What changed in this filing

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Item 1. Business

2024-11-26 compared with 2023-11-21 · 88 added, 155 removed, 74 unchanged (77% of the section changed)

BUSINESS (Continued)

The BPU, within the framework of the EDECA, fully opened NJNG’s residential markets to competition, including third-party suppliers, and restructured rates to segregate its BGSS and delivery (i.e., transportation) prices.

New Jersey’s natural gas utilities must provide BGSS in the absence of a third-party supplier.

On September 30, 2023, NJNG had 15,457 residential and 8,033 commercial and industrial customers utilizing the transportation service.

Clean Energy Ventures

CEV invests in, owns and operates clean energy projects, including commercial and residential solar installations located in six states including New Jersey, Rhode Island, New York, Connecticut, Michigan and Indiana.

As of September 30, 2023, CEV has approximately 468.8 MW of solar capacity in service, including a combination of residential and commercial net-metered and grid-connected solar systems.

As part of its solar investment portfolio, CEV operates a residential and small commercial solar program, The Sunlight Advantage®, that provides qualifying homeowners and small business owners with the opportunity to have a solar system installed at their home or place of business with no installation or maintenance expenses.

CEV owns, operates and maintains the system over the life of the lease in exchange for monthly lease payments.

The program is operated by CEV using qualified contracting partners in addition to strategic suppliers for material standardization and sourcing.

The residential solar lease and PPA market is highly competitive, with a large number of companies operating in New Jersey.

CEV competes on price, quality and brand reputation, leveraging its partner network and customer referrals.

CEV’s commercial solar projects are sourced through various channels and include both net-metered and grid-connected systems.

Net-metered projects involve the sale of energy to a host and grid-connected systems into the wholesale energy markets.

Project construction is competitively sourced through third parties.

New Jersey has the eighth largest solar market in the U.S., according to the Solar Energy Industries Association®, with a large number of firms competing in all facets of the market including development, financing and construction.

Our solar systems are registered and certified with the BPU’s Office of Clean Energy and qualified to produce RECs.

One REC is created for every MWh of electricity produced by a solar generator.

CEV sells SRECs generated to a variety of counterparties, including electric load-serving entities that serve electric customers in New Jersey and are required to comply with the solar carve-out of the Renewable Portfolio Standard, a regulation that requires the increased production of energy from renewable energy sources.

Solar projects are also currently eligible for federal ITCs in the year that they are placed into service.

In December 2019, the BPU established the TREC as the interim program successor to the SREC program.

TRECs provide a fixed compensation base multiplied by an assigned project factor in order to determine their value.

The project factor is determined by the type and location of the project, as defined.

All TRECs generated are required to be purchased monthly by a TREC program administrator as appointed by the BPU.

In July 2021, the BPU approved the first portion of the solar successor program for net-metered projects under 5 MWs.

The new program opened to new applications on August 28, 2021.

Incentives are structured as a 15-year fixed incentive ranging from $85 to $130/MWh depending on market segment, project siting and size.

The second phase of the successor program, the CSI Program, was established on December 7, 2022.

The CSI program was designed to encourage grid scale solar generation with a goal of incentivizing development of at least 300 MW of solar annually until 2026.

Solicitations take place annually, and all projects that meet pre-qualification requirements will compete on price only.

The next solicitation will open on November 27, 2023, and will close to bids on February 29, 2024.

CEV is subject to various risks including those associated with adverse federal and state legislation and regulatory policies, electric grid connection, supply chain and/or construction delays that can impact the timing or eligibility of tax incentives, technological changes and the future market of RECs.

Risk Factors for additional information regarding these risks.

Energy Services

ES consists of unregulated wholesale and retail natural gas operations and provides producer and asset management services to a diverse customer base across North America.

ES has acquired contractual rights to natural gas transportation and storage assets it utilizes to implement its strategic and opportunistic market strategies.

The rights to these assets were acquired in anticipation of delivering natural gas, performing asset management services for customers or identifying strategic opportunities that exist in or between the market areas that it serves.

These opportunities are driven by price differentials between market locations and/or time periods.

ES’s activities are conducted in the market areas in which it has strong expertise, including the U.S.

ES differentiates itself in the marketplace based on price, reliability and quality of service.

Its competitors include wholesale marketing and trading companies, utilities, natural gas producers and financial institutions.

ES’s portfolio of customers includes regulated natural gas distribution companies, industrial companies, electric generators, natural gas/liquids processors, retail aggregators, wholesale marketers and natural gas producers.

New Jersey Resources Corporation

BUSINESS (Continued)

While focusing on maintaining a low-risk operating and counterparty credit profile, ES’s activities specifically consist of the following elements:

• Providing natural gas portfolio management services to nonaffiliated and our affiliated natural gas utility, electric generation facilities and natural gas producers;

• Managing strategies for new and existing natural gas transportation and storage assets to capture value from changes in price due to location or timing differences as a means to generate Financial Margin;

• Managing transactional logistics to minimize the cost of natural gas delivery to customers while maintaining security of supply.

Transactions utilize the most optimal and advantageous natural gas supply transportation routing available within its contractual asset portfolio and various market areas;

• Managing economic hedging programs that are designed to mitigate the impact of changes in market prices on Financial Margin generated on its natural gas transportation and storage commitments.

In an effort to deliver more predictable earnings contributions, reduce earnings volatility and monetize the value of its natural gas transportation portfolio, ES entered into a series of AMAs in December 2020 with an investment grade public utility to release pipeline capacity associated with certain natural gas transportation contracts.

The AMAs include a series of initial and permanent releases, which commenced in November 2021.

NJR will receive a total of approximately $260M in cash from fiscal 2022 through fiscal 2024 and $34M per year from fiscal 2025 through fiscal 2031 under the agreements.

During fiscal 2023, ES did not purchase over 10% of its natural gas from any one supplier.

Transportation and Natural Gas Storage Transactions

ES focuses on creating value from the use of its physical assets, which are typically amassed through contractual rights to natural gas transportation and storage capacity.

These assets become more valuable when favorable price changes occur that impact the value between or within market areas and across time periods.

On a forward basis, ES may hedge these price differentials through the use of financial instruments.

In addition, ES may seek to optimize these assets on a daily basis, as market conditions warrant, by evaluating natural gas supply and transportation availability within its portfolio.

This enables ES to capture geographic pricing differences across various regions, as delivered natural gas prices may change favorably as a result of market conditions.

ES may, for example, initiate positions when intrinsic Financial Margin is present, and then enhance that Financial Margin as prices change across regions or time periods.

ES also engages in park and loan transactions with storage and pipeline operators, where ES will either borrow (receive a loan of) natural gas with an obligation to repay the storage or pipeline operator at a later date or “park” natural gas with an obligation to withdraw at a later date.

In these cases, ES evaluates the economics of the transaction to determine if it can capture pricing differentials in the marketplace and generate Financial Margin.

ES evaluates deal attributes such as fixed fees and calendar-spread value from deal inception until volumes are scheduled to be returned and/or repaid, as well as the time value of money.

If this evaluation demonstrates that Financial Margin exists, ES may enter into the transaction and hedge with natural gas futures contracts, thereby locking in Financial Margin.

ES maintains inventory balances to satisfy existing or anticipated sales of natural gas to its counterparties and/or to create additional value, as described above.

During fiscal 2023 and 2022, ES managed and sold 150.4 Bcf and 231.1 Bcf of natural gas, respectively.

In addition, as of September 30, 2023 and 2022, ES had 14.6 Bcf or $24.5M of natural gas in storage and 10.8 Bcf or $82.5M of natural gas in storage, respectively.

Weather/Seasonality

ES activities are typically seasonal in nature as a result of changes in the supply and demand for natural gas.

Demand for natural gas is generally higher during the winter months when there may also be supply constraints;

however, during periods of milder temperatures, demand can decrease.

In addition, demand for natural gas can also be high during periods of extreme heat in the summer months, resulting from the need for additional natural gas supply for natural gas-fired electric generation facilities.

Accordingly, ES can be subject to variations in earnings and working capital throughout the year as a result of changes in weather.

New Jersey Resources Corporation

BUSINESS (Continued)

ES’s activities are also subject to price volatility or supply/demand dynamics within its North American wholesale markets, including in the Northeastern, Appalachian, Mid-Continent and Southeast regions.

Changes in natural gas supply can affect capacity values and ES’s Financial Margin, which, as described below, is generated from the optimization of transportation and storage assets.

With its focus on risk management, ES continues to diversify its revenue stream by identifying new growth opportunities in producer and asset management services.

ES monitors changing market dynamics and strategically adjusts its portfolio of transportation and storage assets, which currently includes an average of approximately 21.8 Bcf of firm storage and 0.6 Bcf of firm transportation capacity.

Financial Margin

To economically hedge the commodity price risk associated with its existing and anticipated commitments for the purchase and sale of natural gas, ES enters into a variety of derivative instruments including, but not limited to, futures contracts, physical forward contracts, financial swaps and options.

These derivative instruments are accounted for at fair value with changes in fair value recognized in earnings as they occur.

ES views Financial Margin, a non-GAAP financial measure, as a key internal financial metric.

For additional information regarding Financial Margin, see Item 7.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations-Energy Services .

Risk Management

In conducting its business, ES mitigates risk by following formal risk management guidelines, including transaction limits, segregation of duties and formal contract and credit review approval processes.

ES continuously monitors and seeks to reduce the risk associated with its counterparty credit exposures.

Our Risk Management Committee oversees compliance with these established guidelines.

Storage and Transportation

S&T includes investments in FERC-regulated interstate natural gas storage and transportation assets and is comprised of the following subsidiaries:

• NJR Midstream Company owns and operates Leaf River, a 32.2M Dth salt dome natural gas facility, located in southeastern Mississippi, and the FERC-regulated Adelphia, which owns and operates an 84-mile pipeline in southeastern Pennsylvania.

NJR Midstream Company also holds a 20% equity method investment in PennEast, whose project was cancelled in September 2021 and subsequently is dissolving the partnership;

• NJR Steckman Ridge Storage Company holds our 50% equity method investment in Steckman Ridge.

Steckman Ridge is a Delaware limited partnership, jointly owned and controlled by our subsidiaries and subsidiaries of Enbridge Inc., which built, owns and operates a natural gas storage facility with up to 12 Bcf of working natural gas capacity in Bedford County, Pennsylvania.

The facility has direct access to the TETCO and Eastern Gas Transmission and Storage, Inc.

pipelines and has access to the Northeast and Mid-Atlantic markets.

OTHER BUSINESS OPERATIONS

Home Services and Other

HSO operations consist primarily of the following unregulated affiliates:

• NJR Home Services, Inc., which provides heating, ventilation and cooling service, sales and installation of appliances to approximately 101,500 service contract customers, as well as installation of solar equipment;

• NJR Plumbing Services, Inc., which provides plumbing repair and installation services;

• New Jersey Resources Corporation, a diversified energy services holding company;

• CR&R, which holds commercial real estate;

• NJR Service Corporation, which provides shared administrative and financial services to the Company and all of its subsidiaries and affiliates.

New Jersey Resources Corporation

BUSINESS (Continued)

We, along with our subsidiaries, are subject to legislation and regulation by federal, state and local authorities with respect to environmental matters.

We believe that we are, in all material respects, in compliance with all applicable environmental laws and regulations.

NJNG is responsible for the environmental remediation of identified former MGP sites, which contain contaminated residues from former gas manufacturing operations that ceased at these sites by the mid-1950s and, in some cases, had been discontinued many years earlier.

NJNG periodically, and at least annually, performs an environmental review of the former MGP sites, including a review of potential estimated liabilities related to the investigation and remedial action on these sites.

Based on this review, NJNG has estimated that the total future expenditures to remediate and monitor the former MGP sites for which it is responsible will range from approximately $137.3M to $201.5M.

NJNG’s estimate of these liabilities is based upon known and measurable facts, existing technology and enacted laws and regulations in place when the review was completed in fiscal 2023.

Where it is probable that costs will be incurred, and the information is sufficient to establish a range of possible liability, NJNG accrues the most likely amount in the range.

If no point within the range is more likely than the other, it is NJNG’s policy to accrue the lower end of the range.

As of September 30, 2023, NJNG recorded an MGP remediation liability and a corresponding regulatory asset of $169.4M on the Consolidated Balance Sheets, based on the most likely amount;

however, actual costs may differ from these estimates.

HUMAN CAPITAL RESOURCES

Employee Overview

NJR fundamentally believes that its employees make the Company a unique, successful organization – in creativity, commitment, ingenuity, hard work and innovation.

NJR employees fulfill the responsibilities that enable the Company to deliver natural gas service to its customers;

to be a leader in clean energy investments;

to grow its storage and transportation energy business;

and to earn the loyalty of its retail home services customers.

NJR also is committed to provide every appropriate resource to ensure its employees’ safety.

Through initiatives that start at the top, NJR has invested time, energy and manpower to foster a culture where safety is top-of-mind at all times, and where achieving safety goals is a shared priority for every NJR employee.

As of September 30, 2023, the Company and our subsidiaries employed 1,350 employees compared with 1,288 employees as of September 30, 2022.

Of the total number of employees, NJNG had 509 and 498 and NJRHS had 117 and 113 Union or Represented employees as of September 30, 2023 and 2022, respectively.

NJNG and NJRHS have collective bargaining agreements with the Union, which is affiliated with the American Federation of Labor and Congress of Industrial Organizations.

NJNG and the Union are in active negotiations to extend the collective bargaining agreement, which is scheduled to expire on December 7, 2023.

The collective bargaining agreement between NJRHS and the Union is scheduled to expire April 2, 2024.

The labor agreements cover wage increases and other benefits, including the defined benefit pension (which was closed to all employees hired on or after January 1, 2012, with the exception of certain rehires who are eligible to resume active participation), the postemployment benefit plan (which was closed to all employees hired on or after January 1, 2012) and the enhanced 401(k) retirement savings plan.

We consider our relationship with employees, including those covered by collective bargaining agreements, to be in good standing.

The Company depends on its key personnel to successfully operate its businesses, including its executive officers, senior corporate management and management at its operating units.

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Moreover, DEI and employee engagement are integral to NJR’s vision, strategy and business success.

Fostering an environment that values DEI and ethics helps create an organization

New Jersey Resources Corporation

BUSINESS (Continued)

that is able to embrace, leverage and respect the differences of employees, customers and the communities where we live, work and serve.

Fostering an environment that values DEI and ethics helps create an organization that is able to embrace, leverage and respect the differences of employees, customers and the communities where we live, work and serve.

We are proud of the strides we have made in furthering our DEI strategy and increasing employee engagement.

NJR is committed to this journey and knows our success makes us stronger as a company and community.

Complementing our efforts are a DEI Council and our seven employee-led Business Resource Groups, cross-functional teams of employees whose core mission is to advance their own professional development and cultivate deeper connections with co-workers and communities.

Complementing our efforts are a DEI Council and our employee-led Business Resource Groups, cross-functional teams of employees whose core mission is to advance their own professional development and cultivate deeper connections with co-workers and communities.

NJR periodically evaluates employees and their productivity against future demand expectations and historical trends.

NJR employees continue to maintain high levels of engagement, satisfaction and retention according to NJR’s most recent employee survey.

NJR employees continue to maintain high levels of engagement, satisfaction and retention according to NJR’s most recent employee survey conducted in October 2023.

NJR Board of Directors’ Role in Human Capital Resource Management

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The LDCC maintains oversight of matters related to human capital management, including talent retention, development and succession planning, and the Board of Directors provides input on important decisions in each of these areas.

NJR conducts an annual employee feedback survey, which is reviewed by the LDCC, designed to help the Company measure overall employee engagement.

NJR conducts an annual employee survey, which is reviewed by the LDCC, designed to help the Company measure overall employee engagement.

The feedback employees provide through the survey helps NJR evaluate the Company’s culture and the employee experience and monitor its current practices for potential areas of improvement.

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These benefits are designed to attract and retain our employees and include medical, vision and dental insurance, short- and long-term disability insurance, accidental death and disability insurance, travel and accident insurance and our 401(k) Plan.

As part of the 401(k) Plan, NJR matches 85% of the first 6% of compensation contributed by the employee into the 401(k) Plan, subject to the Internal Revenue Code and NJR’s 401(k) Plan limits.

As part of the 401(k) Plan, NJR has matched 85% of the first 6% of base compensation contributed by the employee into the 401(k) Plan, subject to the Internal Revenue Code and NJR’s 401(k) Plan limits.

Beginning on March 6, 2024, NJR’s contribution changed to 100% of the first 3% and 80% of the next 3% of base compensation.

Additionally, for employees who are not eligible to participate in the defined benefit plans, NJR annually contributes between 4% and 5% of base compensation, depending upon years of service, into the 401(k) Plan on their behalf.

AVAILABLE INFORMATION AND CORPORATE GOVERNANCE DOCUMENTS

The following reports and any amendments to those reports are available free of charge on our website at https://investor.njresources.com/financials/sec-filings/default.aspx as soon as reasonably possible after filing or furnishing them with the SEC:

The following reports and any amendments to those reports are available on our website at https://investor.njresources.com/financials/sec-filings as soon as reasonably possible after filing or furnishing them with the SEC:

• Annual reports on Form 10-K;

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• Current reports on Form 8-K.

The following documents are available free of charge on our website at https://investor.njresources.com/governance/governance-documents/default.aspx

New Jersey Resources Corporation

BUSINESS (Continued)

The following documents are available on our website at https://investor.njresources.com/governance/governance-documents:

• NJR Code of Conduct;

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• Wholesale Trading Code of Conduct;

• Dodd-Frank Compensation Recoupment Policy;

• Supplemental Clawback Policy;

• Insider Trading Policy;

• Charters of the following Board of Directors Committees:

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Please refer to the Proxy Statement when it is available.

New Jersey Resources Corporation

BUSINESS (Continued)

A printed copy of each document is available free of charge to any shareowner who requests it by contacting the Corporate Secretary at New Jersey Resources Corporation, 1415 Wyckoff Road, Wall, New Jersey 07719.

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since Business experience during last five years

Westhoven 55 2004 President and Chief Executive Officer (October 2019 - present)

President and Chief Operating Officer (October 2018 - September 2019)

Westhoven 56 2004 President and CEO (October 2019 - present)

President and Chief Operating Office (October 2018 - September 2019)

Roberto Bel 51 2019 Senior Vice President and Chief Financial Officer (January 2022 - present)

Vice President, Treasury and Investor Relations (April 2019 - December 2021)

Assistant Treasurer at Refinitiv (October 2018 - March 2019)

Migliaccio 50 2013 Senior Vice President and Chief Operating Officer (January 2022 - present)

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Jacqueline K.

Shea 59 2016 Senior Vice President and Chief Information Officer (January 2023 - present)

Vice President and Chief Information Officer (June 2016 - December 2022)

Shea 60 2016 Senior Vice President and CIO (January 2023 - present)

Vice President and CIO (June 2016 - December 2022)

Skrocki 48 2023 Corporate Controller (Principal Accounting Officer) (January 2023 - present)

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Unless indicated otherwise or the content requires otherwise, references below to “we,” “us,” and “our” should be read to refer to the Company and its subsidiaries and affiliates.

New Jersey Resources Corporation

RISK FACTORS (Continued)

Risks Related to Our Business Operations

Our investments in solar energy projects are subject to substantial risks and uncertainties.

Our investments in commercial and residential solar energy projects are dependent, in part, upon current state regulatory incentives and federal tax credits in order for the projects to be economically viable.

Our return on investment for these solar projects is based substantially on our eligibility for ITCs and the future market value of SRECs that are traded in a competitive marketplace in the State of New Jersey.

These projects face the risk that the current state regulatory programs and tax laws may expire or be adversely modified.

A sustained decrease in the value of SRECs could negatively impact the return on our investments and could impair our portfolio of solar assets.

In addition, there are risks associated with our ability to execute on our investment strategy of clean energy projects, which includes our ability to develop and manage such projects profitably.

There are risks associated with our ability to execute on our investment strategy of clean energy projects, which includes our ability to develop and manage such projects profitably.

These include logistical risks and potential delays related to construction, permitting and regulatory approvals (including any approvals by the BPU required pursuant to solar energy legislation in the State of New Jersey, and similar approvals required by the other states where our solar projects are located);

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Furthermore, at the development or acquisition stage, our ability to predict actual performance results may be hindered or inaccurate and the projects may not perform as predicted.

In addition, our investments in solar energy projects are dependent, in part, upon current state regulatory incentives and federal tax credits in order for the projects to be economically viable.

Our return on investment for these solar projects is based substantially on our eligibility for ITCs and the future market value of RECs that are traded in a competitive marketplace in the State of New Jersey.

These projects face the risk that the current state regulatory programs and tax laws may expire or be adversely modified.

A sustained decrease in the value of RECs could negatively impact the return on our investments and could impair our portfolio of solar assets.

Actions or limitations to address concerns over climate change, both globally and within our utilities' service areas, may affect our operations and financial performance.

Legislative, regulatory and advocacy efforts at the local, state and national levels concerning climate change and other environmental issues could have significant impacts on our operations.

The natural gas utility industry may be affected by proposals to curb greenhouse gas and other air emissions.

Various regulatory and legislative proposals have been made to limit or further restrict byproducts of combustion, including byproducts resulting from the use of natural gas by our customers.

In addition, regionally, a number of regulatory and legislative initiatives have been passed that are designed to limit greenhouse gas emissions and increase the use of renewable sources of energy, such as the ban of natural gas equipment in new construction in New York and elsewhere in the U.S.

In addition, regulatory and legislative initiatives may restrict customers’ access to natural gas and/or require or limit natural gas infrastructure in buildings.

Other initiatives may seek to promote social interests expressed as energy equity, environmental justice or similar frameworks.

Any such legislation could direct and/or restrict the operation and raise the costs of our energy delivery infrastructure as well as the distribution of natural gas to our customers.

Uncertainties associated with our pipeline of projects could adversely affect our business, results of operations, financial condition and cash flows.

Business development projects involve many risks.

We are currently engaged in business development projects, including projects in various stages of development tied to decarbonization efforts.

Timely completion of our projects is subject to certain risks, including those related to regulatory proceedings regarding permitting and adverse outcomes from legal challenges related to the projects’ authorizations from federal and state regulatory agencies.

We could also experience issues such as:

technological challenges;

ineffective scalability;

failure to achieve expected outcomes;

unsuccessful business models;

startup and construction delays;

construction cost overruns;

disputes with contractors;

the inability to negotiate acceptable agreements such as rights-of-way, easements, construction, gas supply or other material contracts;

changes in customer demand, perception or commitment;

public opposition to projects;

marketing risk and changes in market regulation, behavior or prices;

market volatility or unavailability, including markets for RNG and its associated attributes or other environmental attributes;

the inability to receive expected tax or regulatory treatment;

and operating cost increases.

Additionally, we may be unable to finance our business development projects at acceptable costs or within a scheduled time frame necessary for completing the project.

Any of the foregoing risks, if realized, could result in business development efforts failing to produce expected financial results and the project investment becoming impaired, and such failure or impairment could have an adverse effect on our business, results of operations, financial condition and cash flows.

New Jersey Resources Corporation

RISK FACTORS (Continued)

ES’s earnings and cash flows are dependent upon optimization of its contractual assets.

ES’s earnings and cash flows are based, in part, on its ability to optimize its portfolio of contractually based natural gas storage and pipeline assets.

The optimization strategy involves utilizing its physical assets to take advantage of differences in natural gas prices between geographic locations and/or time periods.

Any change among various pricing points could affect these differentials.

In addition, significant increases in the supply of natural gas in ES’s market areas, including as a result of increased production along the Marcellus Shale, can reduce ES’s ability to take advantage of pricing fluctuations in the future.

Changes in pricing dynamics and supply could have an adverse impact on ES’s optimization activities, earnings and cash flows.

ES incurs fixed demand fees to acquire its contractual rights to transportation and storage assets.

Should commodity prices at various locations or time periods change in such a way that ES is not able to recoup these costs from its customers, the cash flows and earnings at ES, and ultimately the Company, could be adversely impacted.

NJNG and ES rely on storage, transportation assets and suppliers, which they do not own or control, to deliver natural gas, which may affect their ability to deliver their products and services.

NJNG and ES depend on natural gas pipelines and other transportation and storage facilities owned and operated by third parties to deliver natural gas to wholesale and retail markets and to provide retail energy services to customers.

Their ability to provide natural gas for their present and projected sales will depend upon their suppliers’ ability to obtain and deliver additional supplies of natural gas, as well as NJNG’s ability to acquire supplies directly from new sources.

Factors beyond the control of NJNG, its suppliers and the independent suppliers that have obligations to provide natural gas to certain NJNG customers may affect NJNG’s ability to deliver such supplies.

These factors include other parties’ control over the drilling of new wells and the facilities to transport natural gas to NJNG’s citygate stations;

development of additional interstate pipeline infrastructure;

availability of supply sources;

third-party pipelines or other midstream facilities interconnected to our gathering or transportation system, such as the TETCO or Transcontinental Pipeline, becoming partially or fully unavailable;

competition for the acquisition of natural gas;

priority allocations;

impact of severe weather disruptions to natural gas supplies;

and the regulatory and pricing policies of federal and state regulatory agencies.

Energy deregulation legislation may increase competition among natural gas utilities and impact the quantities of natural gas requirements needed for sales service.

ES also relies on a firm supply source to meet its energy management obligations to its customers.

If supply, transportation or storage is disrupted, including for reasons of force majeure, the ability of NJNG and ES to sell and deliver their products and services may be hindered.

As a result, they may be responsible for damages incurred by their customers, such as the additional cost of acquiring alternative supply at then-current market rates.

Particularly for ES, these conditions could have a material impact on our financial condition, results of operations and cash flows.

Failure to attract and retain an appropriately qualified employee workforce could adversely affect operations.

Our ability to implement our business strategy and serve our customers is dependent upon our continuing ability to attract and retain talented professionals and a technically skilled workforce, and being able to transfer the knowledge and expertise of our workforce to new employees as our aging employees retire.

Failure to hire and adequately train replacement employees, including the transfer of significant internal historical knowledge and expertise to the new employees, or the future availability and cost of contract labor could adversely affect the ability to manage and operate our business.

Disputes with the Union over terms and conditions of the collective bargaining agreements could result in instability in our labor relationship and work stoppages that could impair the timely delivery of natural gas and other services from our utility and Home Services business, which could strain relationships with customers and state regulators and cause a loss of revenues that could adversely affect our results of operations.

Our collective bargaining agreements may also increase the cost of employing NJNG and Home Services workforce, affect our ability to continue offering market-based salaries and employee benefits, limit our flexibility in dealing with our workforce and limit our ability to change work rules and practices and implement other efficiency-related improvements to successfully compete in today’s challenging marketplace.

Our success depends upon our ability to attract, effectively transition, motivate and retain key employees and identify and develop talent to succeed senior management.

We depend on senior executive officers and other key personnel to develop, implement and execute on our overall business strategy.

The inability to recruit and retain or effectively transition key personnel or the unexpected loss of key personnel may adversely affect our operations.

New Jersey Resources Corporation

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What changed 10-K

Item 1. Business