NJNG is subject to cost-based regulation, therefore, it is permitted to recover authorized operating expenses and earn a reasonable return on its utility capital investments based on the BPU's approval. The impact of the ratemaking process and decisions authorized by the BPU allows NJNG to capitalize or defer certain costs that are expected to be recovered from its customers as regulatory assets and to recognize certain obligations representing amounts that are probable future expenditures as regulatory liabilities in accordance with accounting guidance applicable to regulated operations.

NJNG's recovery of costs is facilitated through its base rates, BGSS and other regulatory tariff riders. NJNG is required to make filings to the BPU for review of its BGSS, CIP and other programs and related rates. Annual rate changes are typically requested to be effective at the beginning of the following fiscal year. The current base rates include a weighted average cost of capital of 7.08% and a return on common equity of 9.6%. All rate and program changes are subject to proper notification and BPU review and approval. In addition, NJNG is permitted to implement certain BGSS rate changes on a provisional basis with proper notification to the BPU.


(Thousands)	March 31, 2026		September 30, 2025
Regulatory assets-current
New Jersey Clean Energy Program	$	6,930	$	17,171
Conservation Incentive Program	—		22,697

Derivatives at fair value, net	23,731		7,544
Other current regulatory assets	1,293		1,486
Total current regulatory assets	$	31,954	$	48,898
Regulatory assets-noncurrent
Environmental remediation costs:
Expended, net of recoveries	$	61,245	$	74,961
Liability for future expenditures	166,110		166,990
Deferred income taxes	48,117		46,013

SAVEGREEN	120,133		141,562
Postemployment and other benefit costs	42,131		41,275

Cost of removal	129,571		132,895

Other noncurrent regulatory assets	47,474		63,612
Total noncurrent regulatory assets	$	614,781	$	667,308
Regulatory liability-current
Overrecovered natural gas costs	$	41,993	$	10,643
Conservation Incentive Program	27,859		—


Total current regulatory liabilities	$	69,852	$	10,643
Regulatory liabilities-noncurrent
Tax Act impact	$	167,800	$	170,309



Other noncurrent regulatory liabilities	1,190		868
Total noncurrent regulatory liabilities	$	168,990	$	171,177

The assets are comprised primarily of the tax benefit associated with the equity component of Allowance for Funds Used During Construction and the liability consists primarily of scheduling penalties. Recovery of regulatory assets is subject to FERC approval.

•On October 31, 2025, NJNG notified the BPU that it intended to self-implement an increase to its BGSS rate, effective December 1, 2025 through September 30, 2026, which will result in an increase of approximately $38.1M in revenues related to BGSS.

•On December 17, 2025, the BPU approved, on a provisional basis, NJNG's annual BGSS/CIP filing, which included an increase of approximately $6.1M related to its balancing charge and a decrease of approximately $26.2M to CIP rates, effective January 1, 2026.

•On December 17, 2025, the BPU approved NJNG's final IIP filing, which requested a rate increase for capital expenditures of approximately $33.1M through October 31, 2025, resulting in a revenue increase of approximately $3.3M, effective January 1, 2026. In conjunction with this filing, NJNG notified the BPU that it was withdrawing its July 2025 request to extend the program. Any recovery of future infrastructure investments will be requested through a NJNG base rate case.

•On March 18, 2026, the BPU approved NJNG's annual SBC filing of RAC expenditures through June 30, 2025, which included a decrease to the RAC annual recoveries of approximately $0.8M and a decrease to the NJCEP annual recoveries of approximately $5.2M, effective April 1, 2026.