsidiaries continued to provide limited energy services to the complex during the shutdown period under a temporary agreement with the trustee. The hotel, casino and entertainment complex was sold in April 2015. As of December 31, 2015, the Energenic subsidiaries were providing limited services to the complex under a short-term agreement with the new owner. However, the Energenic subsidiaries had not been able to secure a permanent or long-term energy services agreement with the new owner. The central energy center and energy distribution system owned by the Energenic subsidiaries was financed in part by the issuance of bonds during 2011. These bonds were collateralized primarily by certain assets of the central energy center and revenue from the energy services agreement with the hotel, casino and entertainment complex. During 2015, due to the cessation of normal business operations of the complex and the inability of the Energenic subsidiaries to meet its obligations under the bonds, the trustee for the bondholders filed suit to foreclose on certain assets of the central energy center. In November 2015 during settlement discussions, the bondholders alleged, among other things, that they were entitled to recover from Energenic itself, any amounts owed under the bonds that were not covered by the collateral, including principal, interest and attorney’s fees. The bondholders’ assertion was based on inconsistent language in the bond documents. In January 2016, Energenic and certain subsidiaries reached a multi-party settlement with the bondholders. This agreement resolves all outstanding litigation and transfers ownership of the bondholders’ collateral to the owners of the entertainment complex. The Company's share of this settlement was $7.5 million , which was accrued by Energenic as of December 31, 2015 and paid in 2016. The Company entered into agreements with its insurance carrier and external legal advisors to recover, net of legal costs, approximately $7.0 million of costs associated with the bondholder settlement discussed above. The Company received $2.1 million in the second quarter of 2016, which is included in Other Income on the statements of consolidated income for the year ended December 31, 2016, and $5.3 million was received in the third quarter of 2016 and is included in Equity in Earnings of Affiliated Companies on the statements of consolidated income for the year ended December 31, 2016, as the loss recorded in the prior year was included in this line item on the statements of consolidated income for the year ended December 31, 2015. As of June 30, 2017 , SJI had approximately $13.7 million included in Notes Receivable - Affiliate on the condensed consolidated balance sheets, due from Energenic, which is secured by its cogeneration assets for energy service projects. This note is subject to a reimbursement agreement that secures reimbursement for SJI, from its joint venture partner, of a proportionate share of any amounts that are not repaid. Management will continue to monitor the situation surrounding the cogeneration assets and will evaluate the carrying value of the investment and the note receivable as future events occur. LONG-TERM RECEIVABLES - SJG provides financing to customers for the purpose of attracting conversions to natural gas heating systems from competing fuel sources. The terms of these loans call for customers to make monthly payments over periods ranging from five to ten years, with no interest. The carrying amounts of such loans were $8.1 million and $9.5 million as of June 30, 2017 and December 31, 2016 , respectively. The current portion of these receivables is reflected in Accounts Receivable and the non-current portion is reflected in Contract Receivables on the condensed consolidated balance sheets. The carrying amounts noted above are net of unamortized discounts resulting from imputed interest in the amount of $0.8 million and $0.9 million as of June 30, 2017 and December 31, 2016 , respectively. The annualized amortization to interest is not material to SJI’s or SJG's condensed consolidated financial statements. The carrying amounts of these receivables approximate their fair value at June 30, 2017 and December 31, 2016 , which would be included in Level 2 of the fair value hierarchy (see Note 13). CREDIT RISK - As of June 30, 2017 , SJI had approximately $9.2 million , or 17.1% , of the current and noncurrent Derivatives – Energy Related Assets transacted with two counterparties. One counterparty has contracts with a large number of diverse customers which minimizes the concentration of this risk. A portion of these contracts may be assigned to SJI in the event of default by the counterparty. The second counterparty is investment-grade rated with a rating of Baa1. FINANCIAL INSTRUMENTS NOT CARRIED AT FAIR VALUE - The fair value of a financial instrument is the market price to sell an asset or transfer a liability at the measurement date. The carrying amounts of SJI's and SJG's financial instruments approximate their fair values at June 30, 2017 and December 31, 2016 , except as noted below. • For Long-Term Debt, in estimating the fair value, SJI and SJG use the present value of remaining cash flows at the balance sheet date. SJI and SJG based the estimates on interest rates available at the end of each period for debt with similar terms and maturities (Level 2 in the fair value hierarchy, see Note 13). • The estimated fair values of SJI's long-term debt (which includes SJG and all consolidated subsidiaries), including current maturities, as of June 30, 2017 and December 31, 2016 , were $1,106.7 million and $1,080.8 million , respectively. The carrying amounts of SJI's long-term debt, including current maturities, as of June 30, 2017 and December 31, 2016 , were $1,082.6 million and $1,039.9 million , respectively. SJI's carrying amounts as of June 30, 2017 and December 31, 2016 are net of unamortized debt issuance costs of $8.5 million and $7.6 million , respectively. • The estimated fair values of SJG's long-term debt, including current maturities, as of June 30, 2017 and December 31, 2016 , were $777.1 million and $673.1 million , respectively. The carrying amount of SJG's long-term debt, including current maturities, as of June 30, 2017 and December 31, 2016 , was $758.4 million and $639.1 million , respectively. The carrying amounts as of June 30, 2017 and December 31, 2016 are net of unamortized debt issuance costs of $7.6 million and $6.0 million , respectively. OTHER FINANCIAL INSTRUMENTS - The carrying amounts of SJI's and SJG's other financial instruments approximate their fair values at June 30, 2017 and December 31, 2016 . |
SEGMENTS OF BUSINESS
SEGMENTS OF BUSINESS | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
SEGMENTS OF BUSINESS | SEGMENTS OF BUSINESS: SJI operates in several different reportable operating segments which reflect the financial information regularly evaluated by the chief operating decision maker. These segments are as follows: • Gas utility operations (SJG) consist primarily of natural gas distribution to residential, commercial and industrial customers. The result of SJG are only included in this operating segment. • Wholesale energy operations include the activities of SJRG and SJEX. • SJE is involved in both retail gas and retail electric activities. ◦ Retail gas and other operations include natural gas acquisition and transportation service business lines. ◦ Retail electric operations consist of electricity acquisition and transportation to commercial, industrial and residential customers. • On-site energy production consists of Marina's thermal energy facility and other energy-related projects. Also included in this segment are the activities of ACB, ACLE, BCLE, SCLE, SXLE, MCS, NBS and SBS. • Appliance service operations includes SJESP, which services residential and small commercial HVAC systems, installs small commercial HVAC systems, provides plumbing services and services appliances under warranty via a subcontractor arrangement as well as on a time and materials basis. In May 2017, SJESP entered into an agreement to sell certain assets of its residential and small commercial HVAC and plumbing business to a third party. This transaction is expected to be completed by August 31, 2017. • Midstream was formed to invest in infrastructure and other midstream projects, including a current project to build a natural gas pipeline in Pennsylvania and New Jersey. The activities of Midstream are a part of the Corporate and Services segment. SJI groups its nonutility operations into two categories: Energy Group and Energy Services. Energy Group includes wholesale energy, retail gas and other, and retail electric operations. Energy Services includes on-site energy production and appliance service operations. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Intersegment sales and transfers are treated as if the sales or transfers were to third parties at current market prices. Information about SJI’s operations in different reportable operating segments is presented below (in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 Operating Revenues: Gas Utility Operations $ 83,251 $ 68,762 $ 280,065 $ 256,528 Energy Group: Wholesale Energy Operations 76,409 (1,309 ) 203,926 63,765 Retail Gas and Other Operations 21,759 22,305 58,637 52,038 Retail Electric Operations 42,620 43,065 91,577 82,556 Subtotal Energy Group 140,788 64,061 354,140 198,359 Energy Services: On-Site Energy Production 25,135 23,043 44,747 39,364 Appliance Service Operations 1,980 2,050 3,638 3,938 Subtotal Energy Services 27,115 25,093 48,385 43,302 Corporate and Services 11,013 8,417 22,609 17,293 Subtotal 262,167 166,333 705,199 515,482 Intersegment Sales (17,793 ) (11,931 ) (34,996 ) (28,045 ) Total Operating Revenues $ 244,374 $ 154,402 $ 670,203 $ 487,437 Three Months Ended Six Months Ended 2017 2016 2017 2016 Operating (Loss) Income: Gas Utility Operations $ 8,156 $ 9,931 $ 88,802 $ 85,704 Energy Group: Wholesale Energy Operations (18,191 ) (31,149 ) (29,817 ) 7,095 Retail Gas and Other Operations (1,560 ) 6,250 (3,227 ) 5,491 Retail Electric Operations 1,155 2,277 2,461 2,862 Subtotal Energy Group (18,596 ) (22,622 ) (30,583 ) 15,448 Energy Services: On-Site Energy Production 5,104 4,561 3,135 4,472 Appliance Service Operations 66 258 (6 ) 302 Subtotal Energy Services 5,170 4,819 3,129 4,774 Corporate and Services 706 (114 ) 1,774 341 Total Operating (Loss) Income $ (4,564 ) $ (7,986 ) $ 63,122 $ 106,267 Depreciation and Amortization: Gas Utility Operations $ 17,446 $ 15,788 $ 34,808 $ 31,414 Energy Group: Wholesale Energy Operations 33 204 61 408 Retail Gas and Other Operations 84 83 167 168 Subtotal Energy Group 117 287 228 576 Energy Services: On-Site Energy Production 11,674 10,895 23,267 20,814 Appliance Service Operations 56 91 110 175 Subtotal Energy Services 11,730 10,986 23,377 20,989 Corporate and Services 418 260 819 483 Total Depreciation and Amortization $ 29,711 $ 27,321 $ 59,232 $ 53,462 Interest Charges: Gas Utility Operations $ 6,077 $ 4,552 $ 11,955 $ 9,339 Energy Group: Wholesale Energy Operations 134 1 3,193 65 Retail Gas and Other Operations 64 78 149 210 Subtotal Energy Group 198 79 3,342 275 Energy Services: On-Site Energy Production 3,877 3,442 9,691 6,904 Corporate and Services 4,941 2,858 10,182 6,310 Subtotal 15,093 10,931 35,170 22,828 Intersegment Borrowings (4,114 ) (2,702 ) (7,446 ) (5,439 ) Total Interest Charges $ 10,979 $ 8,229 $ 27,724 $ 17,389 Three Months Ended Six Months Ended 2017 2016 2017 2016 Income Taxes: Gas Utility Operations $ 1,431 $ 1,415 $ 31,342 $ 28,819 Energy Group: Wholesale Energy Operations (6,384 ) (12,258 ) (12,703 ) 2,479 Retail Gas and Other Operations (593 ) 2,450 (1,040 ) 2,282 Retail Electric Operations 472 931 1,007 1,170 Subtotal Energy Group (6,505 ) (8,877 ) (12,736 ) 5,931 Energy Services: On-Site Energy Production 219 110 (2,850 ) (2,902 ) Appliance Service Operations 36 126 19 152 Subtotal Energy Services 255 236 (2,831 ) (2,750 ) Corporate and Services (725 ) 37 551 78 Total Income Taxes $ (5,544 ) $ (7,189 ) $ 16,326 $ 32,078 Property Additions: Gas Utility Operations $ 66,128 $ 50,133 $ 128,408 $ 101,503 Energy Group: Wholesale Energy Operations 4 1 7 7 Retail Gas and Other Operations 133 354 428 725 Subtotal Energy Group 137 355 435 732 Energy Services: On-Site Energy Production 2,917 2,665 10,266 5,316 Appliance Service Operations 254 251 260 352 Subtotal Energy Services 3,171 2,916 10,526 5,668 Corporate and Services 839 564 1,084 727 Total Property Additions $ 70,275 $ 53,968 $ 140,453 $ 108,630 June 30, 2017 December 31, 2016 Identifiable Assets: Gas Utility Operations $ 2,673,743 $ 2,551,923 Energy Group: Wholesale Energy Operations 165,932 233,019 Retail Gas and Other Operations 36,954 52,729 Retail Electric Operations 34,480 41,280 Subtotal Energy Group 237,366 327,028 Energy Services: On-Site Energy Production 719,556 767,710 Appliance Service Operations 2,571 2,879 Subtotal Energy Services 722,127 770,589 Discontinued Operations 1,778 1,756 Corporate and Services 708,131 649,795 Intersegment Assets (601,285 ) (570,524 ) Total Identifiable Assets $ 3,741,860 $ 3,730,567 |
RATES AND REGULATORY ACTIONS
RATES AND REGULATORY ACTIONS | 6 Months Ended |
Jun. 30, 2017 | |
Public Utilities, General Disclosures [Abstract] | |
RATES AND REGULATORY ACTIONS | RATES AND REGULATORY ACTIONS: SJG is subject to the rules and regulations of the New Jersey Board of Public Utilities (BPU). In January 2017, SJG filed a base rate case with the BPU to increase its base rates in order to obtain a return on new capital investments made by SJG since the settlement of its last base rate case in 2014. SJG expects the base rate case to be concluded during 2017. Also in January 2017, the BPU issued an order approving SJG’s request to extend the expiration date of its Energy Efficiency Programs (EEPs) from August 2017 to December 2018, without any modification to the programs or the amount of the previously authorized budget of $36.3 million , inclusive of operation and maintenance expenses. There have been no other significant regulatory actions or changes to SJG's rate structure since December 31, 2016 . See Note 10 to the Consolidated Financial Statements in Item 8 of SJI's Annual Report on Form 10-K for the year ended December 31, 2016 and Note 3 to the Financial Statements in Item 8 of SJG’s Annual Report on Form 10-K for the year ended December 31, 2016 . |
REGULATORY ASSETS AND REGULATOR
REGULATORY ASSETS AND REGULATORY LIABILITIES | 6 Months Ended |
Jun. 30, 2017 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
REGULATORY ASSETS AND REGULATORY LIABILITIES | REGULATORY ASSETS AND REGULATORY LIABILITIES: There have been no significant changes to the nature of SJG’s regulatory assets and liabilities since December 31, 2016 , which are described in Note 11 to the Consolidated Financial Statements in Item 8 of SJI’s Annual Report on Form 10-K for the year ended December 31, 2016 and Note 4 to the Financial Statements in Item 8 of SJG’s Annual Report on Form 10-K for the year ended December 31, 2016 . SJI has no regulatory assets or regulatory liabilities other than those of SJG. SJI's and SJG's Regulatory Assets consisted of the following items (in thousands): June 30, 2017 December 31, 2016 Environmental Remediation Costs: Expended - Net $ 89,873 $ 71,997 Liability for Future Expenditures 161,681 153,047 Deferred Asset Retirement Obligation Costs 42,716 43,014 Deferred Pension and Other Postretirement Benefit Costs 85,693 85,693 Deferred Gas Costs - Net 3,598 — Conservation Incentive Program Receivable 31,933 27,567 Societal Benefit Costs Receivable 443 — Deferred Interest Rate Contracts 7,298 7,365 Energy Efficiency Tracker 511 219 Pipeline Supplier Service Charges 1,355 2,122 Pipeline Integrity Cost 5,061 4,810 AFUDC - Equity Related Deferrals 12,422 12,434 Other Regulatory Assets 2,728 2,478 Total Regulatory Assets $ 445,312 $ 410,746 ENVIRONMENTAL REMEDIATION COSTS - SJG has two regulatory assets associated with environmental costs related to the cleanup of 12 sites where SJG or its predecessors previously operated gas manufacturing plants. The first asset, "Environmental Remediation Cost: Expended - Net," represents what was actually spent to clean up the sites, less recoveries through the Remediation Adjustment Clause (RAC) and insurance carriers. These costs meet the deferral requirements of GAAP, as the BPU allows SJG to recover such expenditures through the RAC. The other asset, "Environmental Remediation Cost: Liability for Future Expenditures," relates to estimated future expenditures required to complete the remediation of these sites. SJG recorded this estimated amount as a regulatory asset with the corresponding current and noncurrent liabilities on the balance sheets under the captions "Current Liabilities" (both SJI and SJG), "Deferred Credits and Other Noncurrent Liabilities" (SJI) and "Regulatory and Other Noncurrent Liabilities" (SJG). The BPU allows SJG to recover the deferred costs over seven -year periods after they are spent. The increase from December 31, 2016 is a result of expenditures made during the first six months of 2017 and an increase in the expected future expenditures for remediation activities, primarily due to an increase in contractor costs at two of the sites currently under remediation. DEFERRED GAS COSTS - NET - Over/Under collections of gas costs are monitored through SJG's Basic Gas Supply Service (BGSS) mechanism. Net undercollected gas costs are classified as a regulatory asset, and net overcollected gas costs are classified as a regulatory liability. Derivative contracts used to hedge natural gas purchases are also included in the BGSS, subject to BPU approval. The change in the BGSS from a $17.8 million regulatory liability at December 31, 2016 to a $3.6 million regulatory asset at June 30, 2017 was primarily due to an unfavorable court ruling related to a pricing dispute between SJG and a supplier (See Notes 11 and 16). CONSERVATION INCENTIVE PROGRAM (CIP) RECEIVABLE – The CIP tracking mechanism adjusts earnings when actual usage per customer experienced during the period varies from an established baseline usage per customer. Actual usage per customer was less than the established baseline during the first six months of 2017, resulting in an increase in the receivable. This is primarily the result of warm weather experienced in the region. SJI's and SJG's Regulatory Liabilities consisted of the following items (in thousands): June 30, 2017 December 31, 2016 Excess Plant Removal Costs $ 24,655 $ 28,226 Deferred Revenues - Net — 17,800 Societal Benefit Costs — 3,095 Total Regulatory Liabilities $ 24,655 $ 49,121 DEFERRED REVENUES - NET - See discussion under "Deferred Gas Costs - Net" above. SOCIETAL BENEFIT COSTS (SBC) - This regulatory asset primarily represents the deferred expenses incurred under the New Jersey Clean Energy Program, which is a mechanism designed to recover costs associated with energy efficiency and renewable energy programs. Previous SBC rates produced recoveries greater than SBC costs, which resulted in the regulatory liability. The decrease in the liability from December 31, 2016 is due to an increase in rates. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | 6 Months Ended |
Jun. 30, 2017 | |
Defined Benefit Plan [Abstract] | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | PENSION AND OTHER POSTRETIREMENT BENEFITS: For the three and six months ended June 30, 2017 and 2016 , net periodic benefit cost related to the employee and officer pension and other postretirement benefit plans for SJI consisted of the following components (in thousands): Pension Benefits Three Months Ended Six Months Ended 2017 2016 2017 2016 Service Cost $ 1,112 $ 1,106 $ 2,494 $ 2,421 Interest Cost 2,931 3,062 5,886 6,062 Expected Return on Plan Assets (3,529 ) (3,374 ) (7,053 ) (6,754 ) Amortizations: Prior Service Cost 33 53 66 106 Actuarial Loss 2,528 2,388 5,141 4,697 Net Periodic Benefit Cost 3,075 3,235 6,534 6,532 Capitalized Benefit Cost (1,129 ) (1,213 ) (2,400 ) (2,400 ) Deferred Benefit Cost (139 ) (161 ) (300 ) (322 ) Total Net Periodic Benefit Expense $ 1,807 $ 1,861 $ 3,834 $ 3,810 Other Postretirement Benefits Three Months Ended Six Months Ended 2017 2016 2017 2016 Service Cost $ 208 $ 195 $ 455 $ 425 Interest Cost 609 654 1,209 1,307 Expected Return on Plan Assets (853 ) (776 ) (1,705 ) (1,552 ) Amortizations: Prior Service Cost (86 ) (86 ) (172 ) (172 ) Actuarial Loss 307 261 619 555 Net Periodic Benefit Cost 185 248 406 563 Capitalized Benefit Cost (46 ) (45 ) (101 ) (146 ) Total Net Periodic Benefit Expense $ 139 $ 203 $ 305 $ 417 The Pension Benefits Net Periodic Benefit Cost incurred by SJG was approximately $2.3 million of the totals presented in the table above for both the three months ended June 30, 2017 and 2016, and $4.8 million of the totals presented in the table above for both the six months ended June 30, 2017 and 2016. The Other Postretirement Benefits Net Periodic Benefit Cost incurred by SJG was approximately $0.1 million of the totals presented in the table above for both the three months ended June 30, 2017 and 2016, and $0.2 million and $0.3 million of the totals presented in the table above for the six months ended June 30, 2017 and 2016, respectively . Capitalized benefit costs reflected in the table above relate to SJG’s construction program. Deferred benefit costs relate to SJG's deferral of incremental expense associated with the adoption of new mortality tables effective December 31, 2014, and subsequent adjustments thereto in both 2015 and 2016. Deferred benefit costs are expected to be recovered through rates as part of SJG's next base rate case. SJI contributed $10.0 million to the pension plans, of which SJG contributed $8.0 million , in January 2017. No contributions were made to the pension plans by either SJI or SJG during the six months ended June 30, 2016 . SJI and SJG do not expect to make any additional contributions to the pension plans in 2017; however, changes in future investment performance and discount rates may ultimately result in a contribution. Payments related to the unfunded supplemental executive retirement plan (SERP) are expected to be approximately $2.5 million in 2017 . SJG also has a regulatory obligation to contribute approximately $3.6 million annually to the other postretirement benefit plans’ trusts, less direct costs incurred. See Note 12 to the Consolidated Financial Statements in Item 8 of SJI’s Annual Report on Form 10-K for the year ended December 31, 2016 for additional information related to SJI’s pension and other postretirement benefits and Note 11 to the Financial Statements in Item 8 of SJG’s Form 10-K for the year ended December 31, 2016 for additional information related to SJG’s pension and other postretirement benefits. |
LINES OF CREDIT
LINES OF CREDIT | 6 Months Ended |
Jun. 30, 2017 | |
Line of Credit Facility [Abstract] | |
LINES OF CREDIT | LINES OF CREDIT: Credit facilities and available liquidity as of June 30, 2017 were as follows (in thousands): Company Total Facility Usage Available Liquidity Expiration Date SJI: Revolving Credit Facilities $ 450,000 $ 303,300 (A) $ 146,700 August 2017; February 2018 (C) Total SJI 450,000 303,300 146,700 SJG: Commercial Paper Program/Revolving Credit Facility 200,000 3,600 (B) 196,400 May 2018 Uncommitted Bank Line 10,000 — 10,000 August 2017 (C) Total SJG 210,000 3,600 206,400 Total $ 660,000 $ 306,900 $ 353,100 (A) Includes letters of credit outstanding in the amount of $9.8 million . (B) Includes letters of credit outstanding in the amount of $0.8 million . (C) SJI and SJG anticipate that the credit facilities expiring in August 2017 will be renewed for a multi-year period. The SJG facilities are restricted as to use and availability specifically to SJG; however, if necessary, the SJI facilities can also be used to support SJG’s liquidity needs. Borrowings under these credit facilities are at market rates. SJI's weighted average interest rate on these borrowings, which changes daily, was 2.21% and 1.43% at June 30, 2017 and 2016 , respectively. SJG's weighted average interest rate on these borrowings, which changes daily, was 1.36% and 0.67% at June 30, 2017 and 2016 , respectively. SJI's average borrowings outstanding under these credit facilities (which includes SJG), not including letters of credit, during the six months ended June 30, 2017 and 2016 were $272.4 million and $325.5 million , respectively. The maximum amounts outstanding under these credit facilities, not including letters of credit, during the six months ended June 30, 2017 and 2016 were $354.1 million and $467.7 million , respectively. SJG's average borrowings outstanding under its credit facilities during the six months ended June 30, 2017 and 2016 were $20.2 million and $73.7 million , respectively. The maximum amounts outstanding under its credit facilities during the six months ended June 30, 2017 and 2016 were $110.1 million and $141.7 million , respectively. The SJI and SJG facilities are provided by a syndicate of banks and contain one financial covenant limiting the ratio of indebtedness to total capitalization (as defined in the respective credit agreements) to not more than 0.65 to 1, measured at the end of each fiscal quarter. SJI and SJG were in compliance with this covenant as of June 30, 2017 . SJG has a commercial paper program under which SJG may issue short-term, unsecured promissory notes to qualified investors up to a maximum aggregate amount outstanding at any time of $200.0 million . The notes have fixed maturities which vary by note, but may not exceed 270 days from the date of issue. Proceeds from the notes are used for general corporate purposes. SJG uses the commercial paper program in tandem with its $200.0 million revolving credit facility and does not expect the principal amount of borrowings outstanding under the commercial paper program and the credit facility at any time to exceed an aggregate of $200.0 million . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES: GUARANTEES — As of June 30, 2017 , SJI had issued $6.1 million of parental guarantees on behalf of an unconsolidated subsidiary. These guarantees generally expire within the next two years and were issued to enable the subsidiary to market retail natural gas. GAS SUPPLY CONTRACTS - In the normal course of business, SJG and SJRG have entered into long-term contracts for natural gas supplies, firm transportation and gas storage service. The earliest date at which any of the primary terms of these contracts expire is October 2017. The transportation and storage service agreements with interstate pipeline suppliers were made under Federal Energy Regulatory Commission (FERC) approved tariffs. SJG's cumulative obligation for gas supply-related demand charges and reservation fees paid to suppliers for these services averages approximately $5.1 million per month and is recovered on a current basis through the BGSS. SJRG's cumulative obligation for demand charges and reservation fees paid to suppliers for these services is approximately $0.5 million per month. SJRG has also committed to purchase a minimum of 635,000 dts/d and up to 901,500 dts/d of natural gas, from various suppliers, for terms ranging from 3 to 10 years at index-based prices. COLLECTIVE BARGAINING AGREEMENTS — Unionized personnel represent approximately 42% and 59% of SJI's and SJG's workforce at June 30, 2017 , respectively. SJI has collective bargaining agreements with two unions that represent these employees: the International Brotherhood of Electrical Workers (IBEW) Local 1293 and the International Association of Machinists and Aerospace Workers (IAM) Local 76. SJG and SJESP employees represented by the IBEW operate under collective bargaining agreements that run through February 2018. SJG's remaining unionized employees are represented by the IAM and operate under collective bargaining agreements that run through August 2017. This agreement is currently under negotiation. STANDBY LETTERS OF CREDIT — As of June 30, 2017 , SJI provided $9.8 million of standby letters of credit through its revolving credit facility to enable SJE to market retail electricity and for various construction and operating activities. SJG provided a $0.8 million letter of credit under its revolving credit facility to support the remediation of environmental conditions at certain locations in SJG's service territory. SJG has provided $25.2 million of additional letters of credit under a separate facility outside of the revolving credit facility to support variable-rate demand bonds issued through the New Jersey Economic Development Authority (NJEDA) to finance the expansion of SJG’s natural gas distribution system. In May 2017, Marina redeemed its variable-rate demand bonds (see Note 14) and the related letters of credit reimbursement agreements, which totaled $62.3 million , were terminated. PENDING LITIGATION — SJI and SJG are subject to claims arising in the ordinary course of business and other legal proceedings. SJI has been named in, among other actions, certain gas supply and capacity management contract disputes and certain product liability claims related to our former sand mining subsidiary. SJI is currently involved in a pricing dispute related to two long-term gas supply contracts. On May 8, 2017, a jury from the United States District Court for the District of Colorado returned a verdict in favor of the supplier. On July 21, 2017, the Court entered Final Judgment against SJG and SJRG. As a result of this ruling, SJG and SJRG have accrued $16.7 million and $45.0 million , respectively, through June 30, 2017 . We believe that the amount to be paid by SJG reflects a gas cost and will be recovered from SJG’s customers through adjusted rates. As such, this amount was recorded as both an Accounts Payable and a reduction of Regulatory Liabilities on the condensed consolidated balance sheets of both SJI and SJG as of June 30, 2017 . The amount associated with SJRG was also recorded as an Accounts Payable on the condensed consolidated balance sheets of SJI as of June 30, 2017 , with charges of $0.4 million and $41.0 million to Cost of Sales - Nonutility and $0.6 million and $4.0 million to Interest Charges on the condensed consolidated statements of income of SJI for the three and six months ended June 30, 2017 , respectively. SJI intends to appeal this judgment. During the pendency of the appeal, SJI continues to dispute the supplier invoices received, and has created a reserve to reflect the difference between the invoiced and paid amounts. SJI was involved in a dispute in the Court of Common Pleas of Philadelphia related to a three -year capacity management contract with a counterparty whereby SJI is the manager. The counterparty is claiming that it is owed approximately $13.3 million , plus interest, from SJRG under a sharing credit within the contract. SJI has accrued $9.5 million as of June 30, 2017 in anticipation of a potential settlement of this matter. Liabilities related to claims are accrued when the amount or range of amounts of probable settlement costs or other charges for these claims can be reasonably estimated. For matters other than the pricing dispute related to two long-term gas supply contracts, as well as the dispute related to a three -year capacity management contract, both noted above, SJI has accrued approximately $3.0 million and $ 3.1 million related to all claims in the aggregate as of June 30, 2017 and December 31, 2016 , respectively, of which SJG has accrued approximately $0.7 million and $0.6 million as of June 30, 2017 and December 31, 2016 , respectively. Although SJI and SJG do not presently believe that these matters will have a material adverse effect on its business, given the inherent uncertainties in such situations, SJI and SJG can provide no assurance regarding the outcome of litigation. ENVIRONMENTAL REMEDIATION COSTS — SJG incurred and recorded costs for environmental cleanup of 12 sites where SJG or its predecessors operated gas manufacturing plants. SJG stopped manufacturing gas in the 1950s. SJI and some of its nonutility subsidiaries also recorded costs for environmental cleanup of sites where SJF previously operated a fuel oil business and Morie maintained equipment, fueling stations and storage. Other than the changes discussed in Note 8 to the condensed consolidated financial statements, there have been no changes to the status of SJI’s environmental remediation efforts since December 31, 2016 , as described in Note 15 to the Consolidated Financial Statements in Item 8 of SJI’s Annual Report on Form 10-K for the year ended December 31, 2016 and in Note 12 to the Financial Statements in Item 8 of SJG’s Annual Report on Form 10-K for the year ended December 31, 2016 . |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS: Certain SJI subsidiaries, including SJG, are involved in buying, selling, transporting and storing natural gas and buying and selling retail electricity for their own accounts as well as managing these activities for third parties. These subsidiaries are subject to market risk on expected future purchases and sales due to commodity price fluctuations. SJI and SJG use a variety of derivative instruments to limit this exposure to market risk in accordance with strict corporate guidelines. These derivative instruments include forward contracts, swap agreements, options contracts and futures contracts. As of June 30, 2017 , SJI had outstanding derivative contracts as follows (1 MMdts = one million decatherms; 1 MMmWh = one million megawatt hours): SJI Consolidated SJG Derivative contracts intended to limit exposure to market risk to: Expected future purchases of natural gas (in MMdts) 50.9 10.8 Expected future sales of natural gas (in MMdts) 46.7 0.1 Expected future purchases of electricity (in MMmWh) 2.7 — Expected future sales of electricity (in MMmWh) 2.3 — Basis and Index related net purchase (sales) contracts (in MMdts) 92.2 1.1 These contracts, which have not been designated as hedging instruments under GAAP, are measured at fair value and recorded in Derivatives - Energy Related Assets or Derivatives - Energy Related Liabilities on the condensed consolidated balance sheets of SJI and SJG. For SJE and SJRG contracts, the net unrealized pre-tax gains (losses) for these energy-related commodity contracts are included with realized gains (losses) in Operating Revenues – Nonutility on the condensed consolidated statements of income for SJI. These gains (losses) were $(7.9) million and $(21.4) million for the three months ended June 30, 2017 and 2016, respectively , and $6.8 million and $(2.7) million for the six months ended June 30, 2017 and 2016, respectively . For SJG's contracts, the costs or benefits are recoverable through the BGSS clause, subject to BPU approval. As a result, the net unrealized pre-tax gains and losses for these energy-related commodity contracts are included with realized gains and losses in Regulatory Assets or Regulatory Liabilities on the condensed consolidated balance sheets of both SJI and SJG. As of June 30, 2017 and December 31, 2016 , SJG had $5.8 million of unrealized gains and $4.4 million of unrealized losses, respectively, along with a net realized gain of $1.3 million and a net realized loss of $2.8 million , respectively, included in its BGSS related to energy-related commodity contracts. SJI, including SJG, has also entered into interest rate derivatives to hedge exposure to increasing interest rates and the impact of those rates on cash flows of variable-rate debt. These interest rate derivatives, some of which had been designated as hedging instruments under GAAP, are measured at fair value and recorded in Derivatives - Other on the condensed consolidated balance sheets. Hedge accounting has been discontinued prospectively for these derivatives. As a result, any unrealized gains and losses on these derivatives, that were previously included in Accumulated Other Comprehensive Loss (AOCL) on the condensed consolidated balance sheets, are being recorded in earnings over the remaining life of the derivative. In March 2017, SJI entered into a new interest rate derivative and amended the existing interest rate derivative linked to unrealized losses previously recorded in AOCL. SJI reclassified $2.4 million of pre-tax unrealized loss in AOCL to Interest Charges on the condensed consolidated statements of income as a result of the prior hedged transactions being deemed probable of not occurring. For SJG interest rate derivatives, the fair value represents the amount SJG would have to pay the counterparty to terminate these contracts as of those dates. SJG previously used derivative transactions known as “Treasury Locks” to hedge against the impact on its cash flows of possible interest rate increases on debt issued in September 2005. The initial $1.4 million cost of the Treasury Locks has been included in AOCL and is being amortized over the 30 -year life of the associated debt issue. As of June 30, 2017 and December 31, 2016 , the unamortized balance was approximately $0.8 million and $0.9 million , respectively. As of June 30, 2017 , SJI’s active interest rate swaps were as follows: Notional Amount Fixed Interest Rate Start Date Maturity Obligor $ 20,000,000 3.049% 3/15/2017 3/15/2027 SJI $ 20,000,000 3.049% 3/15/2017 3/15/2027 SJI $ 10,000,000 3.049% 3/15/2017 3/15/2027 SJI $ 12,500,000 3.530% 12/1/2006 2/1/2036 SJG $ 12,500,000 3.430% 12/1/2006 2/1/2036 SJG The unrealized gains and losses on interest rate derivatives that are not designated as cash flow hedges are included in Interest Charges in the condensed consolidated statements of income. However, for selected interest rate derivatives at SJG, management believes that, subject to BPU approval, the market value upon termination can be recovered in rates and, therefore, these unrealized losses have been included in Other Regulatory Assets in the condensed balance sheets. The fair values of all derivative instruments, as reflected in the condensed consolidated balance sheets as of June 30, 2017 and December 31, 2016 , are as follows (in thousands): SJI (includes SJG and all other consolidated subsidiaries): Derivatives not designated as hedging instruments under GAAP June 30, 2017 December 31, 2016 Assets Liabilities Assets Liabilities Energy-related commodity contracts: Derivatives - Energy Related - Current $ 46,361 $ 23,082 $ 72,391 $ 60,082 Derivatives - Energy Related - Non-Current 7,248 4,660 8,502 4,540 Interest rate contracts: Derivatives - Other - Current — 787 — 681 Derivatives - Other - Noncurrent — 10,559 — 9,349 Total derivatives not designated as hedging instruments under GAAP $ 53,609 $ 39,088 $ 80,893 $ 74,652 Total Derivatives $ 53,609 $ 39,088 $ 80,893 $ 74,652 SJG: Derivatives not designated as hedging instruments under GAAP June 30, 2017 December 31, 2016 Assets Liabilities Assets Liabilities Energy-related commodity contracts: Derivatives – Energy Related – Current $ 7,998 $ 1,881 $ 5,434 $ 1,372 Derivatives – Energy Related – Non-Current — 297 373 — Interest rate contracts: Derivatives – Other Current — 382 — 386 Derivatives – Other Noncurrent — 6,915 — 6,979 Total derivatives not designated as hedging instruments under GAAP $ 7,998 $ 9,475 $ 5,807 $ 8,737 Total Derivatives $ 7,998 $ 9,475 $ 5,807 $ 8,737 SJI and SJG enter into derivative contracts with counterparties, some of which are subject to master netting arrangements, which allow net settlements under certain conditions. These derivatives are presented at gross fair values on the condensed consolidated balance sheets. As of June 30, 2017 and December 31, 2016 , information related to these offsetting arrangements were as follows (in thousands): As of June 30, 2017 Description Gross amounts of recognized assets/liabilities Gross amount offset in the balance sheet Net amounts of assets/liabilities in balance sheet Gross amounts not offset in the balance sheet Net amount Financial Instruments Cash Collateral Posted SJI (includes SJG and all other consolidated subsidiaries): Derivatives - Energy Related Assets $ 53,609 $ — $ 53,609 $ (13,958 ) (A) $ (2,674 ) $ 36,977 Derivatives - Energy Related Liabilities $ (27,742 ) $ — $ (27,742 ) $ 13,958 (B) $ — $ (13,784 ) Derivatives - Other $ (11,346 ) $ — $ (11,346 ) $ — $ — $ (11,346 ) SJG: Derivatives - Energy Related Assets $ 7,998 $ — $ 7,998 $ (711 ) (A) $ (151 ) $ 7,136 Derivatives - Energy Related Liabilities $ (2,178 ) $ — $ (2,178 ) $ 711 (B) $ — $ (1,467 ) Derivatives - Other $ (7,297 ) $ — $ (7,297 ) $ — $ — $ (7,297 ) As of December 31, 2016 Description Gross amounts of recognized assets/liabilities Gross amount offset in the balance sheet Net amounts of assets/liabilities in balance sheet Gross amounts not offset in the balance sheet Net amount Financial Instruments Cash Collateral Posted SJI (includes SJG and all other consolidated subsidiaries): Derivatives - Energy Related Assets $ 80,893 $ — $ 80,893 $ (38,809 ) (A) $ (3,474 ) $ 38,610 Derivatives - Energy Related Liabilities $ (64,622 ) $ — $ (64,622 ) $ 38,809 (B) $ — $ (25,813 ) Derivatives - Other $ (10,030 ) $ — $ (10,030 ) $ — $ — $ (10,030 ) SJG: Derivatives - Energy Related Assets $ 5,807 $ — $ 5,807 $ (6 ) (A) $ (3,587 ) $ 2,214 Derivatives - Energy Related Liabilities $ (1,372 ) $ — $ (1,372 ) $ 6 (B) $ — $ (1,366 ) Derivatives - Other $ (7,365 ) $ — $ (7,365 ) $ — $ — $ (7,365 ) (A) The balances at June 30, 2017 and December 31, 2016 were related to derivative liabilities which can be net settled against derivative assets. (B) The balances at June 30, 2017 and December 31, 2016 were related to derivative assets which can be net settled against derivative liabilities. The effect of derivative instruments on the condensed consolidated statements of income for the three and six months ended June 30, 2017 and 2016 are as follows (in thousands): Three Months Ended Six Months Ended Derivatives in Cash Flow Hedging Relationships under GAAP 2017 2016 2017 2016 SJI (includes SJG and all other consolidated subsidiaries): Interest Rate Contracts: Losses reclassified from AOCL into income (a) $ (12 ) $ (82 ) $ (2,499 ) $ (168 ) SJG: Interest Rate Contracts: Losses reclassified from AOCL into income (a) $ (12 ) $ (12 ) (24 ) (24 ) (a) Included in Interest Charges Three Months Ended Six Months Ended Derivatives Not Designated as Hedging Instruments under GAAP 2017 2016 2017 2016 SJI (includes SJG and all other consolidated subsidiaries): (Losses) gains on energy-related commodity contracts (a) $ (7,855 ) $ (21,371 ) $ 6,832 $ (2,716 ) Losses on interest rate contracts (b) (379 ) (229 ) (1,384 ) (656 ) Total $ (8,234 ) $ (21,600 ) $ 5,448 $ (3,372 ) (a) Included in Operating Revenues - Nonutility (b) Included in Interest Charges Certain of SJI’s derivative instruments contain provisions that require immediate payment or demand immediate and ongoing collateralization on derivative instruments in net liability positions in the event of a material adverse change in the credit standing of SJI. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a liability position on June 30, 2017 , is $4.4 million . If the credit-risk-related contingent features underlying these agreements were triggered on June 30, 2017 , SJI would have been required to settle the instruments immediately or post collateral to its counterparties of approximately $3.6 million after offsetting asset positions with the same counterparties under master netting arrangements. |
FAIR VALUE OF FINANCIAL ASSETS
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES | FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES: GAAP establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques. The levels of the hierarchy are described below: • Level 1: Observable inputs, such as quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. • Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. Assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and financial liabilities and their placement within the fair value hierarchy. For financial assets and financial liabilities measured at fair value on a recurring basis, information about the fair value measurements for each major category is as follows (in thousands): As of June 30, 2017 Total Level 1 Level 2 Level 3 SJI (includes SJG and all other consolidated subsidiaries): Assets Available-for-Sale Securities (A) $ 32 $ 32 $ — $ — Derivatives – Energy Related Assets (B) 53,609 6,499 18,985 28,125 $ 53,641 $ 6,531 $ 18,985 $ 28,125 SJG: Assets Derivatives – Energy Related Assets (B) $ 7,998 $ 711 $ 46 $ 7,241 $ 7,998 $ 711 $ 46 $ 7,241 SJI (includes SJG and all other consolidated subsidiaries): Liabilities Derivatives – Energy Related Liabilities (B) $ 27,742 $ 4,256 $ 12,762 $ 10,724 Derivatives – Other (C) 11,346 — 11,346 — $ 39,088 $ 4,256 $ 24,108 $ 10,724 SJG: Liabilities Derivatives – Energy Related Liabilities (B) $ 2,178 $ 862 $ 1,008 $ 308 Derivatives – Other (C) 7,297 — 7,297 — $ 9,475 $ 862 $ 8,305 $ 308 As of December 31, 2016 Total Level 1 Level 2 Level 3 SJI (includes SJG and all other consolidated subsidiaries): Assets Available-for-Sale Securities (A) $ 32 $ 32 $ — $ — Derivatives – Energy Related Assets (B) 80,893 33,994 11,814 35,085 $ 80,925 $ 34,026 $ 11,814 $ 35,085 SJG: Assets Derivatives – Energy Related Assets (B) $ 5,807 $ 4,767 $ — $ 1,040 $ 5,807 $ 4,767 $ — $ 1,040 SJI (includes SJG and all other consolidated subsidiaries): Liabilities Derivatives – Energy Related Liabilities (B) $ 64,622 $ 16,502 $ 22,070 $ 26,050 Derivatives – Other (C) 10,030 — 10,030 — $ 74,652 $ 16,502 $ 32,100 $ 26,050 SJG: Liabilities Derivatives – Energy Related Liabilities (B) $ 1,372 $ 6 $ 1,252 $ 114 Derivatives – Other (C) 7,365 — 7,365 — $ 8,737 $ 6 $ 8,617 $ 114 (A) Available-for-Sale Securities include securities that are traded in active markets and securities that are not traded publicly. The securities traded in active markets are valued using the quoted principal market close prices that are provided by the trustees and are categorized in Level 1 in the fair value hierarchy. (B) Derivatives – Energy Related Assets and Liabilities are traded in both exchange-based and non-exchange-based markets. Exchange-based contracts are valued using unadjusted quoted market sources in active markets and are categorized in Level 1 in the fair value hierarchy. Certain non-exchange-based contracts are valued using indicative price quotations available through brokers or over-the-counter, on-line exchanges and are categorized in Level 2. These price quotations reflect the average of the bid-ask mid-point prices and are obtained from sources that management believes provide the most liquid market. For non-exchange-based derivatives that trade in less liquid markets with limited pricing information, model inputs generally would include both observable and unobservable inputs. In instances where observable data is unavailable, management considers the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks such as liquidity, volatility and contract duration. Such instruments are categorized in Level 3 as the model inputs generally are not observable. Significant Unobservable Inputs - Management uses the discounted cash flow model to value Level 3 physical and financial forward contracts, which calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return and credit spreads. Inputs to the valuation model are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third party pricing sources. The validity of the mark-to-market valuations and changes in mark-to-market valuations from period to period are examined and qualified against historical expectations by the risk management function. If any discrepancies are identified during this process, the mark-to-market valuations or the market pricing information is evaluated further and adjusted, if necessary. Level 3 valuation methods for natural gas derivative contracts include utilizing another location in close proximity adjusted for certain pipeline charges to derive a basis value. The significant unobservable inputs used in the fair value measurement of certain natural gas contracts consist of forward prices developed based on industry-standard methodologies. Significant increases (decreases) in these forward prices for purchases of natural gas would result in a directionally similar impact to the fair value measurement and for sales of natural gas would result in a directionally opposite impact to the fair value measurement. Level 3 valuation methods for electric represent the value of the contract marked to the forward wholesale curve, as provided by daily exchange quotes for delivered electricity. The significant unobservable inputs used in the fair value measurement of electric contracts consist of fixed contracted electric load profiles; therefore, no change in unobservable inputs would occur. Unobservable inputs are updated daily using industry-standard techniques. Management reviews and corroborates the price quotations to ensure the prices are observable which includes consideration of actual transaction volumes, market delivery points, bid-ask spreads and contract duration. (C) Derivatives – Other are valued using quoted prices on commonly quoted intervals, which are interpolated for periods different than the quoted intervals, as inputs to a market valuation model. Market inputs can generally be verified and model selection does not involve significant management judgment. The following table provides quantitative information regarding significant unobservable inputs in Level 3 fair value measurements (in thousands): SJI (includes SJG and all other consolidated subsidiaries): Type Fair Value at June 30, 2017 Valuation Technique Significant Unobservable Input Range [Weighted Average] Assets Liabilities Forward Contract - Natural Gas $19,782 $6,180 Discounted Cash Flow Forward price (per dt) $1.68 - $8.94 [$2.62] (A) Forward Contract - Electric $8,343 $4,544 Discounted Cash Flow Fixed electric load profile (on-peak) 36.36% - 100.00% [53.18%] (B) Fixed electric load profile (off-peak) 0.00% - 63.64% [46.82%] (B) Type Fair Value at December 31, 2016 Valuation Technique Significant Unobservable Input Range [Weighted Average] Assets Liabilities Forward Contract - Natural Gas $23,301 $18,109 Discounted Cash Flow Forward price (per dt) $1.03 - $11.33 [$2.71] (A) Forward Contract - Electric $11,784 $7,941 Discounted Cash Flow Fixed electric load profile (on-peak) 21.43% - 100.00% [55.14%] (B) Fixed electric load profile (off-peak) 0.00% - 78.57% [44.86%] (B) SJG: Type Fair Value at June 30, 2017 Valuation Technique Significant Unobservable Input Range Assets Liabilities Forward Contract - Natural Gas $ 7,241 $ 308 Discounted Cash Flow $1.77 - $6.66 [$4.41] (A) Type Fair Value at December 31, 2016 Valuation Technique Significant Unobservable Input Range Assets Liabilities Forward Contract - Natural Gas $ 1,040 $ 114 Discounted Cash Flow Forward price (per dt) $3.25 - $6.33 [$5.09] (A) (A) Represents the range, along with the weighted average, of forward prices for the sale and purchase of natural gas. (B) Represents the range, along with the weighted average, of the percentage of contracted usage that is loaded during on-peak hours versus off-peak. The changes in fair value measurements of Derivatives – Energy Related Assets and Liabilities for the three and six months ended June 30, 2017 and 2016 , using significant unobservable inputs (Level 3), are as follows (in thousands): Three Months Ended Six Months Ended SJI (includes SJG and all other consolidated subsidiaries): Balance at beginning of period $ 16,234 $ 9,035 Other Changes in Fair Value from Continuing and New Contracts, Net 7,982 6,994 Transfers out of Level 3 (A) (748 ) (748 ) Settlements (6,067 ) 2,120 Balance at end of period $ 17,401 $ 17,401 SJG: Balance at beginning of period $ 511 $ 926 Other Changes in Fair Value from Continuing and New Contracts, Net 6,422 6,933 Settlements — (926 ) Balance at end of period $ 6,933 $ 6,933 Three Months Ended Six Months Ended SJI (includes SJG and all other consolidated subsidiaries): Balance at beginning of period $ 13,241 $ (632 ) Other Changes in Fair Value from Continuing and New Contracts, Net (12,073 ) (2,058 ) Settlements (3,264 ) 594 Balance at end of period $ (2,096 ) $ (2,096 ) SJG: Balance at beginning of period $ (4 ) $ 183 Other Changes in Fair Value from Continuing and New Contracts, Net (220 ) (224 ) Settlements — (183 ) Balance at end of period $ (224 ) $ (224 ) (A) Transfers between different levels of the fair value hierarchy may occur based on the level of observable inputs used to value the instruments from period to period. During the three and six months ended June 30, 2017 , $0.7 million of SJI's net derivative assets were transferred from Level 3 to Level 2, due to increased observability of market data. Total gains included in earnings for SJI for the three and six months ended June 30, 2017 that are attributable to the change in unrealized gains relating to those assets and liabilities included in Level 3 still held as of June 30, 2017 , are $8.0 million and $7.0 million , respectively. These gains are included in Operating Revenues-Nonutility on the condensed consolidated statements of income. |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2017 | |
Long-term Debt, Unclassified [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT: In January 2017, SJG issued $200.0 million aggregate principal amount of Medium Term Notes (MTN's), Series E, 2017, due January 2047, with principal payments beginning in 2025. The MTN's bear interest at an annual rate of 3.0% , payable semiannually. Proceeds were used to pay down SJG's $200.0 million multiple-draw term facility which was set to expire in June 2017. In January 2017, SJG entered into an unsecured, $200.0 million multiple-draw term loan credit agreement (Credit Agreement), which is syndicated among seven banks. Term loans under the Credit Agreement bear interest at a variable base rate or a variable LIBOR rate, at SJG's election. Under the Credit Agreement, SJG can borrow up to an aggregate of $200.0 million until July 2018, of which SJG borrowed $121.0 million during the six months ended June 30, 2017 . All loans under the Credit Agreement become due in January 2019. In May 2017, Marina voluntarily redeemed bonds issued by NJEDA in an aggregate principal amount of $61.4 million , as follows: Thermal Energy Facilities Revenue Bonds (Marina Energy LLC - 2001 Project) Series A ( $20.0 million ); Thermal Energy Facilities Federally Taxable Revenue Bonds (Marina Energy LLC - 2001 Project) Series B ( $25.0 million ); and Thermal Energy Facilities Revenue Bonds (Marina Energy LLC Project) Series 2006A ( $16.4 million ). In connection with the redemptions, separate related letter of credit reimbursement agreements were terminated (see Note 11). In June 2017, SJI redeemed at maturity $16.0 million of 2.71% Senior Unsecured Notes. SJI and SJG did not issue or retire any other long-term debt during the six months ended June 30, 2017 . |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS: The following table summarizes the changes in SJI's accumulated other comprehensive loss (AOCL) for the three and six months ended June 30, 2017 (in thousands): Postretirement Liability Adjustment Unrealized Gain (Loss) on Derivatives-Other Unrealized Gain (Loss) on Available-for-Sale Securities Other Comprehensive Income (Loss) of Affiliated Companies Total Balance at April 1, 2017 (a) $ (25,342 ) $ (417 ) $ (10 ) $ (97 ) $ (25,866 ) Other comprehensive income before reclassifications — — — — — Amounts reclassified from AOCL (b) — 7 — — 7 Net current period other comprehensive income — 7 — — 7 Balance at June 30, 2017 (a) $ (25,342 ) $ (410 ) $ (10 ) $ (97 ) $ (25,859 ) Postretirement Liability Adjustment Unrealized Gain (Loss) on Derivatives-Other Unrealized Gain (Loss) on Available-for-Sale Securities Other Comprehensive Income (Loss) of Affiliated Companies Total Balance at January 1, 2017 (a) $ (25,342 ) $ (1,932 ) $ (10 ) $ (97 ) $ (27,381 ) Other comprehensive income before reclassifications — — — — — Amounts reclassified from AOCL (b) — 1,522 — — 1,522 Net current period other comprehensive income — 1,522 — — 1,522 Balance at June 30, 2017 (a) $ (25,342 ) $ (410 ) $ (10 ) $ (97 ) $ (25,859 ) (a) Determined using a combined average statutory tax rate of 40% . (b) See table below. The following table provides details about reclassifications out of SJI's AOCL for the three and six months ended June 30, 2017 (in thousands): Components of AOCL Amounts Reclassified from AOCL Affected Line Item in the Condensed Consolidated Statements of Income Three Months Ended Six Months Ended Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges $ 12 $ 2,499 Interest Charges Income Taxes (5 ) (977 ) Income Taxes (a) Losses from reclassifications for the period net of tax $ 7 $ 1,522 (a) Determined using a combined average statutory tax rate of 40% . The following table summarizes the changes in SJG's AOCL for the three and six months ended June 30, 2017 (in thousands): Postretirement Liability Adjustment Unrealized Gain (Loss) on Derivatives-Other Total Balance at April 1, 2017 (a) $ (14,417 ) $ (510 ) $ (14,927 ) Other comprehensive loss before reclassifications — — — Amounts reclassified from AOCL (b) — 7 7 Net current period other comprehensive income — 7 7 Balance at June 30, 2017 (a) $ (14,417 ) $ (503 ) $ (14,920 ) Postretirement Liability Adjustment Unrealized Gain (Loss) on Derivatives-Other Total Balance at January 1, 2017 (a) $ (14,417 ) $ (517 ) $ (14,934 ) Other comprehensive loss before reclassifications — — — Amounts reclassified from AOCL (b) — 14 14 Net current period other comprehensive income (loss) — 14 14 Balance at June 30, 2017 (a) $ (14,417 ) $ (503 ) $ (14,920 ) (a) Determined using a combined average statutory tax rate of 40% . (b) See table below. The reclassifications out of SJG's AOCL during the three and six months ended June 30, 2017 are as follows (in thousands): Components of AOCL Amounts Reclassified from AOCL Affected Line Item in the Condensed Statements of Income Three Months Ended Six Months Ended Unrealized Loss in on Derivatives - Other - Interest Rate Contracts designated as cash flow hedges $ 12 $ 24 Interest Charges Income Taxes (5 ) (10 ) Income Taxes (a) Losses from reclassifications for the period net of tax $ 7 $ 14 (a) Determined using a combined average statutory tax rate of 40% . |
SUMMARY OF SIGNIFICANT ACCOUN22
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
GENERAL | GENERAL - South Jersey Industries, Inc. (SJI or the Company) currently provides a variety of energy-related products and services primarily through the following wholly-owned subsidiaries: ▪ South Jersey Gas Company (SJG) is a regulated natural gas utility. SJG distributes natural gas in the seven southernmost counties of New Jersey. ▪ South Jersey Energy Company (SJE) acquires and markets natural gas and electricity to retail end users and provides total energy management services to commercial, industrial and residential customers. ▪ South Jersey Resources Group, LLC (SJRG) markets natural gas storage, commodity and transportation assets along with fuel management services on a wholesale basis in the mid-Atlantic, Appalachian and southern states. ▪ South Jersey Exploration, LLC (SJEX) owns oil, gas and mineral rights in the Marcellus Shale region of Pennsylvania. ▪ Marina Energy, LLC (Marina) develops and operates on-site energy-related projects. The significant wholly-owned subsidiaries of Marina are: • ACB Energy Partners, LLC (ACB) owns and operates a natural gas fueled combined heating, cooling and power facility located in Atlantic City, New Jersey. • AC Landfill Energy, LLC (ACLE), BC Landfill Energy, LLC (BCLE), SC Landfill Energy, LLC (SCLE) and SX Landfill Energy, LLC (SXLE) own and operate landfill gas-fired electric production facilities in Atlantic, Burlington, Salem and Sussex Counties located in New Jersey. • MCS Energy Partners, LLC (MCS), NBS Energy Partners, LLC (NBS) and SBS Energy Partners, LLC (SBS) own and operate solar-generation sites located in New Jersey. ▪ South Jersey Energy Service Plus, LLC (SJESP) services residential and small commercial HVAC systems, installs small commercial HVAC systems, provides plumbing services and services appliances under warranty via a subcontractor arrangement as well as on a time and materials basis. In May 2017, SJESP entered into an agreement to sell certain assets of its residential and small commercial HVAC and plumbing business to a third party. This transaction, which is expected to be completed by August 31, 2017, is not expected to have a material impact on the consolidated financial statements. ▪ SJI Midstream, LLC (Midstream) invests in infrastructure and other midstream projects, including a current project to build an approximately 118 -mile natural gas pipeline in Pennsylvania and New Jersey. |
BASIS OF PRESENTATION | BASIS OF PRESENTATION - SJI's condensed consolidated financial statements include the accounts of SJI, its wholly-owned subsidiaries (including SJG) and subsidiaries in which SJI has a controlling interest. SJI eliminates all significant intercompany accounts and transactions. In management’s opinion, the unaudited condensed consolidated financial statements of SJI and SJG reflect all normal and recurring adjustments needed to fairly present their respective financial positions, operating results and cash flows at the dates and for the periods presented. SJI’s and SJG's businesses are subject to seasonal fluctuations and, accordingly, this interim financial information should not be the basis for estimating the full year’s operating results. As permitted by the rules and regulations of the Securities and Exchange Commission (SEC), the accompanying unaudited condensed consolidated financial statements of SJI and SJG contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). These financial statements should be read in conjunction with SJI’s and SJG's Annual Reports on Form 10-K for the year ended December 31, 2016 for a more complete discussion of the accounting policies and certain other information. |
RECLASSIFICATIONS | Certain reclassifications have been made to SJI's and SJG's prior period condensed consolidated statements of cash flows to conform to the current period presentation. Restricted cash is now combined with cash and cash equivalents when reconciling the beginning and end of period balances on the condensed consolidated statements of cash flows of SJI, as well as the condensed statements of cash flows for SJG, to conform to ASU 2016-18, which is described below under "New Accounting Pronouncements." This combination of restricted cash and cash and cash equivalents caused Cash Flows from Investing Activities for both SJI and SJG to be adjusted in order to remove items relating to capital expenditures and proceeds from restricted investments (SJI only), as well as the sale of restricted investments in a margin account (SJI and SJG). Certain reclassifications have been made to SJI's prior period condensed consolidated statements of cash flows to conform to the current period presentation. Cash paid by an employer when directly withholding shares for tax-withholding purposes is now classified as a financing activity in the condensed consolidated statements of cash flows to conform to ASU 2016-09, which is described below under "New Accounting Pronouncements." This caused SJI's prior period Cash Flows Provided by Operating Activities to increase by $0.4 million and Net Cash Flows from Financing Activities to decrease by the same amount. Adoption of this guidance did not effect SJG's condensed statements of cash flows. |
REVENUE-BASED TAXES | REVENUE-BASED TAXES - SJG collects certain revenue-based energy taxes from its customers. Such taxes include the New Jersey State Sales Tax and Public Utilities Assessment (PUA). State sales tax is recorded as a liability when billed to customers and is not included in revenue or operating expenses. |
IMPAIRMENT OF LONG-LIVED ASSETS | IMPAIRMENT OF LONG-LIVED ASSETS - SJI and SJG review the carrying amount of long-lived assets for possible impairment whenever events or changes in circumstances indicate that such amounts may not be recoverable. |
GAS EXPLORATION AND DEVELOPMENT | GAS EXPLORATION AND DEVELOPMENT - SJI capitalizes all costs associated with gas property acquisition, exploration and development activities under the full cost method of accounting. Capitalized costs include costs related to unproved properties, which are not amortized until proved reserves are found or it is determined that the unproved properties are impaired. All costs related to unproved properties are reviewed quarterly to determine if impairment has occurred. |
TREASURY STOCK | TREASURY STOCK - SJI uses the par value method of accounting for treasury stock. |
INCOME TAXES | INCOME TAXES - Deferred income taxes are provided for all significant temporary differences between the book and taxable bases of assets and liabilities in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740 - “Income Taxes.” A valuation allowance is established when it is determined that it is more likely than not that a deferred tax asset will not be realized. Investment tax credits related to renewable energy facilities of Marina are recognized on the flow-through method, which may result in variations in the customary relationship between income taxes and pre-tax income for interim periods. |
GOODWILL | GOODWILL - Goodwill represents the excess of the consideration paid over the fair value of identifiable net assets acquired. Goodwill is not amortized, but instead is subject to impairment testing on an annual basis, and between annual tests whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying amount. No such events have occurred during the three and six months ended June 30, 2017 . |
NEW ACCOUNTING PRONOUNCEMENTS | NEW ACCOUNTING PRONOUNCEMENTS - Other than as described below, no new accounting pronouncement issued or effective during 2017 or 2016 had, or are expected to have, a material impact on the condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU supersedes the revenue recognition requirements in FASB ASC 605, Revenue Recognition , and in most industry-specific topics. The new guidance identifies how and when entities should recognize revenue. The new rules establish a core principle requiring the recognition of revenue to depict the transfer of promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services. In connection with this new standard, the FASB has issued several amendments to ASU 2014-09, as follows: • In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) . This standard improves the implementation guidance on principal versus agent considerations and whether an entity reports revenue on a gross or net basis. • In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing . This standard clarifies identifying performance obligations and the licensing implementation guidance. • In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients . This standard provides additional guidance on (a) the objective of the collectibility criterion, (b) the presentation of sales tax collected from customers, (c) the measurement date of non-cash consideration received, (d) practical expedients in respect of contract modifications and completed contracts at transition, and (e) disclosure of the effects of the accounting change in the period of adoption. • In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers , which amends certain narrow aspects of the guidance, including the disclosure of remaining performance obligations and prior-period performance obligations, as well as other amendments to the guidance on loan guarantee fees, contract costs, refund liabilities, advertising costs and the clarification of certain examples. The new guidance in ASU 2014-09, as well as all amendments discussed above, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Management has formed an implementation team that is currently evaluating the impact that adoption of this guidance will have on the financial statements of SJI and SJG. We are in the process of assessing the impact of the guidance on our contracts in all our revenue streams by reviewing current accounting policies and practices to identify potential differences that would result from applying the new requirements to our revenue contracts. We expect that the majority of SJI and SJG revenue streams will be in scope of the new guidance, which includes SJG’s regulated revenue under tariffs, for which no change in current revenue recognition practices is expected. Revenues from contracts that SJI and SJG have with customers are currently recorded as gas or electricity is delivered to the customer, which is consistent with the new guidance under ASC 606. As a result, based on the review of customer contracts to date, SJI is not anticipating this guidance to have a material impact to SJI's or SJG's statements of consolidated income, cash flows or consolidated balance sheets upon adoption. The ASU does include expanded disclosure requirements, which we continue to analyze. We do not anticipate any significant changes to our business processes, systems or internal controls over financial reporting needed to support recognition and disclosure under the new guidance. We are continuing with our implementation plan and expect to transition to the new guidance beginning in 2018 using the modified retrospective approach. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , which enhances the reporting model for financial instruments and includes amendments to address aspects of recognition, measurement, presentation and disclosure. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted for only certain portions of the new guidance. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In March 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which establishes a new lease accounting model for lessees. The new standard requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The new standard also will result in enhanced quantitative and qualitative disclosures, including significant judgments made by management, to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing leases. The accounting for leases by the lessor remains relatively the same. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. Management has formed an implementation team that is inventorying leases and evaluating the impact that adoption of this guidance will have on SJI's and SJG's financial statements, as well as the transition method that will be elected to adopt the guidance. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , which simplifies various aspects of accounting for share-based payment arrangements. The standard was effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016, with early adoption permitted. Adoption of this guidance did not have a material impact on the financial statement results of SJI or SJG; however, cash flow presentation was modified for SJI to conform to this guidance, as described under “Basis of Presentation” above. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . This standard requires recognition of the current and deferred income tax effects of an intra-entity asset transfer, other than inventory, when the transfer occurs, as opposed to current GAAP, which requires companies to defer the income tax effects of intra-entity asset transfers until the asset has been sold to an outside party. The income tax effects of intra-entity inventory transfers will continue to be deferred until the inventory is sold. ASU 2016-16 is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods, with early adoption permitted. The standard is required to be adopted on a modified retrospective basis with a cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . This standard is intended to reduce diversity in practice in the classification and presentation of changes in restricted cash on the statement of cash flows. This ASU requires that the statement of cash flows explain the change in total cash and cash equivalents and amounts generally described as restricted cash or restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts. This ASU also requires a reconciliation between the total of cash and cash equivalents and restricted cash presented on the statement of cash flows and the cash and cash equivalents balance presented on the balance sheets. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. Both SJI and SJG early adopted this ASU in the first quarter of 2017. Accordingly, cash flow presentations were modified for both entities to conform to this guidance, as described under “Basis of Presentation” above. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . This new standard provides amended and clarifying guidance regarding whether an integrated set of assets and activities acquired is deemed the acquisition of a business (and, thus, accounted for as a business combination) or the acquisition of assets. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. The amendments in this update are effective for annual and any interim impairment tests performed in periods beginning after December 31, 2019. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This ASU is designed to improve guidance related to the presentation of defined benefit costs in the income statement. In particular, this ASU requires an employer to report the service cost component in the same line item(s) as other compensation costs arising from services rendered by the pertinent employees during the period. The standard is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting . This ASU clarifies and reduces both (i) diversity in practice and (ii) cost and complexity when applying the guidance in Topic 718, to a change to the terms and conditions of a share-based payment award. This standard is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, with early adoption permitted. The amendments in this ASU should be applied prospectively to an award modified on or after the adoption date. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. |
FAIR VALUE | GAAP establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques. The levels of the hierarchy are described below: • Level 1: Observable inputs, such as quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. • Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. Assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and financial liabilities and their placement within the fair value hierarchy. (A) Available-for-Sale Securities include securities that are traded in active markets and securities that are not traded publicly. The securities traded in active markets are valued using the quoted principal market close prices that are provided by the trustees and are categorized in Level 1 in the fair value hierarchy. (B) Derivatives – Energy Related Assets and Liabilities are traded in both exchange-based and non-exchange-based markets. Exchange-based contracts are valued using unadjusted quoted market sources in active markets and are categorized in Level 1 in the fair value hierarchy. Certain non-exchange-based contracts are valued using indicative price quotations available through brokers or over-the-counter, on-line exchanges and are categorized in Level 2. These price quotations reflect the average of the bid-ask mid-point prices and are obtained from sources that management believes provide the most liquid market. For non-exchange-based derivatives that trade in less liquid markets with limited pricing information, model inputs generally would include both observable and unobservable inputs. In instances where observable data is unavailable, management considers the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks such as liquidity, volatility and contract duration. Such instruments are categorized in Level 3 as the model inputs generally are not observable. Significant Unobservable Inputs - Management uses the discounted cash flow model to value Level 3 physical and financial forward contracts, which calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return and credit spreads. Inputs to the valuation model are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third party pricing sources. The validity of the mark-to-market valuations and changes in mark-to-market valuations from period to period are examined and qualified against historical expectations by the risk management function. If any discrepancies are identified during this process, the mark-to-market valuations or the market pricing information is evaluated further and adjusted, if necessary. Level 3 valuation methods for natural gas derivative contracts include utilizing another location in close proximity adjusted for certain pipeline charges to derive a basis value. The significant unobservable inputs used in the fair value measurement of certain natural gas contracts consist of forward prices developed based on industry-standard methodologies. Significant increases (decreases) in these forward prices for purchases of natural gas would result in a directionally similar impact to the fair value measurement and for sales of natural gas would result in a directionally opposite impact to the fair value measurement. Level 3 valuation methods for electric represent the value of the contract marked to the forward wholesale curve, as provided by daily exchange quotes for delivered electricity. The significant unobservable inputs used in the fair value measurement of electric contracts consist of fixed contracted electric load profiles; therefore, no change in unobservable inputs would occur. Unobservable inputs are updated daily using industry-standard techniques. Management reviews and corroborates the price quotations to ensure the prices are observable which includes consideration of actual transaction volumes, market delivery points, bid-ask spreads and contract duration. (C) Derivatives – Other are valued using quoted prices on commonly quoted intervals, which are interpolated for periods different than the quoted intervals, as inputs to a market valuation model. Market inputs can generally be verified and model selection does not involve significant management judgment. |
STOCK-BASED COMPENSATION PLAN (
STOCK-BASED COMPENSATION PLAN (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of the nonvested restricted stock awards outstanding and the assumptions used to estimate the fair value of the awards | The following table summarizes the nonvested restricted stock awards outstanding for SJI at June 30, 2017 and the assumptions used to estimate the fair value of the awards: Grants Shares Outstanding Fair Value Per Share Expected Volatility Risk-Free Interest Rate Officers & Key Employees - 2015 - TSR 33,537 $ 26.31 16.0 % 1.10 % 2015 - EGR, ROE, Time 61,586 $ 29.47 N/A N/A 2016 - TSR 66,101 $ 22.53 18.1 % 1.31 % 2016 - CEGR, Time 103,650 $ 23.52 N/A N/A 2017 - TSR 57,237 $ 32.17 20.8 % 1.47 % 2017 - CEGR, Time 110,207 $ 33.69 N/A N/A Directors - 2017 30,394 $ 33.64 N/A N/A |
Summary of the total stock-based compensation cost for the period | The following table summarizes the total stock-based compensation cost to SJI for the three and six months ended June 30, 2017 and 2016 (in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 Officers & Key Employees $ 1,117 $ 798 $ 2,187 $ 1,615 Directors 256 227 512 420 Total Cost 1,373 1,025 2,699 2,035 Capitalized (104 ) (106 ) (192 ) (212 ) Net Expense $ 1,269 $ 919 $ 2,507 $ 1,823 |
Summary of information regarding restricted stock award activity during the period excluding accrued dividend equivalents | The following table summarizes information regarding restricted stock award activity for SJI during the six months ended June 30, 2017 , excluding accrued dividend equivalents: Officers &Other Key Employees Directors Weighted Average Fair Value Nonvested Shares Outstanding, January 1, 2017 295,515 35,197 $ 24.96 Granted 167,444 30,394 $ 33.24 Vested (30,641 ) (35,197 ) $ 24.75 Nonvested Shares Outstanding, June 30, 2017 432,318 30,394 $ 28.53 |
AFFILIATIONS, DISCONTINUED OP24
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Summary of operating results of discontinued operations | Summarized operating results of the discontinued operations for the three and six months ended June 30, 2017 and 2016 , were (in thousands, except per share amounts): Three Months Ended Six Months Ended 2017 2016 2017 2016 Loss before Income Taxes: Sand Mining $ (15 ) $ (18 ) $ (32 ) $ (164 ) Fuel Oil (57 ) (27 ) (86 ) (62 ) Income Tax Benefits 25 16 41 79 Loss from Discontinued Operations — Net $ (47 ) $ (29 ) $ (77 ) $ (147 ) Earnings Per Common Share from Discontinued Operations — Net: Basic and Diluted $ — $ — $ — $ — |
Summary of related party transactions | A summary of related party transactions involving SJG, excluding pass-through items, included in SJG's Operating Revenues were as follows (in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 Operating Revenues/Affiliates: SJRG $ 1,248 $ 421 $ 2,211 $ 4,422 Marina 65 68 147 164 Other 21 21 42 42 Total Operating Revenue/Affiliates $ 1,334 $ 510 $ 2,400 $ 4,628 Related-party transactions involving SJG, excluding pass-through items, included in SJG's Cost of Sales and Operating Expenses were as follows (in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 Costs of Sales/Affiliates (Excluding depreciation) SJRG $ 496 $ 1,514 $ 10,946 $ 9,503 Operations Expense/Affiliates: SJI $ 4,988 $ 5,315 $ 11,038 $ 9,870 Millennium 712 701 1,420 1,395 Other (41 ) (49 ) (80 ) (106 ) Total Operations Expense/Affiliates $ 5,659 $ 5,967 $ 12,378 $ 11,159 |
COMMON STOCK (Tables)
COMMON STOCK (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of common stock shares issued and outstanding | The following shares were issued and outstanding for SJI: 2017 Beginning Balance, January 1 79,478,055 New Issuances During the Period: Stock-Based Compensation Plan 70,959 Ending Balance, June 30 79,549,014 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
Reconciliation of cash and cash equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows (in thousands): As of June 30, 2017 Balance Sheet Line Item SJI SJG Cash and Cash Equivalents $ 10,122 $ 1,096 Restricted Investments 1,842 1,542 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 11,964 $ 2,638 As of December 31, 2016 Balance Sheet Line Item SJI SJG Cash and Cash Equivalents $ 18,282 $ 1,359 Restricted Investments 13,628 32 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 31,910 $ 1,391 |
Reconciliation of restricted cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows (in thousands): As of June 30, 2017 Balance Sheet Line Item SJI SJG Cash and Cash Equivalents $ 10,122 $ 1,096 Restricted Investments 1,842 1,542 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 11,964 $ 2,638 As of December 31, 2016 Balance Sheet Line Item SJI SJG Cash and Cash Equivalents $ 18,282 $ 1,359 Restricted Investments 13,628 32 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 31,910 $ 1,391 |
SEGMENTS OF BUSINESS (Tables)
SEGMENTS OF BUSINESS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segments of Business | Information about SJI’s operations in different reportable operating segments is presented below (in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 Operating Revenues: Gas Utility Operations $ 83,251 $ 68,762 $ 280,065 $ 256,528 Energy Group: Wholesale Energy Operations 76,409 (1,309 ) 203,926 63,765 Retail Gas and Other Operations 21,759 22,305 58,637 52,038 Retail Electric Operations 42,620 43,065 91,577 82,556 Subtotal Energy Group 140,788 64,061 354,140 198,359 Energy Services: On-Site Energy Production 25,135 23,043 44,747 39,364 Appliance Service Operations 1,980 2,050 3,638 3,938 Subtotal Energy Services 27,115 25,093 48,385 43,302 Corporate and Services 11,013 8,417 22,609 17,293 Subtotal 262,167 166,333 705,199 515,482 Intersegment Sales (17,793 ) (11,931 ) (34,996 ) (28,045 ) Total Operating Revenues $ 244,374 $ 154,402 $ 670,203 $ 487,437 Three Months Ended Six Months Ended 2017 2016 2017 2016 Operating (Loss) Income: Gas Utility Operations $ 8,156 $ 9,931 $ 88,802 $ 85,704 Energy Group: Wholesale Energy Operations (18,191 ) (31,149 ) (29,817 ) 7,095 Retail Gas and Other Operations (1,560 ) 6,250 (3,227 ) 5,491 Retail Electric Operations 1,155 2,277 2,461 2,862 Subtotal Energy Group (18,596 ) (22,622 ) (30,583 ) 15,448 Energy Services: On-Site Energy Production 5,104 4,561 3,135 4,472 Appliance Service Operations 66 258 (6 ) 302 Subtotal Energy Services 5,170 4,819 3,129 4,774 Corporate and Services 706 (114 ) 1,774 341 Total Operating (Loss) Income $ (4,564 ) $ (7,986 ) $ 63,122 $ 106,267 Depreciation and Amortization: Gas Utility Operations $ 17,446 $ 15,788 $ 34,808 $ 31,414 Energy Group: Wholesale Energy Operations 33 204 61 408 Retail Gas and Other Operations 84 83 167 168 Subtotal Energy Group 117 287 228 576 Energy Services: On-Site Energy Production 11,674 10,895 23,267 20,814 Appliance Service Operations 56 91 110 175 Subtotal Energy Services 11,730 10,986 23,377 20,989 Corporate and Services 418 260 819 483 Total Depreciation and Amortization $ 29,711 $ 27,321 $ 59,232 $ 53,462 Interest Charges: Gas Utility Operations $ 6,077 $ 4,552 $ 11,955 $ 9,339 Energy Group: Wholesale Energy Operations 134 1 3,193 65 Retail Gas and Other Operations 64 78 149 210 Subtotal Energy Group 198 79 3,342 275 Energy Services: On-Site Energy Production 3,877 3,442 9,691 6,904 Corporate and Services 4,941 2,858 10,182 6,310 Subtotal 15,093 10,931 35,170 22,828 Intersegment Borrowings (4,114 ) (2,702 ) (7,446 ) (5,439 ) Total Interest Charges $ 10,979 $ 8,229 $ 27,724 $ 17,389 Three Months Ended Six Months Ended 2017 2016 2017 2016 Income Taxes: Gas Utility Operations $ 1,431 $ 1,415 $ 31,342 $ 28,819 Energy Group: Wholesale Energy Operations (6,384 ) (12,258 ) (12,703 ) 2,479 Retail Gas and Other Operations (593 ) 2,450 (1,040 ) 2,282 Retail Electric Operations 472 931 1,007 1,170 Subtotal Energy Group (6,505 ) (8,877 ) (12,736 ) 5,931 Energy Services: On-Site Energy Production 219 110 (2,850 ) (2,902 ) Appliance Service Operations 36 126 19 152 Subtotal Energy Services 255 236 (2,831 ) (2,750 ) Corporate and Services (725 ) 37 551 78 Total Income Taxes $ (5,544 ) $ (7,189 ) $ 16,326 $ 32,078 Property Additions: Gas Utility Operations $ 66,128 $ 50,133 $ 128,408 $ 101,503 Energy Group: Wholesale Energy Operations 4 1 7 7 Retail Gas and Other Operations 133 354 428 725 Subtotal Energy Group 137 355 435 732 Energy Services: On-Site Energy Production 2,917 2,665 10,266 5,316 Appliance Service Operations 254 251 260 352 Subtotal Energy Services 3,171 2,916 10,526 5,668 Corporate and Services 839 564 1,084 727 Total Property Additions $ 70,275 $ 53,968 $ 140,453 $ 108,630 June 30, 2017 December 31, 2016 Identifiable Assets: Gas Utility Operations $ 2,673,743 $ 2,551,923 Energy Group: Wholesale Energy Operations 165,932 233,019 Retail Gas and Other Operations 36,954 52,729 Retail Electric Operations 34,480 41,280 Subtotal Energy Group 237,366 327,028 Energy Services: On-Site Energy Production 719,556 767,710 Appliance Service Operations 2,571 2,879 Subtotal Energy Services 722,127 770,589 Discontinued Operations 1,778 1,756 Corporate and Services 708,131 649,795 Intersegment Assets (601,285 ) (570,524 ) Total Identifiable Assets $ 3,741,860 $ 3,730,567 |
REGULATORY ASSETS AND REGULAT28
REGULATORY ASSETS AND REGULATORY LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
Schedule of Regulatory Assets | SJI's and SJG's Regulatory Assets consisted of the following items (in thousands): June 30, 2017 December 31, 2016 Environmental Remediation Costs: Expended - Net $ 89,873 $ 71,997 Liability for Future Expenditures 161,681 153,047 Deferred Asset Retirement Obligation Costs 42,716 43,014 Deferred Pension and Other Postretirement Benefit Costs 85,693 85,693 Deferred Gas Costs - Net 3,598 — Conservation Incentive Program Receivable 31,933 27,567 Societal Benefit Costs Receivable 443 — Deferred Interest Rate Contracts 7,298 7,365 Energy Efficiency Tracker 511 219 Pipeline Supplier Service Charges 1,355 2,122 Pipeline Integrity Cost 5,061 4,810 AFUDC - Equity Related Deferrals 12,422 12,434 Other Regulatory Assets 2,728 2,478 Total Regulatory Assets $ 445,312 $ 410,746 |
Schedule of Regulatory Liabilities | SJI's and SJG's Regulatory Liabilities consisted of the following items (in thousands): June 30, 2017 December 31, 2016 Excess Plant Removal Costs $ 24,655 $ 28,226 Deferred Revenues - Net — 17,800 Societal Benefit Costs — 3,095 Total Regulatory Liabilities $ 24,655 $ 49,121 |
PENSION AND OTHER POSTRETIREM29
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Defined Benefit Plan [Abstract] | |
Schedule of defined benefit plans disclosures | For the three and six months ended June 30, 2017 and 2016 , net periodic benefit cost related to the employee and officer pension and other postretirement benefit plans for SJI consisted of the following components (in thousands): Pension Benefits Three Months Ended Six Months Ended 2017 2016 2017 2016 Service Cost $ 1,112 $ 1,106 $ 2,494 $ 2,421 Interest Cost 2,931 3,062 5,886 6,062 Expected Return on Plan Assets (3,529 ) (3,374 ) (7,053 ) (6,754 ) Amortizations: Prior Service Cost 33 53 66 106 Actuarial Loss 2,528 2,388 5,141 4,697 Net Periodic Benefit Cost 3,075 3,235 6,534 6,532 Capitalized Benefit Cost (1,129 ) (1,213 ) (2,400 ) (2,400 ) Deferred Benefit Cost (139 ) (161 ) (300 ) (322 ) Total Net Periodic Benefit Expense $ 1,807 $ 1,861 $ 3,834 $ 3,810 Other Postretirement Benefits Three Months Ended Six Months Ended 2017 2016 2017 2016 Service Cost $ 208 $ 195 $ 455 $ 425 Interest Cost 609 654 1,209 1,307 Expected Return on Plan Assets (853 ) (776 ) (1,705 ) (1,552 ) Amortizations: Prior Service Cost (86 ) (86 ) (172 ) (172 ) Actuarial Loss 307 261 619 555 Net Periodic Benefit Cost 185 248 406 563 Capitalized Benefit Cost (46 ) (45 ) (101 ) (146 ) Total Net Periodic Benefit Expense $ 139 $ 203 $ 305 $ 417 |
LINES OF CREDIT (Tables)
LINES OF CREDIT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Line of Credit Facility [Abstract] | |
Schedule of lines of credit | Credit facilities and available liquidity as of June 30, 2017 were as follows (in thousands): Company Total Facility Usage Available Liquidity Expiration Date SJI: Revolving Credit Facilities $ 450,000 $ 303,300 (A) $ 146,700 August 2017; February 2018 (C) Total SJI 450,000 303,300 146,700 SJG: Commercial Paper Program/Revolving Credit Facility 200,000 3,600 (B) 196,400 May 2018 Uncommitted Bank Line 10,000 — 10,000 August 2017 (C) Total SJG 210,000 3,600 206,400 Total $ 660,000 $ 306,900 $ 353,100 (A) Includes letters of credit outstanding in the amount of $9.8 million . (B) Includes letters of credit outstanding in the amount of $0.8 million . (C) SJI and SJG anticipate that the credit facilities expiring in August 2017 will be renewed for a multi-year period. |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Outstanding derivative contracts | As of June 30, 2017 , SJI had outstanding derivative contracts as follows (1 MMdts = one million decatherms; 1 MMmWh = one million megawatt hours): SJI Consolidated SJG Derivative contracts intended to limit exposure to market risk to: Expected future purchases of natural gas (in MMdts) 50.9 10.8 Expected future sales of natural gas (in MMdts) 46.7 0.1 Expected future purchases of electricity (in MMmWh) 2.7 — Expected future sales of electricity (in MMmWh) 2.3 — Basis and Index related net purchase (sales) contracts (in MMdts) 92.2 1.1 |
Schedule of notional amounts of outstanding derivative positions | As of June 30, 2017 , SJI’s active interest rate swaps were as follows: Notional Amount Fixed Interest Rate Start Date Maturity Obligor $ 20,000,000 3.049% 3/15/2017 3/15/2027 SJI $ 20,000,000 3.049% 3/15/2017 3/15/2027 SJI $ 10,000,000 3.049% 3/15/2017 3/15/2027 SJI $ 12,500,000 3.530% 12/1/2006 2/1/2036 SJG $ 12,500,000 3.430% 12/1/2006 2/1/2036 SJG |
Fair value of derivative instruments | The fair values of all derivative instruments, as reflected in the condensed consolidated balance sheets as of June 30, 2017 and December 31, 2016 , are as follows (in thousands): SJI (includes SJG and all other consolidated subsidiaries): Derivatives not designated as hedging instruments under GAAP June 30, 2017 December 31, 2016 Assets Liabilities Assets Liabilities Energy-related commodity contracts: Derivatives - Energy Related - Current $ 46,361 $ 23,082 $ 72,391 $ 60,082 Derivatives - Energy Related - Non-Current 7,248 4,660 8,502 4,540 Interest rate contracts: Derivatives - Other - Current — 787 — 681 Derivatives - Other - Noncurrent — 10,559 — 9,349 Total derivatives not designated as hedging instruments under GAAP $ 53,609 $ 39,088 $ 80,893 $ 74,652 Total Derivatives $ 53,609 $ 39,088 $ 80,893 $ 74,652 SJG: Derivatives not designated as hedging instruments under GAAP June 30, 2017 December 31, 2016 Assets Liabilities Assets Liabilities Energy-related commodity contracts: Derivatives – Energy Related – Current $ 7,998 $ 1,881 $ 5,434 $ 1,372 Derivatives – Energy Related – Non-Current — 297 373 — Interest rate contracts: Derivatives – Other Current — 382 — 386 Derivatives – Other Noncurrent — 6,915 — 6,979 Total derivatives not designated as hedging instruments under GAAP $ 7,998 $ 9,475 $ 5,807 $ 8,737 Total Derivatives $ 7,998 $ 9,475 $ 5,807 $ 8,737 |
Offsetting assets | As of June 30, 2017 and December 31, 2016 , information related to these offsetting arrangements were as follows (in thousands): As of June 30, 2017 Description Gross amounts of recognized assets/liabilities Gross amount offset in the balance sheet Net amounts of assets/liabilities in balance sheet Gross amounts not offset in the balance sheet Net amount Financial Instruments Cash Collateral Posted SJI (includes SJG and all other consolidated subsidiaries): Derivatives - Energy Related Assets $ 53,609 $ — $ 53,609 $ (13,958 ) (A) $ (2,674 ) $ 36,977 Derivatives - Energy Related Liabilities $ (27,742 ) $ — $ (27,742 ) $ 13,958 (B) $ — $ (13,784 ) Derivatives - Other $ (11,346 ) $ — $ (11,346 ) $ — $ — $ (11,346 ) SJG: Derivatives - Energy Related Assets $ 7,998 $ — $ 7,998 $ (711 ) (A) $ (151 ) $ 7,136 Derivatives - Energy Related Liabilities $ (2,178 ) $ — $ (2,178 ) $ 711 (B) $ — $ (1,467 ) Derivatives - Other $ (7,297 ) $ — $ (7,297 ) $ — $ — $ (7,297 ) As of December 31, 2016 Description Gross amounts of recognized assets/liabilities Gross amount offset in the balance sheet Net amounts of assets/liabilities in balance sheet Gross amounts not offset in the balance sheet Net amount Financial Instruments Cash Collateral Posted SJI (includes SJG and all other consolidated subsidiaries): Derivatives - Energy Related Assets $ 80,893 $ — $ 80,893 $ (38,809 ) (A) $ (3,474 ) $ 38,610 Derivatives - Energy Related Liabilities $ (64,622 ) $ — $ (64,622 ) $ 38,809 (B) $ — $ (25,813 ) Derivatives - Other $ (10,030 ) $ — $ (10,030 ) $ — $ — $ (10,030 ) SJG: Derivatives - Energy Related Assets $ 5,807 $ — $ 5,807 $ (6 ) (A) $ (3,587 ) $ 2,214 Derivatives - Energy Related Liabilities $ (1,372 ) $ — $ (1,372 ) $ 6 (B) $ — $ (1,366 ) Derivatives - Other $ (7,365 ) $ — $ (7,365 ) $ — $ — $ (7,365 ) (A) The balances at June 30, 2017 and December 31, 2016 were related to derivative liabilities which can be net settled against derivative assets. (B) The balances at June 30, 2017 and December 31, 2016 were related to derivative assets which can be net settled against derivative liabilities. |
Offsetting liabilities | As of June 30, 2017 and December 31, 2016 , information related to these offsetting arrangements were as follows (in thousands): As of June 30, 2017 Description Gross amounts of recognized assets/liabilities Gross amount offset in the balance sheet Net amounts of assets/liabilities in balance sheet Gross amounts not offset in the balance sheet Net amount Financial Instruments Cash Collateral Posted SJI (includes SJG and all other consolidated subsidiaries): Derivatives - Energy Related Assets $ 53,609 $ — $ 53,609 $ (13,958 ) (A) $ (2,674 ) $ 36,977 Derivatives - Energy Related Liabilities $ (27,742 ) $ — $ (27,742 ) $ 13,958 (B) $ — $ (13,784 ) Derivatives - Other $ (11,346 ) $ — $ (11,346 ) $ — $ — $ (11,346 ) SJG: Derivatives - Energy Related Assets $ 7,998 $ — $ 7,998 $ (711 ) (A) $ (151 ) $ 7,136 Derivatives - Energy Related Liabilities $ (2,178 ) $ — $ (2,178 ) $ 711 (B) $ — $ (1,467 ) Derivatives - Other $ (7,297 ) $ — $ (7,297 ) $ — $ — $ (7,297 ) As of December 31, 2016 Description Gross amounts of recognized assets/liabilities Gross amount offset in the balance sheet Net amounts of assets/liabilities in balance sheet Gross amounts not offset in the balance sheet Net amount Financial Instruments Cash Collateral Posted SJI (includes SJG and all other consolidated subsidiaries): Derivatives - Energy Related Assets $ 80,893 $ — $ 80,893 $ (38,809 ) (A) $ (3,474 ) $ 38,610 Derivatives - Energy Related Liabilities $ (64,622 ) $ — $ (64,622 ) $ 38,809 (B) $ — $ (25,813 ) Derivatives - Other $ (10,030 ) $ — $ (10,030 ) $ — $ — $ (10,030 ) SJG: Derivatives - Energy Related Assets $ 5,807 $ — $ 5,807 $ (6 ) (A) $ (3,587 ) $ 2,214 Derivatives - Energy Related Liabilities $ (1,372 ) $ — $ (1,372 ) $ 6 (B) $ — $ (1,366 ) Derivatives - Other $ (7,365 ) $ — $ (7,365 ) $ — $ — $ (7,365 ) (A) The balances at June 30, 2017 and December 31, 2016 were related to derivative liabilities which can be net settled against derivative assets. (B) The balances at June 30, 2017 and December 31, 2016 were related to derivative assets which can be net settled against derivative liabilities. |
Derivatives in cash flow hedging relationships | The effect of derivative instruments on the condensed consolidated statements of income for the three and six months ended June 30, 2017 and 2016 are as follows (in thousands): Three Months Ended Six Months Ended Derivatives in Cash Flow Hedging Relationships under GAAP 2017 2016 2017 2016 SJI (includes SJG and all other consolidated subsidiaries): Interest Rate Contracts: Losses reclassified from AOCL into income (a) $ (12 ) $ (82 ) $ (2,499 ) $ (168 ) SJG: Interest Rate Contracts: Losses reclassified from AOCL into income (a) $ (12 ) $ (12 ) (24 ) (24 ) (a) Included in Interest Charges Three Months Ended Six Months Ended Derivatives Not Designated as Hedging Instruments under GAAP 2017 2016 2017 2016 SJI (includes SJG and all other consolidated subsidiaries): (Losses) gains on energy-related commodity contracts (a) $ (7,855 ) $ (21,371 ) $ 6,832 $ (2,716 ) Losses on interest rate contracts (b) (379 ) (229 ) (1,384 ) (656 ) Total $ (8,234 ) $ (21,600 ) $ 5,448 $ (3,372 ) (a) Included in Operating Revenues - Nonutility (b) Included in Interest Charges |
FAIR VALUE OF FINANCIAL ASSET32
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair value of assets and liabilities | For financial assets and financial liabilities measured at fair value on a recurring basis, information about the fair value measurements for each major category is as follows (in thousands): As of June 30, 2017 Total Level 1 Level 2 Level 3 SJI (includes SJG and all other consolidated subsidiaries): Assets Available-for-Sale Securities (A) $ 32 $ 32 $ — $ — Derivatives – Energy Related Assets (B) 53,609 6,499 18,985 28,125 $ 53,641 $ 6,531 $ 18,985 $ 28,125 SJG: Assets Derivatives – Energy Related Assets (B) $ 7,998 $ 711 $ 46 $ 7,241 $ 7,998 $ 711 $ 46 $ 7,241 SJI (includes SJG and all other consolidated subsidiaries): Liabilities Derivatives – Energy Related Liabilities (B) $ 27,742 $ 4,256 $ 12,762 $ 10,724 Derivatives – Other (C) 11,346 — 11,346 — $ 39,088 $ 4,256 $ 24,108 $ 10,724 SJG: Liabilities Derivatives – Energy Related Liabilities (B) $ 2,178 $ 862 $ 1,008 $ 308 Derivatives – Other (C) 7,297 — 7,297 — $ 9,475 $ 862 $ 8,305 $ 308 As of December 31, 2016 Total Level 1 Level 2 Level 3 SJI (includes SJG and all other consolidated subsidiaries): Assets Available-for-Sale Securities (A) $ 32 $ 32 $ — $ — Derivatives – Energy Related Assets (B) 80,893 33,994 11,814 35,085 $ 80,925 $ 34,026 $ 11,814 $ 35,085 SJG: Assets Derivatives – Energy Related Assets (B) $ 5,807 $ 4,767 $ — $ 1,040 $ 5,807 $ 4,767 $ — $ 1,040 SJI (includes SJG and all other consolidated subsidiaries): Liabilities Derivatives – Energy Related Liabilities (B) $ 64,622 $ 16,502 $ 22,070 $ 26,050 Derivatives – Other (C) 10,030 — 10,030 — $ 74,652 $ 16,502 $ 32,100 $ 26,050 SJG: Liabilities Derivatives – Energy Related Liabilities (B) $ 1,372 $ 6 $ 1,252 $ 114 Derivatives – Other (C) 7,365 — 7,365 — $ 8,737 $ 6 $ 8,617 $ 114 (A) Available-for-Sale Securities include securities that are traded in active markets and securities that are not traded publicly. The securities traded in active markets are valued using the quoted principal market close prices that are provided by the trustees and are categorized in Level 1 in the fair value hierarchy. (B) Derivatives – Energy Related Assets and Liabilities are traded in both exchange-based and non-exchange-based markets. Exchange-based contracts are valued using unadjusted quoted market sources in active markets and are categorized in Level 1 in the fair value hierarchy. Certain non-exchange-based contracts are valued using indicative price quotations available through brokers or over-the-counter, on-line exchanges and are categorized in Level 2. These price quotations reflect the average of the bid-ask mid-point prices and are obtained from sources that management believes provide the most liquid market. For non-exchange-based derivatives that trade in less liquid markets with limited pricing information, model inputs generally would include both observable and unobservable inputs. In instances where observable data is unavailable, management considers the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks such as liquidity, volatility and contract duration. Such instruments are categorized in Level 3 as the model inputs generally are not observable. Significant Unobservable Inputs - Management uses the discounted cash flow model to value Level 3 physical and financial forward contracts, which calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return and credit spreads. Inputs to the valuation model are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third party pricing sources. The validity of the mark-to-market valuations and changes in mark-to-market valuations from period to period are examined and qualified against historical expectations by the risk management function. If any discrepancies are identified during this process, the mark-to-market valuations or the market pricing information is evaluated further and adjusted, if necessary. Level 3 valuation methods for natural gas derivative contracts include utilizing another location in close proximity adjusted for certain pipeline charges to derive a basis value. The significant unobservable inputs used in the fair value measurement of certain natural gas contracts consist of forward prices developed based on industry-standard methodologies. Significant increases (decreases) in these forward prices for purchases of natural gas would result in a directionally similar impact to the fair value measurement and for sales of natural gas would result in a directionally opposite impact to the fair value measurement. Level 3 valuation methods for electric represent the value of the contract marked to the forward wholesale curve, as provided by daily exchange quotes for delivered electricity. The significant unobservable inputs used in the fair value measurement of electric contracts consist of fixed contracted electric load profiles; therefore, no change in unobservable inputs would occur. Unobservable inputs are updated daily using industry-standard techniques. Management reviews and corroborates the price quotations to ensure the prices are observable which includes consideration of actual transaction volumes, market delivery points, bid-ask spreads and contract duration. (C) Derivatives – Other are valued using quoted prices on commonly quoted intervals, which are interpolated for periods different than the quoted intervals, as inputs to a market valuation model. Market inputs can generally be verified and model selection does not involve significant management judgment. |
Quantitative information regarding significant unobservable inputs, assets | The following table provides quantitative information regarding significant unobservable inputs in Level 3 fair value measurements (in thousands): SJI (includes SJG and all other consolidated subsidiaries): Type Fair Value at June 30, 2017 Valuation Technique Significant Unobservable Input Range [Weighted Average] Assets Liabilities Forward Contract - Natural Gas $19,782 $6,180 Discounted Cash Flow Forward price (per dt) $1.68 - $8.94 [$2.62] (A) Forward Contract - Electric $8,343 $4,544 Discounted Cash Flow Fixed electric load profile (on-peak) 36.36% - 100.00% [53.18%] (B) Fixed electric load profile (off-peak) 0.00% - 63.64% [46.82%] (B) Type Fair Value at December 31, 2016 Valuation Technique Significant Unobservable Input Range [Weighted Average] Assets Liabilities Forward Contract - Natural Gas $23,301 $18,109 Discounted Cash Flow Forward price (per dt) $1.03 - $11.33 [$2.71] (A) Forward Contract - Electric $11,784 $7,941 Discounted Cash Flow Fixed electric load profile (on-peak) 21.43% - 100.00% [55.14%] (B) Fixed electric load profile (off-peak) 0.00% - 78.57% [44.86%] (B) SJG: Type Fair Value at June 30, 2017 Valuation Technique Significant Unobservable Input Range Assets Liabilities Forward Contract - Natural Gas $ 7,241 $ 308 Discounted Cash Flow $1.77 - $6.66 [$4.41] (A) Type Fair Value at December 31, 2016 Valuation Technique Significant Unobservable Input Range Assets Liabilities Forward Contract - Natural Gas $ 1,040 $ 114 Discounted Cash Flow Forward price (per dt) $3.25 - $6.33 [$5.09] (A) (A) Represents the range, along with the weighted average, of forward prices for the sale and purchase of natural gas. (B) Represents the range, along with the weighted average, of the percentage of contracted usage that is loaded during on-peak hours versus off-peak. |
Quantitative information regarding significant unobservable inputs, liabilities | The following table provides quantitative information regarding significant unobservable inputs in Level 3 fair value measurements (in thousands): SJI (includes SJG and all other consolidated subsidiaries): Type Fair Value at June 30, 2017 Valuation Technique Significant Unobservable Input Range [Weighted Average] Assets Liabilities Forward Contract - Natural Gas $19,782 $6,180 Discounted Cash Flow Forward price (per dt) $1.68 - $8.94 [$2.62] (A) Forward Contract - Electric $8,343 $4,544 Discounted Cash Flow Fixed electric load profile (on-peak) 36.36% - 100.00% [53.18%] (B) Fixed electric load profile (off-peak) 0.00% - 63.64% [46.82%] (B) Type Fair Value at December 31, 2016 Valuation Technique Significant Unobservable Input Range [Weighted Average] Assets Liabilities Forward Contract - Natural Gas $23,301 $18,109 Discounted Cash Flow Forward price (per dt) $1.03 - $11.33 [$2.71] (A) Forward Contract - Electric $11,784 $7,941 Discounted Cash Flow Fixed electric load profile (on-peak) 21.43% - 100.00% [55.14%] (B) Fixed electric load profile (off-peak) 0.00% - 78.57% [44.86%] (B) SJG: Type Fair Value at June 30, 2017 Valuation Technique Significant Unobservable Input Range Assets Liabilities Forward Contract - Natural Gas $ 7,241 $ 308 Discounted Cash Flow $1.77 - $6.66 [$4.41] (A) Type Fair Value at December 31, 2016 Valuation Technique Significant Unobservable Input Range Assets Liabilities Forward Contract - Natural Gas $ 1,040 $ 114 Discounted Cash Flow Forward price (per dt) $3.25 - $6.33 [$5.09] (A) (A) Represents the range, along with the weighted average, of forward prices for the sale and purchase of natural gas. (B) Represents the range, along with the weighted average, of the percentage of contracted usage that is loaded during on-peak hours versus off-peak. |
Changes in fair value using significant unobservable inputs | The changes in fair value measurements of Derivatives – Energy Related Assets and Liabilities for the three and six months ended June 30, 2017 and 2016 , using significant unobservable inputs (Level 3), are as follows (in thousands): Three Months Ended Six Months Ended SJI (includes SJG and all other consolidated subsidiaries): Balance at beginning of period $ 16,234 $ 9,035 Other Changes in Fair Value from Continuing and New Contracts, Net 7,982 6,994 Transfers out of Level 3 (A) (748 ) (748 ) Settlements (6,067 ) 2,120 Balance at end of period $ 17,401 $ 17,401 SJG: Balance at beginning of period $ 511 $ 926 Other Changes in Fair Value from Continuing and New Contracts, Net 6,422 6,933 Settlements — (926 ) Balance at end of period $ 6,933 $ 6,933 Three Months Ended Six Months Ended SJI (includes SJG and all other consolidated subsidiaries): Balance at beginning of period $ 13,241 $ (632 ) Other Changes in Fair Value from Continuing and New Contracts, Net (12,073 ) (2,058 ) Settlements (3,264 ) 594 Balance at end of period $ (2,096 ) $ (2,096 ) SJG: Balance at beginning of period $ (4 ) $ 183 Other Changes in Fair Value from Continuing and New Contracts, Net (220 ) (224 ) Settlements — (183 ) Balance at end of period $ (224 ) $ (224 ) (A) Transfers between different levels of the fair value hierarchy may occur based on the level of observable inputs used to value the instruments from period to period. During the three and six months ended June 30, 2017 , $0.7 million of SJI's net derivative assets were transferred from Level 3 to Level 2, due to increased observability of market data. |
ACCUMULATED OTHER COMPREHENSI33
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of changes in accumulated other comprehensive loss (AOCL) | The following table summarizes the changes in SJG's AOCL for the three and six months ended June 30, 2017 (in thousands): Postretirement Liability Adjustment Unrealized Gain (Loss) on Derivatives-Other Total Balance at April 1, 2017 (a) $ (14,417 ) $ (510 ) $ (14,927 ) Other comprehensive loss before reclassifications — — — Amounts reclassified from AOCL (b) — 7 7 Net current period other comprehensive income — 7 7 Balance at June 30, 2017 (a) $ (14,417 ) $ (503 ) $ (14,920 ) Postretirement Liability Adjustment Unrealized Gain (Loss) on Derivatives-Other Total Balance at January 1, 2017 (a) $ (14,417 ) $ (517 ) $ (14,934 ) Other comprehensive loss before reclassifications — — — Amounts reclassified from AOCL (b) — 14 14 Net current period other comprehensive income (loss) — 14 14 Balance at June 30, 2017 (a) $ (14,417 ) $ (503 ) $ (14,920 ) (a) Determined using a combined average statutory tax rate of 40% . (b) See table below. The following table summarizes the changes in SJI's accumulated other comprehensive loss (AOCL) for the three and six months ended June 30, 2017 (in thousands): Postretirement Liability Adjustment Unrealized Gain (Loss) on Derivatives-Other Unrealized Gain (Loss) on Available-for-Sale Securities Other Comprehensive Income (Loss) of Affiliated Companies Total Balance at April 1, 2017 (a) $ (25,342 ) $ (417 ) $ (10 ) $ (97 ) $ (25,866 ) Other comprehensive income before reclassifications — — — — — Amounts reclassified from AOCL (b) — 7 — — 7 Net current period other comprehensive income — 7 — — 7 Balance at June 30, 2017 (a) $ (25,342 ) $ (410 ) $ (10 ) $ (97 ) $ (25,859 ) Postretirement Liability Adjustment Unrealized Gain (Loss) on Derivatives-Other Unrealized Gain (Loss) on Available-for-Sale Securities Other Comprehensive Income (Loss) of Affiliated Companies Total Balance at January 1, 2017 (a) $ (25,342 ) $ (1,932 ) $ (10 ) $ (97 ) $ (27,381 ) Other comprehensive income before reclassifications — — — — — Amounts reclassified from AOCL (b) — 1,522 — — 1,522 Net current period other comprehensive income — 1,522 — — 1,522 Balance at June 30, 2017 (a) $ (25,342 ) $ (410 ) $ (10 ) $ (97 ) $ (25,859 ) (a) Determined using a combined average statutory tax rate of 40% . (b) See table below. |
Reclassifications out of AOCL | The reclassifications out of SJG's AOCL during the three and six months ended June 30, 2017 are as follows (in thousands): Components of AOCL Amounts Reclassified from AOCL Affected Line Item in the Condensed Statements of Income Three Months Ended Six Months Ended Unrealized Loss in on Derivatives - Other - Interest Rate Contracts designated as cash flow hedges $ 12 $ 24 Interest Charges Income Taxes (5 ) (10 ) Income Taxes (a) Losses from reclassifications for the period net of tax $ 7 $ 14 (a) Determined using a combined average statutory tax rate of 40% . The following table provides details about reclassifications out of SJI's AOCL for the three and six months ended June 30, 2017 (in thousands): Components of AOCL Amounts Reclassified from AOCL Affected Line Item in the Condensed Consolidated Statements of Income Three Months Ended Six Months Ended Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges $ 12 $ 2,499 Interest Charges Income Taxes (5 ) (977 ) Income Taxes (a) Losses from reclassifications for the period net of tax $ 7 $ 1,522 (a) Determined using a combined average statutory tax rate of 40% . |
SUMMARY OF SIGNIFICANT ACCOUN34
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017USD ($)countymishares | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)countymishares | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($)shares | |
Accounting Policies [Abstract] | |||||
Number of counties in which SJG operates | county | 7 | 7 | |||
Length of pipeline (in miles) | mi | 118 | 118 | |||
Public utility assessment | $ 200,000 | $ 200,000 | $ 600,000 | $ 500,000 | |
Amount of costs related to interests in proved and unproved properties in Pennsylvania, net of amortization | $ 8,700,000 | $ 8,700,000 | $ 8,800,000 | ||
Shares of treasury stock held (in shares) | shares | 211,217 | 211,217 | 212,617 | ||
Goodwill | $ 4,838,000 | $ 4,838,000 | $ 4,838,000 | ||
Public Utilities, General Disclosures [Line Items] | |||||
Cash Flows Provided by Operating Activities | 123,658,000 | 158,099,000 | |||
Net Cash Flows from Financing Activities | 19,313,000 | (42,705,000) | |||
Impairment charge | 0 | 0 | 300,000 | 0 | |
Identified impairments | $ 0 | 0 | 0 | 0 | |
South Jersey Gas Company | |||||
Public Utilities, General Disclosures [Line Items] | |||||
Cash Flows Provided by Operating Activities | 75,514,000 | 97,394,000 | |||
Net Cash Flows from Financing Activities | 57,471,000 | 4,900,000 | |||
Impairment charge | $ 0 | $ 0 | 0 | ||
Accounting Standards Update 2016-09, Statutory Tax Withholding Component | |||||
Public Utilities, General Disclosures [Line Items] | |||||
Cash Flows Provided by Operating Activities | 400,000 | ||||
Net Cash Flows from Financing Activities | $ (400,000) |
STOCK-BASED COMPENSATION PLAN35
STOCK-BASED COMPENSATION PLAN (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2017 | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Number of options granted (in shares) | 0 | 0 | ||||
Number of options outstanding (in shares) | 0 | 0 | 0 | |||
Vesting period of shares | 3 years | |||||
Service period of shares | 3 years | |||||
Fair value per share (in dollars per share) | $ 28.53 | $ 24.96 | $ 28.53 | |||
Expected volatility, measurement period | 3 years | |||||
Total Cost | $ 1,373 | $ 1,025 | $ 2,699 | $ 2,035 | ||
Capitalized | (104) | (106) | (192) | (212) | ||
Net Expense | $ 1,269 | 919 | $ 2,507 | 1,823 | ||
Unrecognized compensation cost of awards granted under the plan | $ 7,900 | |||||
Weighted average period over which unrecognized compensation cost is to be recognized | 2 years | |||||
Additional disclosures [Abstract] | ||||||
Weighted average fair value nonvested shares-beginning balance (in dollars per share) | $ 24.96 | |||||
Weighted average fair value nonvested shares-granted during the period (in dollars per share) | 33.24 | |||||
Weighted average fair value nonvested shares-vested during the period (in dollars per share) | 24.75 | |||||
Weighted average fair value nonvested shares-ending balance (in dollars per share) | $ 28.53 | $ 28.53 | ||||
South Jersey Gas Company | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Costs capitalized | 50.00% | |||||
Officers and Key Employees | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Number of shares granted (in shares) | 167,444 | |||||
Shares outstanding (in shares) | 432,318 | 295,515 | 432,318 | |||
Total Cost | $ 1,117 | 798 | $ 2,187 | $ 1,615 | ||
Number of shares awarded | 65,628 | 13,247 | ||||
Fair value of shares issued | $ 2,200 | $ 300 | ||||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||||
Nonvested shares outstanding, beginning balance (in shares) | 295,515 | |||||
Granted (in shares) | 167,444 | |||||
Vested (in shares) | (30,641) | |||||
Nonvested shares outstanding, ending balance (in shares) | 432,318 | 432,318 | ||||
Officers and Key Employees | 2015 - TSR | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Shares outstanding (in shares) | 33,537 | 33,537 | 33,537 | |||
Fair value per share (in dollars per share) | $ 26.31 | $ 26.31 | $ 26.31 | |||
Expected volatility | 16.00% | |||||
Risk-free interest rate | 1.10% | |||||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||||
Nonvested shares outstanding, ending balance (in shares) | 33,537 | 33,537 | ||||
Additional disclosures [Abstract] | ||||||
Weighted average fair value nonvested shares-ending balance (in dollars per share) | $ 26.31 | $ 26.31 | ||||
Officers and Key Employees | 2015 - EGR, ROE, Time | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Shares outstanding (in shares) | 61,586 | 61,586 | 61,586 | |||
Fair value per share (in dollars per share) | $ 29.47 | $ 29.47 | $ 29.47 | |||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||||
Nonvested shares outstanding, ending balance (in shares) | 61,586 | 61,586 | ||||
Additional disclosures [Abstract] | ||||||
Weighted average fair value nonvested shares-ending balance (in dollars per share) | $ 29.47 | $ 29.47 | ||||
Officers and Key Employees | 2016 - TSR | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Shares outstanding (in shares) | 66,101 | 66,101 | 66,101 | |||
Fair value per share (in dollars per share) | $ 22.53 | $ 22.53 | $ 22.53 | |||
Expected volatility | 18.10% | |||||
Risk-free interest rate | 1.31% | |||||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||||
Nonvested shares outstanding, ending balance (in shares) | 66,101 | 66,101 | ||||
Additional disclosures [Abstract] | ||||||
Weighted average fair value nonvested shares-ending balance (in dollars per share) | $ 22.53 | $ 22.53 | ||||
Officers and Key Employees | 2016 - CEGR, Time | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Shares outstanding (in shares) | 103,650 | 103,650 | 103,650 | |||
Fair value per share (in dollars per share) | $ 23.52 | $ 23.52 | $ 23.52 | |||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||||
Nonvested shares outstanding, ending balance (in shares) | 103,650 | 103,650 | ||||
Additional disclosures [Abstract] | ||||||
Weighted average fair value nonvested shares-ending balance (in dollars per share) | $ 23.52 | $ 23.52 | ||||
Officers and Key Employees | 2017 - TSR | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Shares outstanding (in shares) | 57,237 | 57,237 | 57,237 | |||
Fair value per share (in dollars per share) | $ 32.17 | $ 32.17 | $ 32.17 | |||
Expected volatility | 20.80% | |||||
Risk-free interest rate | 1.47% | |||||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||||
Nonvested shares outstanding, ending balance (in shares) | 57,237 | 57,237 | ||||
Additional disclosures [Abstract] | ||||||
Weighted average fair value nonvested shares-ending balance (in dollars per share) | $ 32.17 | $ 32.17 | ||||
Officers and Key Employees | 2017 - CEGR, Time | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Shares outstanding (in shares) | 110,207 | 110,207 | 110,207 | |||
Fair value per share (in dollars per share) | $ 33.69 | $ 33.69 | $ 33.69 | |||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||||
Nonvested shares outstanding, ending balance (in shares) | 110,207 | 110,207 | ||||
Additional disclosures [Abstract] | ||||||
Weighted average fair value nonvested shares-ending balance (in dollars per share) | $ 33.69 | $ 33.69 | ||||
Director | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Number of shares granted (in shares) | 30,394 | 35,197 | ||||
Vesting period of shares | 12 months | |||||
Director shares vested | 100.00% | |||||
Shares outstanding (in shares) | 30,394 | 35,197 | 30,394 | |||
Total Cost | $ 256 | $ 227 | $ 512 | $ 420 | ||
Fair value of shares issued | $ 1,000 | $ 800 | ||||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||||
Nonvested shares outstanding, beginning balance (in shares) | 35,197 | |||||
Granted (in shares) | 30,394 | 35,197 | ||||
Vested (in shares) | (35,197) | |||||
Nonvested shares outstanding, ending balance (in shares) | 30,394 | 30,394 | ||||
Director | 2017 | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Shares outstanding (in shares) | 30,394 | 30,394 | 30,394 | |||
Fair value per share (in dollars per share) | $ 33.64 | $ 33.64 | $ 33.64 | |||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||||
Nonvested shares outstanding, ending balance (in shares) | 30,394 | 30,394 | ||||
Additional disclosures [Abstract] | ||||||
Weighted average fair value nonvested shares-ending balance (in dollars per share) | $ 33.64 | $ 33.64 | ||||
Stock Appreciation Rights | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Number of shares granted (in shares) | 0 | |||||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||||
Granted (in shares) | 0 | |||||
Restricted Stock | Year two | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Service period of shares | 2 years | |||||
Restricted Stock | Year three | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Service period of shares | 3 years | |||||
Restricted Stock | Officers and Key Employees | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Number of shares granted (in shares) | 167,444 | 193,184 | ||||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||||
Granted (in shares) | 167,444 | 193,184 | ||||
Restricted Stock | Officers and Key Employees | Minimum | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Percentage of actual amount of shares that ultimately vest of original share units granted | 0.00% | |||||
Restricted Stock | Officers and Key Employees | Maximum | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Percentage of actual amount of shares that ultimately vest of original share units granted | 200.00% | |||||
Restricted Stock | South Jersey Gas Company's officers and other key employees | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Number of shares granted (in shares) | 24,001 | 32,732 | ||||
Net Expense | $ 300 | $ 200 | ||||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||||
Granted (in shares) | 24,001 | 32,732 | ||||
Time-based Restricted Stock | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Return on equity award threshold | 7.00% | |||||
Time-based Restricted Stock | Officers and Key Employees | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Number of shares granted (in shares) | 52,971 | 57,955 | ||||
Vesting period of shares | 3 years | 3 years | ||||
Payout limit | 100.00% | |||||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||||
Granted (in shares) | 52,971 | 57,955 | ||||
Total Shareholder Return | ||||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||||
Vesting period of shares | 3 years |
AFFILIATIONS, DISCONTINUED OP36
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED PARTY TRANSACTIONS - Narrative (Details) $ in Millions | 6 Months Ended | |||
Jun. 30, 2017USD ($)mi | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2011 | |
Schedule of Equity Method Investments [Line Items] | ||||
Length of pipeline (in miles) | mi | 118 | |||
Investments in unconsolidated affiliates | $ 19.2 | $ 4.6 | ||
Notes receivable - affiliate | $ 15.5 | $ 15.7 | ||
Interest accrual on secured notes receivable | 7.50% | |||
Net asset - included in investment in affiliates and other noncurrent liabilities | $ 50 | |||
Combined equity contributions and the notes receivable - affiliate | $ 65.5 | |||
Energenic US LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interest | 50.00% | 50.00% | ||
Millennium Account Services, LLC (Millennium) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interest | 50.00% | |||
Potato Creek, LLC (Potato Creek) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interest | 30.00% | |||
PennEast Pipeline Company, LLC (PennEast) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interest | 20.00% | |||
Secured Debt | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Notes receivable - affiliate | $ 13.7 | |||
Unsecured Debt | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Notes receivable - affiliate | $ 1.8 |
AFFILIATIONS, DISCONTINUED OP37
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED PARTY TRANSACTIONS - Summarized Operating Results (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Loss Before Income Taxes: | ||||
Income Tax Benefits | $ 25 | $ 16 | $ 41 | $ 79 |
Loss from Discontinued Operations — Net | $ (47) | $ (29) | $ (77) | $ (147) |
Earnings (Loss) Per Common Share from Discontinued Operations - Net | ||||
Basic and Diluted (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
Sand Mining | ||||
Loss Before Income Taxes: | ||||
Loss Before Income Taxes | $ (15) | $ (18) | $ (32) | $ (164) |
Fuel Oil | ||||
Loss Before Income Taxes: | ||||
Loss Before Income Taxes | $ (57) | $ (27) | $ (86) | $ (62) |
AFFILIATIONS, DISCONTINUED OP38
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED PARTY TRANSACTIONS - Related Party Transactions (Details) - SJG - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Operating Revenues/Affiliates: | ||||
Total Operating Revenue/Affiliates | $ 1,334 | $ 510 | $ 2,400 | $ 4,628 |
Operations Expense/Affiliates: | ||||
Total Operations Expense/Affiliates | 5,659 | 5,967 | 12,378 | 11,159 |
SJRG | ||||
Operating Revenues/Affiliates: | ||||
Total Operating Revenue/Affiliates | 1,248 | 421 | 2,211 | 4,422 |
Costs of Sales/Affiliates (Excluding depreciation) | 496 | 1,514 | 10,946 | 9,503 |
Marina | ||||
Operating Revenues/Affiliates: | ||||
Total Operating Revenue/Affiliates | 65 | 68 | 147 | 164 |
SJI | ||||
Operations Expense/Affiliates: | ||||
Total Operations Expense/Affiliates | 4,988 | 5,315 | 11,038 | 9,870 |
Millennium | ||||
Operations Expense/Affiliates: | ||||
Total Operations Expense/Affiliates | 712 | 701 | 1,420 | 1,395 |
Other | ||||
Operating Revenues/Affiliates: | ||||
Total Operating Revenue/Affiliates | 21 | 21 | 42 | 42 |
Operations Expense/Affiliates: | ||||
Total Operations Expense/Affiliates | $ (41) | $ (49) | $ (80) | $ (106) |
COMMON STOCK - Summary of Share
COMMON STOCK - Summary of Shares Issued and Outstanding (Details) | 6 Months Ended |
Jun. 30, 2017shares | |
Common Stock [Roll Forward] | |
Beginning balance (in shares) | 79,478,055 |
New Issuances During the Period: | |
Stock-Based Compensation Plan (in shares) | 70,959 |
Ending balance (in shares) | 79,549,014 |
COMMON STOCK - Narrative (Detai
COMMON STOCK - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
May 31, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Par value of common stock (in dollars per share) | $ 1.25 | $ 1.25 | $ 1.25 | |||
Net excess over par value recorded in premium on common stock | $ 1,100 | |||||
Shares of common stock issued (in shares) | 8,050,000 | |||||
Shares of common stock outstanding (in shares) | 79,549,014 | 79,549,014 | 79,478,055 | |||
Incremental shares included in diluted EPS calculation (in shares) | 136,332 | 292,782 | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 150,852 | 297,061 | ||||
Proceeds from sale of common stock | $ 203,600 | $ 0 | $ 214,463 | |||
Dividend Reinvestment Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Proceeds from sale of common stock | $ 10,800 | |||||
South Jersey Gas Company | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Par value of common stock (in dollars per share) | $ 2.5 | $ 2.5 | ||||
Shares of common stock outstanding (in shares) | 2,339,139 | 2,339,139 |
FINANCIAL INSTRUMENTS (Details)
FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2017 | Dec. 31, 2015 | Dec. 31, 2011 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Restricted investments held In escrow | $ 300 | $ 1,900 | ||||
Margin accounts with selected counterparties to support risk management activities | 1,500 | 11,700 | ||||
Cash and Cash Equivalents | 10,122 | 18,282 | ||||
Restricted Investments | 1,842 | 13,628 | ||||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ 42,337 | 11,964 | $ 52,635 | 31,910 | ||
Notes Receivable - Affiliate | 13,275 | 13,275 | ||||
Other Current Liabilities | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Margin accounts with selected counterparties to support risk management activities | $ 2,800 | |||||
Energenic US LLC | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Equity interest | 50.00% | 50.00% | ||||
Contract term | 20 years | |||||
Share of settlement | 7,500 | |||||
Recovery of costs receivable | 7,000 | |||||
Notes Receivable - Affiliate | $ 13,700 | |||||
Energenic US LLC | Other Income | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Recovery of costs associated with settlement | 2,100 | |||||
Energenic US LLC | Equity in Earnings of Affiliated Companies | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Recovery of costs associated with settlement | $ 5,300 | |||||
South Jersey Gas Company | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Margin accounts with selected counterparties to support risk management activities | 1,500 | 3,600 | ||||
Cash and Cash Equivalents | 1,096 | 1,359 | ||||
Restricted Investments | 1,542 | 32 | ||||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ 1,581 | 2,638 | $ 7,544 | 1,391 | ||
South Jersey Gas Company | Financing Receivable | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Carrying amount of loans, net of unamortized discounts | 8,100 | 9,500 | ||||
Imputed interest of loans | $ 800 | $ 900 | ||||
South Jersey Gas Company | Financing Receivable | Minimum | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Initial term of note | 5 years | |||||
South Jersey Gas Company | Financing Receivable | Maximum | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Initial term of note | 10 years |
FINANCIAL INSTRUMENTS - Credit
FINANCIAL INSTRUMENTS - Credit Risk (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($)counterparty | |
Concentration Risk [Line Items] | |
Number of counterparties | counterparty | 2 |
Supplier Concentration Risk | Derivatives Energy Related Assets | |
Concentration Risk [Line Items] | |
Current and noncurrent derivatives | $ | $ 9.2 |
Percentage of current and noncurrent derivatives | 17.10% |
FINANCIAL INSTRUMENTS - Financi
FINANCIAL INSTRUMENTS - Financial Instruments Not Carried at Fair Value (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Estimated fair value of long-term debt, including current maturities | $ 1,106.7 | $ 1,080.8 |
Carrying amount of long-term debt, including current maturities | 1,082.6 | 1,039.9 |
Unamortized debt issuance costs | 8.5 | 7.6 |
South Jersey Gas Company | ||
Debt Instrument [Line Items] | ||
Estimated fair value of long-term debt, including current maturities | 777.1 | 673.1 |
Carrying amount of long-term debt, including current maturities | 758.4 | 639.1 |
Unamortized debt issuance costs | $ 7.6 | $ 6 |
SEGMENTS OF BUSINESS (Details)
SEGMENTS OF BUSINESS (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)category | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | $ 244,374 | $ 154,402 | $ 670,203 | $ 487,437 | |
Total Operating (Loss) Income | (4,564) | (7,986) | 63,122 | 106,267 | |
Total Depreciation and Amortization | 29,711 | 27,321 | 59,232 | 53,462 | |
Total Interest Charges | 10,979 | 8,229 | 27,724 | 17,389 | |
Total Income Taxes | (5,544) | (7,189) | 16,326 | 32,078 | |
Total Property Additions | 70,275 | 53,968 | 140,453 | 108,630 | |
Total Identifiable Assets | 3,741,860 | 3,741,860 | $ 3,730,567 | ||
Discontinued Operations | |||||
Segment Reporting Information [Line Items] | |||||
Total Identifiable Assets | 1,778 | $ 1,778 | 1,756 | ||
Energy Group and Energy Services | |||||
Segment Reporting Information [Line Items] | |||||
Number of operating categories | category | 2 | ||||
Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | 262,167 | 166,333 | $ 705,199 | 515,482 | |
Total Interest Charges | 15,093 | 10,931 | 35,170 | 22,828 | |
Operating Segments | Gas Utility Operations | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | 83,251 | 68,762 | 280,065 | 256,528 | |
Total Operating (Loss) Income | 8,156 | 9,931 | 88,802 | 85,704 | |
Total Depreciation and Amortization | 17,446 | 15,788 | 34,808 | 31,414 | |
Total Interest Charges | 6,077 | 4,552 | 11,955 | 9,339 | |
Total Income Taxes | 1,431 | 1,415 | 31,342 | 28,819 | |
Total Property Additions | 66,128 | 50,133 | 128,408 | 101,503 | |
Total Identifiable Assets | 2,673,743 | 2,673,743 | 2,551,923 | ||
Operating Segments | Energy Group | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | 140,788 | 64,061 | 354,140 | 198,359 | |
Total Operating (Loss) Income | (18,596) | (22,622) | (30,583) | 15,448 | |
Total Depreciation and Amortization | 117 | 287 | 228 | 576 | |
Total Interest Charges | 198 | 79 | 3,342 | 275 | |
Total Income Taxes | (6,505) | (8,877) | (12,736) | 5,931 | |
Total Property Additions | 137 | 355 | 435 | 732 | |
Total Identifiable Assets | 237,366 | 237,366 | 327,028 | ||
Operating Segments | Energy Group | Wholesale Energy Operations | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | 76,409 | (1,309) | 203,926 | 63,765 | |
Total Operating (Loss) Income | (18,191) | (31,149) | (29,817) | 7,095 | |
Total Depreciation and Amortization | 33 | 204 | 61 | 408 | |
Total Interest Charges | 134 | 1 | 3,193 | 65 | |
Total Income Taxes | (6,384) | (12,258) | (12,703) | 2,479 | |
Total Property Additions | 4 | 1 | 7 | 7 | |
Total Identifiable Assets | 165,932 | 165,932 | 233,019 | ||
Operating Segments | Energy Group | Retail Gas and Other Operations | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | 21,759 | 22,305 | 58,637 | 52,038 | |
Total Operating (Loss) Income | (1,560) | 6,250 | (3,227) | 5,491 | |
Total Depreciation and Amortization | 84 | 83 | 167 | 168 | |
Total Interest Charges | 64 | 78 | 149 | 210 | |
Total Income Taxes | (593) | 2,450 | (1,040) | 2,282 | |
Total Property Additions | 133 | 354 | 428 | 725 | |
Total Identifiable Assets | 36,954 | 36,954 | 52,729 | ||
Operating Segments | Energy Group | Retail Electric Operations | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | 42,620 | 43,065 | 91,577 | 82,556 | |
Total Operating (Loss) Income | 1,155 | 2,277 | 2,461 | 2,862 | |
Total Income Taxes | 472 | 931 | 1,007 | 1,170 | |
Total Identifiable Assets | 34,480 | 34,480 | 41,280 | ||
Operating Segments | Energy Services | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | 27,115 | 25,093 | 48,385 | 43,302 | |
Total Operating (Loss) Income | 5,170 | 4,819 | 3,129 | 4,774 | |
Total Depreciation and Amortization | 11,730 | 10,986 | 23,377 | 20,989 | |
Total Income Taxes | 255 | 236 | (2,831) | (2,750) | |
Total Property Additions | 3,171 | 2,916 | 10,526 | 5,668 | |
Total Identifiable Assets | 722,127 | 722,127 | 770,589 | ||
Operating Segments | Energy Services | On-Site Energy Production | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | 25,135 | 23,043 | 44,747 | 39,364 | |
Total Operating (Loss) Income | 5,104 | 4,561 | 3,135 | 4,472 | |
Total Depreciation and Amortization | 11,674 | 10,895 | 23,267 | 20,814 | |
Total Interest Charges | 3,877 | 3,442 | 9,691 | 6,904 | |
Total Income Taxes | 219 | 110 | (2,850) | (2,902) | |
Total Property Additions | 2,917 | 2,665 | 10,266 | 5,316 | |
Total Identifiable Assets | 719,556 | 719,556 | 767,710 | ||
Operating Segments | Energy Services | Appliance Service Operations | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | 1,980 | 2,050 | 3,638 | 3,938 | |
Total Operating (Loss) Income | 66 | 258 | (6) | 302 | |
Total Depreciation and Amortization | 56 | 91 | 110 | 175 | |
Total Income Taxes | 36 | 126 | 19 | 152 | |
Total Property Additions | 254 | 251 | 260 | 352 | |
Total Identifiable Assets | 2,571 | 2,571 | 2,879 | ||
Corporate and Services | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | 11,013 | 8,417 | 22,609 | 17,293 | |
Total Operating (Loss) Income | 706 | (114) | 1,774 | 341 | |
Total Depreciation and Amortization | 418 | 260 | 819 | 483 | |
Total Interest Charges | 4,941 | 2,858 | 10,182 | 6,310 | |
Total Income Taxes | (725) | 37 | 551 | 78 | |
Total Property Additions | 839 | 564 | 1,084 | 727 | |
Total Identifiable Assets | 708,131 | 708,131 | 649,795 | ||
Intersegment eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | (17,793) | (11,931) | (34,996) | (28,045) | |
Total Interest Charges | (4,114) | $ (2,702) | (7,446) | $ (5,439) | |
Total Identifiable Assets | $ (601,285) | $ (601,285) | $ (570,524) |
RATES AND REGULATORY ACTIONS (D
RATES AND REGULATORY ACTIONS (Details) $ in Millions | Jan. 31, 2017USD ($) |
Energy Efficiency Tracker | South Jersey Gas Company | |
Schedule of Capitalization [Line Items] | |
Budget for Energy Efficiency Program | $ 36.3 |
REGULATORY ASSETS AND REGULAT46
REGULATORY ASSETS AND REGULATORY LIABILITIES - Regulatory Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | $ 445,312 | $ 410,746 |
Environmental Remediation Costs: Expended - Net | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 89,873 | 71,997 |
Environmental Remediation Costs: Liability for Future Expenditures | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 161,681 | 153,047 |
Deferred Asset Retirement Obligation Costs | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 42,716 | 43,014 |
Deferred Pension and Other Postretirement Benefit Costs | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 85,693 | 85,693 |
Conservation Incentive Program Receivable | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 31,933 | 27,567 |
Societal Benefit Costs Receivable | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 443 | 0 |
Deferred Interest Rate Contracts | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 7,298 | 7,365 |
Energy Efficiency Tracker | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 511 | 219 |
Pipeline Supplier Service Charges | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 1,355 | 2,122 |
Pipeline Integrity Cost | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 5,061 | 4,810 |
AFUDC - Equity Related Deferrals | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 12,422 | 12,434 |
Other Regulatory Assets | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 2,728 | 2,478 |
South Jersey Gas Company | Deferred Gas Costs | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | $ 3,598 | $ 0 |
REGULATORY ASSETS AND REGULAT47
REGULATORY ASSETS AND REGULATORY LIABILITIES - Narrative and Regulatory Liabilities (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017USD ($)siteasset | Dec. 31, 2016USD ($) | |
Regulatory Assets and Liabilities Disclosure [Abstract] | ||
Number of sites under remediation | site | 2 | |
Regulatory Liabilities [Line Items] | ||
Regulatory Assets | $ 445,312 | $ 410,746 |
Total Regulatory Liabilities | 24,655 | 49,121 |
Excess Plant Removal Costs | ||
Regulatory Liabilities [Line Items] | ||
Total Regulatory Liabilities | 24,655 | 28,226 |
Deferred Revenues - Net | ||
Regulatory Liabilities [Line Items] | ||
Regulatory Assets | 3,600 | |
Total Regulatory Liabilities | 0 | 17,800 |
Societal Benefit Costs | ||
Regulatory Liabilities [Line Items] | ||
Total Regulatory Liabilities | $ 0 | $ 3,095 |
Environmental restoration costs | ||
Regulatory Assets [Line Items] | ||
Number of regulatory assets | asset | 2 | |
Number of sites for environmental cleanup | site | 12 | |
Original recovery period of expenditures | 7 years |
PENSION AND OTHER POSTRETIREM48
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Pension Benefits | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Service Cost | $ 1,112,000 | $ 1,106,000 | $ 2,494,000 | $ 2,421,000 | |
Interest Cost | 2,931,000 | 3,062,000 | 5,886,000 | 6,062,000 | |
Expected Return on Plan Assets | (3,529,000) | (3,374,000) | (7,053,000) | (6,754,000) | |
Amortizations: | |||||
Prior Service Cost | 33,000 | 53,000 | 66,000 | 106,000 | |
Actuarial Loss | 2,528,000 | 2,388,000 | 5,141,000 | 4,697,000 | |
Net Periodic Benefit Cost | 3,075,000 | 3,235,000 | 6,534,000 | 6,532,000 | |
Capitalized Benefit Cost | (1,129,000) | (1,213,000) | (2,400,000) | (2,400,000) | |
Deferred Benefit Cost | (139,000) | (161,000) | (300,000) | (322,000) | |
Total Net Periodic Benefit Expense | 1,807,000 | 1,861,000 | 3,834,000 | 3,810,000 | |
Contributions | $ 10,000,000 | 0 | |||
Estimated future contributions | 0 | 0 | |||
Pension Benefits | South Jersey Gas Company | |||||
Amortizations: | |||||
Net Periodic Benefit Cost | 2,300,000 | 2,300,000 | 4,800,000 | 4,800,000 | |
Contributions | $ 8,000,000 | ||||
Estimated future contributions | 0 | 0 | |||
Other Postretirement Benefits | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Service Cost | 208,000 | 195,000 | 455,000 | 425,000 | |
Interest Cost | 609,000 | 654,000 | 1,209,000 | 1,307,000 | |
Expected Return on Plan Assets | (853,000) | (776,000) | (1,705,000) | (1,552,000) | |
Amortizations: | |||||
Prior Service Cost | (86,000) | (86,000) | (172,000) | (172,000) | |
Actuarial Loss | 307,000 | 261,000 | 619,000 | 555,000 | |
Net Periodic Benefit Cost | 185,000 | 248,000 | 406,000 | 563,000 | |
Capitalized Benefit Cost | (46,000) | (45,000) | (101,000) | (146,000) | |
Total Net Periodic Benefit Expense | 139,000 | 203,000 | 305,000 | 417,000 | |
Defined benefit plan regulatory obligation to contribute to the plan during the period | 3,600,000 | 3,600,000 | |||
Other Postretirement Benefits | South Jersey Gas Company | |||||
Amortizations: | |||||
Net Periodic Benefit Cost | 100,000 | $ 100,000 | 200,000 | $ 300,000 | |
Supplemental executive retirement plan | |||||
Amortizations: | |||||
Estimated future contributions | $ 2,500,000 | $ 2,500,000 |
LINES OF CREDIT (Details)
LINES OF CREDIT (Details) | 6 Months Ended | |
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | |
Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Total Facility | $ 660,000,000 | |
Usage | 306,900,000 | |
Available Liquidity | $ 353,100,000 | |
Weighted average interest rate on borrowings | 2.21% | 1.43% |
Average borrowings outstanding | $ 272,400,000 | $ 325,500,000 |
Maximum amounts outstanding | $ 354,100,000 | $ 467,700,000 |
Financial covenant, ratio of indebtedness to consolidated total capitalization (not more than) | 0.65 | |
Line of Credit | SJI | ||
Line of Credit Facility [Line Items] | ||
Total Facility | $ 450,000,000 | |
Usage | 303,300,000 | |
Available Liquidity | 146,700,000 | |
Line of Credit | SJI | Revolving Credit Facilities | ||
Line of Credit Facility [Line Items] | ||
Total Facility | 450,000,000 | |
Usage | 303,300,000 | |
Available Liquidity | 146,700,000 | |
Letters of credit outstanding | 9,800,000 | |
Line of Credit | South Jersey Gas Company | ||
Line of Credit Facility [Line Items] | ||
Total Facility | 210,000,000 | |
Usage | 3,600,000 | |
Available Liquidity | $ 206,400,000 | |
Weighted average interest rate on borrowings | 1.36% | 0.67% |
Average borrowings outstanding | $ 20,200,000 | $ 73,700,000 |
Maximum amounts outstanding | 110,100,000 | $ 141,700,000 |
Line of Credit | South Jersey Gas Company | Revolving Credit Facilities | ||
Line of Credit Facility [Line Items] | ||
Total Facility | 200,000,000 | |
Usage | 3,600,000 | |
Available Liquidity | 196,400,000 | |
Letters of credit outstanding | 800,000 | |
Line of Credit | South Jersey Gas Company | Uncommitted Bank Line | ||
Line of Credit Facility [Line Items] | ||
Total Facility | 10,000,000 | |
Usage | 0 | |
Available Liquidity | 10,000,000 | |
Unsecured promissory notes | SJG Commercial Paper Program | ||
Line of Credit Facility [Line Items] | ||
Total Facility | $ 200,000,000 | |
Fixed maturities of notes, at maximum number of days | 270 days |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | May 08, 2017USD ($) | Jul. 31, 2017 | Jun. 30, 2017USD ($)siteuniondecatherm / daycontract | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)siteuniondecatherm / daycontract | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Commitment and Contingencies [Line Items] | |||||||
Percentage of personnel represented by collective bargaining agreements | 42.00% | 42.00% | |||||
Number of unions | union | 2 | 2 | |||||
Cost of Sales - Nonutility | $ 147,354,000 | $ 78,832,000 | $ 363,117,000 | $ 166,601,000 | |||
Interest Charges | 10,979,000 | 8,229,000 | 27,724,000 | 17,389,000 | |||
Approximate amount accrued related to all claims | $ 3,000,000 | $ 3,000,000 | $ 3,100,000 | ||||
Environmental restoration costs | |||||||
Commitment and Contingencies [Line Items] | |||||||
Number of sites for environmental cleanup | site | 12 | 12 | |||||
Pricing dispute, long-term gas supply contract | |||||||
Commitment and Contingencies [Line Items] | |||||||
Number of long-term gas supply contracts | contract | 2 | 2 | |||||
Line of Credit | |||||||
Commitment and Contingencies [Line Items] | |||||||
Letter of credit provided | $ 660,000,000 | $ 660,000,000 | |||||
Standby letters of credit | |||||||
Commitment and Contingencies [Line Items] | |||||||
Letter of credit provided | $ 9,800,000 | 9,800,000 | |||||
South Jersey Gas Company | |||||||
Commitment and Contingencies [Line Items] | |||||||
Cumulative obligation for demand charges and reservation fees per month | $ 5,100,000 | ||||||
Percentage of personnel represented by collective bargaining agreements | 59.00% | 59.00% | |||||
Interest Charges | $ 6,077,000 | $ 4,552,000 | $ 11,955,000 | $ 9,339,000 | |||
Approximate amount accrued related to all claims | 700,000 | 700,000 | $ 600,000 | ||||
South Jersey Gas Company | Pricing dispute, long-term gas supply contract | Judicial ruling | |||||||
Commitment and Contingencies [Line Items] | |||||||
Amount to be paid to supplier | $ 16,700,000 | ||||||
South Jersey Gas Company | Line of Credit | |||||||
Commitment and Contingencies [Line Items] | |||||||
Letter of credit provided | 210,000,000 | 210,000,000 | |||||
South Jersey Gas Company | Revolving Credit Facilities | Line of Credit | |||||||
Commitment and Contingencies [Line Items] | |||||||
Letter of credit provided | 200,000,000 | 200,000,000 | |||||
Letters of credit outstanding | 800,000 | 800,000 | |||||
South Jersey Gas Company | Letters of credit under separate facility | |||||||
Commitment and Contingencies [Line Items] | |||||||
Letter of credit provided | $ 25,200,000 | 25,200,000 | |||||
South Jersey Resources Group | |||||||
Commitment and Contingencies [Line Items] | |||||||
Cumulative obligation for demand charges and reservation fees per month | $ 500,000 | ||||||
Minimum purchase commitment (in dts/d) | decatherm / day | 635,000 | 635,000 | |||||
Maximum purchase commitment (in dts/d) | decatherm / day | 901,500 | 901,500 | |||||
Minimum length of contract | 3 years | ||||||
Maximum length of contract | 10 years | ||||||
South Jersey Resources Group | Pricing dispute, long-term gas supply contract | Judicial ruling | |||||||
Commitment and Contingencies [Line Items] | |||||||
Amount to be paid to supplier | $ 45,000,000 | ||||||
Cost of Sales - Nonutility | $ 400,000 | $ 41,000,000 | |||||
Interest Charges | 600,000 | 4,000,000 | |||||
South Jersey Resources Group | Dispute, long-term management contract | Pending litigation | |||||||
Commitment and Contingencies [Line Items] | |||||||
Amount to be paid to supplier | 9,500,000 | ||||||
Amount claimed to be owed | 13,300,000 | ||||||
Parental guarantee | |||||||
Commitment and Contingencies [Line Items] | |||||||
Parental guarantees | $ 6,100,000 | $ 6,100,000 | |||||
Guarantee expiration period | 2 years | ||||||
Subsequent event | South Jersey Resources Group | Dispute, long-term management contract | Pending litigation | |||||||
Commitment and Contingencies [Line Items] | |||||||
Term of capacity management contract | 3 years |
DERIVATIVE INSTRUMENTS - Outsta
DERIVATIVE INSTRUMENTS - Outstanding Contracts (Details) MWh in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Sep. 30, 2005USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2017USD ($)MWh | Jun. 30, 2017USD ($)MMcfe | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Derivative [Line Items] | ||||||||
Net realized gains (losses), derivative instruments, energy-related contracts | $ 1,300,000 | $ (2,800,000) | ||||||
Reclassified unrealized gain (loss) to interest income (expense) | (2,400,000) | |||||||
Interest Rate Swap, $20,000,000 Contract 1 | ||||||||
Derivative [Line Items] | ||||||||
Notional Amount | $ 20,000,000 | $ 20,000,000 | $ 20,000,000 | $ 20,000,000 | ||||
Fixed Interest Rate | 3.049% | 3.049% | 3.049% | 3.049% | ||||
Interest Rate Swap, $20,000,000 Contract 2 | ||||||||
Derivative [Line Items] | ||||||||
Notional Amount | $ 20,000,000 | $ 20,000,000 | $ 20,000,000 | $ 20,000,000 | ||||
Fixed Interest Rate | 3.049% | 3.049% | 3.049% | 3.049% | ||||
Interest Rate Swap, $10,000,000 | ||||||||
Derivative [Line Items] | ||||||||
Notional Amount | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | ||||
Fixed Interest Rate | 3.049% | 3.049% | 3.049% | 3.049% | ||||
Basis and Index related net purchase (sales) contracts | ||||||||
Derivative [Line Items] | ||||||||
Notional amount (natural gas in mmcfe and electricity in mwh) | MMcfe | 112,900,000 | |||||||
Derivatives not designated as hedging instruments under GAAP | ||||||||
Derivative [Line Items] | ||||||||
Gain (loss) on energy related derivative instruments not designated as hedging instruments | $ (7,855,000) | $ (21,371,000) | $ 6,832,000 | $ (2,716,000) | ||||
Expected future purchases | ||||||||
Derivative [Line Items] | ||||||||
Notional amount (natural gas in mmcfe and electricity in mwh) | 2.7 | 50,900,000 | ||||||
Expected future sales | ||||||||
Derivative [Line Items] | ||||||||
Notional amount (natural gas in mmcfe and electricity in mwh) | 2.3 | 46,700,000 | ||||||
SJG | ||||||||
Derivative [Line Items] | ||||||||
Unrealized gains (losses) | 5,800,000 | (4,400,000) | ||||||
Cost of Treasury Locks | $ 1,400,000 | |||||||
Amortized life of the associated debt issue | 30 years | |||||||
Unamortized balance | 800,000 | 800,000 | $ 800,000 | $ 800,000 | $ 900,000 | |||
SJG | Interest Rate Swap, $12,500,000 Contract 1 | ||||||||
Derivative [Line Items] | ||||||||
Notional Amount | $ 12,500,000 | $ 12,500,000 | $ 12,500,000 | $ 12,500,000 | ||||
Fixed Interest Rate | 3.53% | 3.53% | 3.53% | 3.53% | ||||
SJG | Interest Rate Swap, $12,500,000 Contract 2 | ||||||||
Derivative [Line Items] | ||||||||
Notional Amount | $ 12,500,000 | $ 12,500,000 | $ 12,500,000 | $ 12,500,000 | ||||
Fixed Interest Rate | 3.43% | 3.43% | 3.43% | 3.43% | ||||
SJG | Basis and Index related net purchase (sales) contracts | ||||||||
Derivative [Line Items] | ||||||||
Notional amount (natural gas in mmcfe and electricity in mwh) | MMcfe | 21,800,000 | |||||||
SJG | Expected future purchases | ||||||||
Derivative [Line Items] | ||||||||
Notional amount (natural gas in mmcfe and electricity in mwh) | 0 | 10,800,000 | ||||||
SJG | Expected future sales | ||||||||
Derivative [Line Items] | ||||||||
Notional amount (natural gas in mmcfe and electricity in mwh) | 0 | 100,000 |
DERIVATIVE INSTRUMENTS - Fair V
DERIVATIVE INSTRUMENTS - Fair Value of all Derivative Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Assets | $ 53,609 | $ 80,893 |
Liabilities | 39,088 | 74,652 |
South Jersey Gas Company | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 7,998 | 5,807 |
Liabilities | 9,475 | 8,737 |
Commodity Contract | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 53,609 | 80,893 |
Liabilities | 0 | 0 |
Commodity Contract | South Jersey Gas Company | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 7,998 | 5,807 |
Liabilities | 0 | 0 |
Derivatives not designated as hedging instruments under GAAP | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 53,609 | 80,893 |
Liabilities | 39,088 | 74,652 |
Derivatives not designated as hedging instruments under GAAP | South Jersey Gas Company | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 7,998 | 5,807 |
Liabilities | 9,475 | 8,737 |
Derivatives not designated as hedging instruments under GAAP | Commodity Contract | Derivatives - Energy Related - Current | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 46,361 | 72,391 |
Liabilities | 23,082 | 60,082 |
Derivatives not designated as hedging instruments under GAAP | Commodity Contract | Derivatives - Energy Related - Current | South Jersey Gas Company | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 7,998 | 5,434 |
Liabilities | 1,881 | 1,372 |
Derivatives not designated as hedging instruments under GAAP | Commodity Contract | Derivatives - Energy Related - Non-Current | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 7,248 | 8,502 |
Liabilities | 4,660 | 4,540 |
Derivatives not designated as hedging instruments under GAAP | Commodity Contract | Derivatives - Energy Related - Non-Current | South Jersey Gas Company | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 373 |
Liabilities | 297 | 0 |
Derivatives not designated as hedging instruments under GAAP | Interest rate contracts | Derivatives - Other - Current | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 787 | 681 |
Derivatives not designated as hedging instruments under GAAP | Interest rate contracts | Derivatives - Other - Current | South Jersey Gas Company | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 382 | 386 |
Derivatives not designated as hedging instruments under GAAP | Interest rate contracts | Derivatives - Other - Noncurrent | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 10,559 | 9,349 |
Derivatives not designated as hedging instruments under GAAP | Interest rate contracts | Derivatives - Other - Noncurrent | South Jersey Gas Company | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 0 |
Liabilities | $ 6,915 | $ 6,979 |
DERIVATIVE INSTRUMENTS - Offset
DERIVATIVE INSTRUMENTS - Offsetting Arrangements (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Offsetting Derivative Assets [Abstract] | ||
Gross amounts of recognized assets/liabilities | $ 53,609 | $ 80,893 |
Offsetting Derivative Liabilities [Abstract] | ||
Gross amount offset in the balance sheet | 39,088 | 74,652 |
SJG | ||
Offsetting Derivative Assets [Abstract] | ||
Gross amounts of recognized assets/liabilities | 7,998 | 5,807 |
Offsetting Derivative Liabilities [Abstract] | ||
Gross amount offset in the balance sheet | 9,475 | 8,737 |
Commodity Contract | ||
Offsetting Derivative Assets [Abstract] | ||
Gross amounts of recognized assets/liabilities | 53,609 | 80,893 |
Gross amount offset in the balance sheet | 0 | 0 |
Net amounts of assets/liabilities in balance sheet | 53,609 | 80,893 |
Gross amounts not offset in the balance sheet, Financial Instruments | (13,958) | (38,809) |
Gross amounts not offset in the balance sheet, Cash Collateral Posted | (2,674) | (3,474) |
Net amount | 36,977 | 38,610 |
Offsetting Derivative Liabilities [Abstract] | ||
Gross amounts of recognized assets/liabilities | (27,742) | (64,622) |
Gross amount offset in the balance sheet | 0 | 0 |
Net amounts of assets/liabilities in balance sheet | (27,742) | (64,622) |
Gross amounts not offset in the balance sheet, Financial Instruments | 13,958 | 38,809 |
Gross amounts not offset in the balance sheet, Cash Collateral Posted | 0 | 0 |
Net amount | (13,784) | (25,813) |
Commodity Contract | SJG | ||
Offsetting Derivative Assets [Abstract] | ||
Gross amounts of recognized assets/liabilities | 7,998 | 5,807 |
Gross amount offset in the balance sheet | 0 | 0 |
Net amounts of assets/liabilities in balance sheet | 7,998 | 5,807 |
Gross amounts not offset in the balance sheet, Financial Instruments | (711) | (6) |
Gross amounts not offset in the balance sheet, Cash Collateral Posted | (151) | (3,587) |
Net amount | 7,136 | 2,214 |
Offsetting Derivative Liabilities [Abstract] | ||
Gross amounts of recognized assets/liabilities | (2,178) | (1,372) |
Gross amount offset in the balance sheet | 0 | 0 |
Net amounts of assets/liabilities in balance sheet | (2,178) | (1,372) |
Gross amounts not offset in the balance sheet, Financial Instruments | 711 | 6 |
Gross amounts not offset in the balance sheet, Cash Collateral Posted | 0 | 0 |
Net amount | (1,467) | (1,366) |
Other | ||
Offsetting Derivative Liabilities [Abstract] | ||
Gross amounts of recognized assets/liabilities | (11,346) | (10,030) |
Gross amount offset in the balance sheet | 0 | 0 |
Net amounts of assets/liabilities in balance sheet | (11,346) | (10,030) |
Gross amounts not offset in the balance sheet, Financial Instruments | 0 | 0 |
Gross amounts not offset in the balance sheet, Cash Collateral Posted | 0 | 0 |
Net amount | (11,346) | (10,030) |
Other | SJG | ||
Offsetting Derivative Liabilities [Abstract] | ||
Gross amounts of recognized assets/liabilities | (7,297) | (7,365) |
Gross amount offset in the balance sheet | 0 | 0 |
Net amounts of assets/liabilities in balance sheet | (7,297) | (7,365) |
Gross amounts not offset in the balance sheet, Financial Instruments | 0 | 0 |
Gross amounts not offset in the balance sheet, Cash Collateral Posted | 0 | 0 |
Net amount | $ (7,297) | $ (7,365) |
DERIVATIVE INSTRUMENTS - Effect
DERIVATIVE INSTRUMENTS - Effect of Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Interest Rate Contracts: | ||||
Total | $ (8,234) | $ (21,600) | $ 5,448 | $ (3,372) |
Fair value of derivative instruments with credit-risk-related features | 4,400 | 4,400 | ||
Additional collateral, aggregate fair value | 3,600 | 3,600 | ||
Derivatives in Cash Flow Hedging Relationships under GAAP | ||||
Interest Rate Contracts: | ||||
Losses reclassified from AOCL into income | (12) | (82) | (2,499) | (168) |
Derivatives in Cash Flow Hedging Relationships under GAAP | SJG | ||||
Interest Rate Contracts: | ||||
Losses reclassified from AOCL into income | (12) | (12) | (24) | (24) |
Derivatives not designated as hedging instruments under GAAP | ||||
Interest Rate Contracts: | ||||
(Losses) gains on energy-related commodity contracts | (7,855) | (21,371) | 6,832 | (2,716) |
Losses on interest rate contracts | $ (379) | $ (229) | $ (1,384) | $ (656) |
FAIR VALUE OF FINANCIAL ASSET55
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES - Measured on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Available-for-Sale Securities | $ 32 | $ 32 |
Derivatives - Energy Related Assets | 53,609 | 80,893 |
Total Assets | 53,641 | 80,925 |
Liabilities | ||
Derivatives - Energy Related Liabilities | 27,742 | 64,622 |
Derivatives - Other | 11,346 | 10,030 |
Total Liabilities | 39,088 | 74,652 |
SJG | ||
Assets | ||
Derivatives - Energy Related Assets | 7,998 | 5,807 |
Total Assets | 7,998 | 5,807 |
Liabilities | ||
Derivatives - Energy Related Liabilities | 2,178 | 1,372 |
Derivatives - Other | 7,297 | 7,365 |
Total Liabilities | 9,475 | 8,737 |
Level 1 | ||
Assets | ||
Available-for-Sale Securities | 32 | 32 |
Derivatives - Energy Related Assets | 6,499 | 33,994 |
Total Assets | 6,531 | 34,026 |
Liabilities | ||
Derivatives - Energy Related Liabilities | 4,256 | 16,502 |
Derivatives - Other | 0 | 0 |
Total Liabilities | 4,256 | 16,502 |
Level 1 | SJG | ||
Assets | ||
Derivatives - Energy Related Assets | 711 | 4,767 |
Total Assets | 711 | 4,767 |
Liabilities | ||
Derivatives - Energy Related Liabilities | 862 | 6 |
Derivatives - Other | 0 | 0 |
Total Liabilities | 862 | 6 |
Level 2 | ||
Assets | ||
Available-for-Sale Securities | 0 | 0 |
Derivatives - Energy Related Assets | 18,985 | 11,814 |
Total Assets | 18,985 | 11,814 |
Liabilities | ||
Derivatives - Energy Related Liabilities | 12,762 | 22,070 |
Derivatives - Other | 11,346 | 10,030 |
Total Liabilities | 24,108 | 32,100 |
Level 2 | SJG | ||
Assets | ||
Derivatives - Energy Related Assets | 46 | 0 |
Total Assets | 46 | 0 |
Liabilities | ||
Derivatives - Energy Related Liabilities | 1,008 | 1,252 |
Derivatives - Other | 7,297 | 7,365 |
Total Liabilities | 8,305 | 8,617 |
Level 3 | ||
Assets | ||
Available-for-Sale Securities | 0 | 0 |
Derivatives - Energy Related Assets | 28,125 | 35,085 |
Total Assets | 28,125 | 35,085 |
Liabilities | ||
Derivatives - Energy Related Liabilities | 10,724 | 26,050 |
Derivatives - Other | 0 | 0 |
Total Liabilities | 10,724 | 26,050 |
Level 3 | SJG | ||
Assets | ||
Derivatives - Energy Related Assets | 7,241 | 1,040 |
Total Assets | 7,241 | 1,040 |
Liabilities | ||
Derivatives - Energy Related Liabilities | 308 | 114 |
Derivatives - Other | 0 | 0 |
Total Liabilities | $ 308 | $ 114 |
FAIR VALUE OF FINANCIAL ASSET56
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES - Quantitative Information Regarding Significant Unobservable Inputs (Details) - Forward Contracts - Fair Value, Inputs, Level 3 $ in Thousands | Jun. 30, 2017USD ($)$ / decatherm | Dec. 31, 2016USD ($)$ / decatherm |
Natural Gas | Minimum | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Forward price (in dollars per dt) | $ / decatherm | 1.68 | 1.03 |
Natural Gas | Minimum | South Jersey Gas Company | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Forward price (in dollars per dt) | $ / decatherm | 1.77 | 3.25 |
Natural Gas | Maximum | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Forward price (in dollars per dt) | $ / decatherm | 8.94 | 11.33 |
Natural Gas | Maximum | South Jersey Gas Company | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Forward price (in dollars per dt) | $ / decatherm | 6.66 | 6.33 |
Natural Gas | Weighted Average | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Forward price (in dollars per dt) | $ / decatherm | 2.62 | 2.71 |
Natural Gas | Weighted Average | South Jersey Gas Company | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Forward price (in dollars per dt) | $ / decatherm | 4.41 | 5.09 |
Electricity | Minimum | On-Peak | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Fixed electric load profile | 36.36% | 21.43% |
Electricity | Minimum | Off-Peak | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Fixed electric load profile | 0.00% | 0.00% |
Electricity | Maximum | On-Peak | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Fixed electric load profile | 100.00% | 100.00% |
Electricity | Maximum | Off-Peak | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Fixed electric load profile | 63.64% | 78.57% |
Electricity | Weighted Average | On-Peak | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Fixed electric load profile | 53.18% | 55.14% |
Electricity | Weighted Average | Off-Peak | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Fixed electric load profile | 46.82% | 44.86% |
Discounted Cash Flow | Natural Gas | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Assets | $ | $ 19,782 | $ 23,301 |
Liabilities | $ | 6,180 | 18,109 |
Discounted Cash Flow | Natural Gas | South Jersey Gas Company | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Assets | $ | 7,241 | 1,040 |
Liabilities | $ | 308 | 114 |
Discounted Cash Flow | Electricity | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Assets | $ | 8,343 | 11,784 |
Liabilities | $ | $ 4,544 | $ 7,941 |
FAIR VALUE OF FINANCIAL ASSET57
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES - Changes in Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Balance at beginning of period | $ 16,234 | $ 13,241 | $ 9,035 | $ (632) |
Other Changes in Fair Value from Continuing and New Contracts, Net | 7,982 | (12,073) | 6,994 | (2,058) |
Transfers out of Level 3 | (748) | (748) | ||
Settlements | (6,067) | (3,264) | 2,120 | 594 |
Balance at end of period | 17,401 | (2,096) | 17,401 | (2,096) |
SJG | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Balance at beginning of period | 511 | (4) | 926 | 183 |
Other Changes in Fair Value from Continuing and New Contracts, Net | 6,422 | (220) | 6,933 | (224) |
Settlements | 0 | 0 | (926) | (183) |
Balance at end of period | $ 6,933 | $ (224) | $ 6,933 | $ (224) |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) | 1 Months Ended | ||
May 31, 2017USD ($) | Jan. 31, 2017USD ($)bank | Jun. 30, 2017USD ($) | |
Debt Instrument [Line Items] | |||
Interest rate | 7.50% | ||
Unsecured promissory notes | Senior Notes | |||
Debt Instrument [Line Items] | |||
Principal amount issued | $ 16,000,000 | ||
Interest rate | 2.71% | ||
South Jersey Gas Company | Unsecured term loan | |||
Debt Instrument [Line Items] | |||
Outstanding debt | $ 121,000,000 | ||
South Jersey Gas Company | Credit Agreement | Unsecured term loan | |||
Debt Instrument [Line Items] | |||
Letter of credit provided | $ 200,000,000 | ||
Credit agreement syndicated among number of banks | bank | 7 | ||
South Jersey Gas Company | Medium-term notes | Series E, 2017, Due January 2047 | |||
Debt Instrument [Line Items] | |||
Principal amount issued | $ 200,000,000 | ||
Interest rate | 3.00% | ||
South Jersey Gas Company | Loans payable | Line of Credit | |||
Debt Instrument [Line Items] | |||
Pay down of multiple-draw term facility | $ 200,000,000 | ||
Marina | Unsecured promissory notes | NJEDA, Variable Rate Demand Bonds | |||
Debt Instrument [Line Items] | |||
Principal amount redeemed | $ 61,400,000 | ||
Marina | Unsecured promissory notes | NJEDA, Thermal Energy Facilities Revenue Bonds, 2001 Project | |||
Debt Instrument [Line Items] | |||
Principal amount redeemed | 20,000,000 | ||
Marina | Unsecured promissory notes | NJEDA, Thermal Energy Facilities Federally Taxable Revenue Bonds, 2001 Project | |||
Debt Instrument [Line Items] | |||
Principal amount redeemed | 25,000,000 | ||
Marina | Unsecured promissory notes | NJEDA, Thermal Energy Facilities Revenue Bonds, Series 2006A | |||
Debt Instrument [Line Items] | |||
Principal amount redeemed | $ 16,400,000 |
ACCUMULATED OTHER COMPREHENSI59
ACCUMULATED OTHER COMPREHENSIVE LOSS - Summary of Changes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Beginning balance | $ 1,289,240 | ||||
Other comprehensive income before reclassifications | $ 0 | 0 | |||
Amounts reclassified from AOCL | 7 | 1,522 | |||
Other Comprehensive Income - Net of Tax | [1] | 7 | $ 104 | 1,522 | $ 204 |
Ending balance | $ 1,279,249 | $ 1,279,249 | |||
Combined statutory tax rate | 40.00% | 40.00% | 40.00% | 40.00% | |
South Jersey Gas Company | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Beginning balance | $ 839,900 | ||||
Other comprehensive income before reclassifications | $ 0 | 0 | |||
Amounts reclassified from AOCL | 7 | 14 | |||
Other Comprehensive Income - Net of Tax | [2] | 7 | $ 10 | 14 | $ 21 |
Ending balance | $ 928,695 | $ 928,695 | |||
Combined statutory tax rate | 40.00% | 40.00% | 40.00% | 40.00% | |
Total | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Beginning balance | $ (25,866) | $ (27,381) | |||
Ending balance | (25,859) | (25,859) | |||
Postretirement Liability Adjustment | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Beginning balance | (25,342) | (25,342) | |||
Other comprehensive income before reclassifications | 0 | 0 | |||
Amounts reclassified from AOCL | 0 | 0 | |||
Other Comprehensive Income - Net of Tax | 0 | 0 | |||
Ending balance | (25,342) | (25,342) | |||
Unrealized Gain (Loss) on Derivatives-Other | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Beginning balance | (417) | (1,932) | |||
Other comprehensive income before reclassifications | 0 | 0 | |||
Amounts reclassified from AOCL | 7 | 1,522 | |||
Other Comprehensive Income - Net of Tax | 7 | 1,522 | |||
Ending balance | (410) | (410) | |||
Unrealized Gain (Loss) on Available-for-Sale Securities | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Beginning balance | (10) | (10) | |||
Other comprehensive income before reclassifications | 0 | 0 | |||
Amounts reclassified from AOCL | 0 | 0 | |||
Other Comprehensive Income - Net of Tax | 0 | 0 | |||
Ending balance | (10) | (10) | |||
Other Comprehensive Income (Loss) of Affiliated Companies | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Beginning balance | (97) | (97) | |||
Other comprehensive income before reclassifications | 0 | 0 | |||
Amounts reclassified from AOCL | 0 | 0 | |||
Other Comprehensive Income - Net of Tax | 0 | 0 | |||
Ending balance | (97) | (97) | |||
Total | South Jersey Gas Company | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Beginning balance | (14,927) | (14,934) | |||
Ending balance | (14,920) | (14,920) | |||
Postretirement Liability Adjustment | South Jersey Gas Company | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Beginning balance | (14,417) | (14,417) | |||
Other comprehensive income before reclassifications | 0 | 0 | |||
Amounts reclassified from AOCL | 0 | 0 | |||
Other Comprehensive Income - Net of Tax | 0 | 0 | |||
Ending balance | (14,417) | (14,417) | |||
Unrealized Gain (Loss) on Derivatives-Other | South Jersey Gas Company | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Beginning balance | (510) | (517) | |||
Other comprehensive income before reclassifications | 0 | 0 | |||
Amounts reclassified from AOCL | 7 | 14 | |||
Other Comprehensive Income - Net of Tax | 7 | 14 | |||
Ending balance | $ (503) | $ (503) | |||
[1] | Determined using a combined average statutory tax rate of 40%. | ||||
[2] | Determined using a combined average statutory tax rate of 40%. |
ACCUMULATED OTHER COMPREHENSI60
ACCUMULATED OTHER COMPREHENSIVE LOSS - Reclassifications out of AOCL (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income Taxes | $ (5,544) | $ (7,189) | $ 16,326 | $ 32,078 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | $ (7) | $ (1,522) | ||
Combined statutory tax rate | 40.00% | 40.00% | 40.00% | 40.00% |
South Jersey Gas Company | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income Taxes | $ 1,431 | $ 1,415 | $ 31,342 | $ 28,819 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | $ (7) | $ (14) | ||
Combined statutory tax rate | 40.00% | 40.00% | 40.00% | 40.00% |
Unrealized Loss in on Derivatives - Other - Interest Rate Contracts designated as cash flow hedges | South Jersey Gas Company | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | $ (7) | $ (14) | ||
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income Taxes | (5) | (977) | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (1,522) | |||
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Loss in on Derivatives - Other - Interest Rate Contracts designated as cash flow hedges | South Jersey Gas Company | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income Taxes | (5) | (10) | ||
Net Income (Loss) Attributable to Parent | 7 | 14 | ||
Interest Charges | Reclassification out of Accumulated Other Comprehensive Income | Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges | 12 | 2,499 | ||
Interest Charges | Reclassification out of Accumulated Other Comprehensive Income | Unrealized Loss in on Derivatives - Other - Interest Rate Contracts designated as cash flow hedges | South Jersey Gas Company | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges | $ 12 | $ 24 |