----

----

| [X] | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|-----|---------------------------------------------------------------------------------------------------|

| New      Jersey                     | 21-0398330                        |
|-------------------------------------|----------------------------------------|
|  (State      of incorporation) | (IRS      employer identification no.) |

| Large      accelerated filer | [   ]                                        | Accelerated      filer         | [   ] |
|------------------------------|-------------------------------------------------------------|--------------------------------|----------------------|
| Non-accelerated      filer   | [X]      (Do not check if a smaller reporting company) | Smaller      reporting company | [        ]      |

----

----

----

----

| SOUTH      JERSEY GAS COMPANY                                                                          |   |
|--------------------------------------------------------------------------------------------------------|--------|
|                                                                                                   |   |   |   |   |   |   |
| CONDENSED      STATEMENTS OF INCOME (UNAUDITED)                                                        |   |
| (In      Thousands)                                                                                    |   |
|                                                                                                   |   |   |   |   |   |   |
|                                                                                                   |   | Three      Months Ended |   |
|                                                                                                   |   | March      31, |   |
|                                                                                                   |   | 2009 |   |   | 2008 |   |
|                                                                                                   |   |   |   |   |   |   |
|                                                                                                   |   |   |   |   |   |   |
| Operating      Revenues                                                                                |   | $ | 243,113 |   |   | $ | 237,904 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Operating      Expenses:                                                                               |   |   |   |   |   |   |   |   |
|    Cost      of Sales (Excluding depreciation)                                          |   |   | 165,977 |   |   |   | 162,917 |   |
|    Operations                                                                           |   |   | 17,360 |   |   |   | 15,125 |   |
|    Maintenance                                                                          |   |   | 2,156 |   |   |   | 1,852 |   |
|    Depreciation                                                                         |   |   | 6,633 |   |   |   | 6,305 |   |
|    Energy      and Other Taxes                                                          |   |   | 4,621 |   |   |   | 4,357 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
|       Total      Operating Expenses                                      |   |   | 196,747 |   |   |   | 190,556 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Operating      Income                                                                                  |   |   | 46,366 |   |   |   | 47,348 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Other      Income and Expense                                                                          |   |   | 324 |   |   |   | 170 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Interest      Charges                                                                                  |   |   | (4,097 | ) |   |   | (4,975 | ) |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Income      Before Income Taxes                                                                        |   |   | 42,593 |   |   |   | 42,543 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Income      Taxes                                                                                      |   |   | (17,615 | ) |   |   | (17,530 | ) |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Net      Income                                                                                        |   | $ | 24,978 |   |   | $ | 25,013 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| The      accompanying notes are an integral part of the unaudited condensed      financial statements. |   |   |   |   |   |
|                                                                                                   |   |   |   |   |   |   |   |   |

----

| SOUTH JERSEY GAS COMPANY                                                                               |   |
|--------------------------------------------------------------------------------------------------------|--------|
|                                                                                                   |   |   |   |   |   |   |
| CONDENSED      STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)                                          |   |
| (In      Thousands)                                                                                    |   |
|                                                                                                   |   |   |   |   |   |   |
|                                                                                                   |   | Three      Months Ended |   |
|                                                                                                   |   | March      31, |   |
|                                                                                                   |   | 2009 |   |   | 2008 |   |
|                                                                                                   |   |   |   |   |   |   |
|                                                                                                   |   |   |   |   |   |   |
|                                                                                                   |   |   |   |   |   |   |
| Net      Income                                                                                        |   | $ | 24,978 |   |   | $ | 25,013 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Other      Comprehensive (Loss) Income - Net of Tax:                                                   |   |   |   |   |   |   |   |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
|   Unrealized      Loss on Available-for-Sale Securities                                      |   |   | (170 | ) |   |   | (238 | ) |
|   Unrealized      Gain on Derivatives - Other                                                |   |   | 7 |   |   |   | 7 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
|      Other      Comprehensive Loss - Net of Tax *                             |   |   | (163 | ) |   |   | (231 | ) |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Comprehensive      Income                                                                              |   | $ | 24,815 |   |   | $ | 24,782 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| *      Determined using a combined statutory tax rate of 41.08%                                        |   |   |   |   |   |   |   |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| The      accompanying notes are an integral part of the unaudited condensed      financial statements. |   |   |   |   |   |
|                                                                                                   |   |   |   |   |   |   |   |   |

----

| SOUTH JERSEY GAS COMPANY                                                                               |   |
|--------------------------------------------------------------------------------------------------------|--------|
|                                                                                                   |   |   |   |   |   |   |
| CONDENSED      STATEMENTS OF CASH FLOWS (UNAUDITED)                                                    |   |
| (In      Thousands)                                                                                    |   |
|                                                                                                   |   |   |   |   |   |   |
|                                                                                                   |   | Three      Months Ended |   |
|                                                                                                   |   | March      31, |   |
|                                                                                                   |   | 2009 |   |   | 2008 |   |
|                                                                                                   |   |   |   |   |   |   |
|                                                                                                   |   |   |   |   |   |   |
| Net      Cash Provided by Operating Activities                                                         |   | $ | 51,274 |   |   | $ | 60,772 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Cash      Flows from Investing Activities:                                                             |   |   |   |   |   |   |   |   |
|      Capital      Expenditures                                                |   |   | (15,676 | ) |   |   | (11,414 | ) |
|      Investment      in Long-Term Receivables                                 |   |   | (2,044 | ) |   |   | (1,166 | ) |
|      Proceeds      from Long-Term Receivables                                 |   |   | 2,869 |   |   |   | 928 |   |
|      Purchase      of Restricted Investments with Escrowed Loan Proceeds      |   |   | - |   |   |   | (18 | ) |
|                                                                                                   |   |   |   |   |   |   |   |   |
|         Net      Cash Used in Investing Activities             |   |   | (14,851 | ) |   |   | (11,670 | ) |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Cash      Flows from Financing Activities:                                                             |   |   |   |   |   |   |   |   |
|   Net      Repayments of Lines of Credit                                                     |   |   | (32,975 | ) |   |   | (46,540 | ) |
|   Principal      Repayments of Long-Term Debt                                                |   |   | (10 | ) |   |   | - |   |
|   Excess      Tax Benefit from Restricted Stock Plan                                         |   |   | - |   |   |   | 236 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
|         Net      Cash Used in Financing Activities             |   |   | (32,985 | ) |   |   | (46,304 | ) |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Net      Increase in Cash and Cash Equivalents                                                         |   |   | 3,438 |   |   |   | 2,798 |   |
| Cash      and Cash Equivalents at Beginning of Period                                                  |   |   | 2,228 |   |   |   | 3,230 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Cash      and Cash Equivalents at End of Period                                                        |   | $ | 5,666 |   |   | $ | 6,028 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| The      accompanying notes are an integral part of the unaudited condensed      financial statements. |   |   |   |   |   |
|                                                                                                   |   |   |   |   |   |   |   |   |

----

| SOUTH JERSEY GAS COMPANY                                                                                      |   |
|---------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                          |   |   |   |   |   |   |
| CONDENSED      BALANCE SHEETS (UNAUDITED)                                                                     |   |
| (In      Thousands)                                                                                           |   |
|                                                                                                          |   |   |   |
|                                                                                                          |   | March      31, |   |   | December      31, |   |
|                                                                                                          |   | 2009 |   |   | 2008 |   |
| Assets                                                                                                        |   |   |   |   |   |   |
|                                                                                                          |   |   |   |   |   |   |
| Property,      Plant and Equipment:                                                                           |   |   |   |   |   |   |
|    Utility      Plant, at original cost                                                        |   | $ | 1,184,032 |   |   | $ | 1,172,014 |   |
|      Accumulated      Depreciation                                                   |   |   | (299,095 | ) |   |   | (295,432 | ) |
|                                                                                                          |   |   |   |   |   |   |   |   |
|           Property,      Plant and Equipment - Net          |   |   | 884,937 |   |   |   | 876,582 |   |
|                                                                                                          |   |   |   |   |   |   |   |   |
| Investments:                                                                                                  |   |   |   |   |   |   |   |   |
|    Available-for-Sale      Securities                                                          |   |   | 4,515 |   |   |   | 4,841 |   |
|    Restricted      Investments                                                                 |   |   | 132 |   |   |   | 132 |   |
|                                                                                                          |   |   |   |   |   |   |   |   |
|           Total      Investments                            |   |   | 4,647 |   |   |   | 4,973 |   |
|                                                                                                          |   |   |   |   |   |   |   |   |
| Current      Assets:                                                                                          |   |   |   |   |   |   |   |   |
|    Cash      and Cash Equivalents                                                              |   |   | 5,666 |   |   |   | 2,228 |   |
|    Accounts      Receivable                                                                    |   |   | 117,901 |   |   |   | 47,787 |   |
|    Accounts      Receivable - Related Parties                                                  |   |   | 1,417 |   |   |   | 624 |   |
|    Unbilled      Revenues                                                                      |   |   | 31,145 |   |   |   | 48,225 |   |
|    Provision      for Uncollectibles                                                           |   |   | (4,105 | ) |   |   | (3,628 | ) |
|    Natural      Gas in Storage, average cost                                                   |   |   | 12,512 |   |   |   | 65,252 |   |
|    Materials      and Supplies, average cost                                                   |   |   | 11,999 |   |   |   | 11,247 |   |
|    Prepaid      Taxes                                                                          |   |   | - |   |   |   | 11,860 |   |
|    Derivatives      - Energy Related Assets                                                    |   |   | 83 |   |   |   | 380 |   |
|    Other      Prepayments and Current Assets                                                   |   |   | 2,230 |   |   |   | 2,416 |   |
|                                                                                                          |   |   |   |   |   |   |   |   |
|           Total      Current Assets                         |   |   | 178,848 |   |   |   | 186,391 |   |
|                                                                                                          |   |   |   |   |   |   |   |   |
| Regulatory      and Other Noncurrent Assets:                                                                  |   |   |   |   |   |   |   |   |
|    Regulatory      Assets                                                                      |   |   | 254,090 |   |   |   | 270,434 |   |
|    Unamortized      Debt Issuance Costs                                                        |   |   | 6,023 |   |   |   | 6,147 |   |
|    Long-Term      Receivables                                                                  |   |   | 5,600 |   |   |   | 7,081 |   |
|    Derivatives      - Energy Related Assets                                                    |   |   | 40 |   |   |   | 15 |   |
|    Other                                                                                       |   |   | 2,987 |   |   |   | 2,392 |   |
|                                                                                                          |   |   |   |   |   |   |   |   |
|           Total      Regulatory and Other Noncurrent Assets |   |   | 268,740 |   |   |   | 286,069 |   |
|                                                                                                          |   |   |   |   |   |   |   |   |
|                Total      Assets   |   | $ | 1,337,172 |   |   | $ | 1,354,015 |   |
|                                                                                                          |   |   |   |   |   |   |   |   |
| The      accompanying notes are an integral part of the unaudited condensed      financial statements.        |   |   |   |   |   |

----

|                                                                                                                                |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|
| SOUTH      JERSEY GAS COMPANY                                                                                                       |   |
|                                                                                                                                |   |   |   |   |   |   |
| CONDENSED      BALANCE SHEETS (UNAUDITED)                                                                                           |   |
| (In      Thousands, except per share amounts)                                                                                       |   |
|                                                                                                                                |   |   |   |
|                                                                                                                                |   | March      31, |   |   | December      31, |   |
|                                                                                                                                |   | 2009 |   |   | 2008 |   |
|                                                                                                                                |   |   |   |   |   |   |
| Capitalization and    Liabilities                                                                                                   |   |   |   |   |   |   |
|                                                                                                                                |   |   |   |   |   |   |
| Common      Equity:                                                                                                                 |   |   |   |   |   |   |
|    Common      Stock, Par Value $2.50 per share:                                                                     |   |   |   |   |   |   |
|       Authorized      - 4,000,000 shares                                                              |   |   |   |   |   |   |
|       Outstanding      - 2,339,139 shares                                                             |   | $ | 5,848 |   |   | $ | 5,848 |   |
|    Other      Paid-In Capital and Premium on Common Stock                                                            |   |   | 200,663 |   |   |   | 200,663 |   |
|    Accumulated      Other Comprehensive Loss                                                                         |   |   | (7,038 | ) |   |   | (6,875 | ) |
|    Retained      Earnings                                                                                            |   |   | 224,580 |   |   |   | 202,103 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |
|           Total      Common Equity                                                |   |   | 424,053 |   |   |   | 401,739 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |
| Long-Term      Debt                                                                                                                 |   |   | 269,863 |   |   |   | 269,873 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |
|           Total      Capitalization                                               |   |   | 693,916 |   |   |   | 671,612 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |
| Current      Liabilities:                                                                                                           |   |   |   |   |   |   |   |   |
|    Notes      Payable                                                                                                |   |   | 81,575 |   |   |   | 114,550 |   |
|    Current      Portion of Long-Term Debt                                                                            |   |   | 25,000 |   |   |   | 25,000 |   |
|    Accounts      Payable - Commodity                                                                                 |   |   | 9,696 |   |   |   | 36,587 |   |
|    Accounts      Payable - Other                                                                                     |   |   | 14,475 |   |   |   | 12,051 |   |
|    Accounts      Payable - Related Parties                                                                           |   |   | 17,215 |   |   |   | 16,744 |   |
|    Derivatives      - Energy Related Liabilities                                                                     |   |   | 28,965 |   |   |   | 26,698 |   |
|    Deferred      Income Taxes - Net                                                                                  |   |   | 12,139 |   |   |   | 12,475 |   |
|    Customer      Deposits and Credit Balances                                                                        |   |   | 14,769 |   |   |   | 14,219 |   |
|    Environmental      Remediation Costs                                                                              |   |   | 8,766 |   |   |   | 13,117 |   |
|    Taxes      Accrued                                                                                                |   |   | 16,865 |   |   |   | 2,291 |   |
|    Pension      Benefits                                                                                             |   |   | 991 |   |   |   | 991 |   |
|    Interest      Accrued                                                                                             |   |   | 4,706 |   |   |   | 6,244 |   |
|    Dividends      Declared                                                                                           |   |   | 2,501 |   |   |   | - |   |
|    Other      Current Liabilities                                                                                    |   |   | 5,818 |   |   |   | 6,449 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |
|           Total      Current Liabilities                                          |   |   | 243,481 |   |   |   | 287,416 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |
| Regulatory      and Other Noncurrent Liabilities:                                                                                   |   |   |   |   |   |   |   |   |
|    Regulatory      Liabilities                                                                                       |   |   | 52,481 |   |   |   | 50,447 |   |
|    Deferred      Income Taxes - Net                                                                                  |   |   | 191,198 |   |   |   | 187,050 |   |
|    Environmental      Remediation Costs                                                                              |   |   | 49,320 |   |   |   | 50,976 |   |
|    Asset      Retirement Obligations                                                                                 |   |   | 22,453 |   |   |   | 22,299 |   |
|    Pension      and Other Postretirement Benefits                                                                    |   |   | 69,454 |   |   |   | 67,566 |   |
|    Investment      Tax Credits                                                                                       |   |   | 1,753 |   |   |   | 1,832 |   |
|    Derivatives      - Energy Related Liabilities                                                                     |   |   | 2,691 |   |   |   | 2,667 |   |
|    Derivatives      - Other                                                                                          |   |   | 5,967 |   |   |   | 7,578 |   |
|    Other                                                                                                             |   |   | 4,458 |   |   |   | 4,572 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |
|             Total      Regulatory and Other Noncurrent Liabilities      |   |   | 399,775 |   |   |   | 394,987 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |
|    Commitments      and Contingencies (Note 9)                                                                       |   |   |   |   |   |   |   |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |
|                Total      Capitalization and Liabilities |   | $ | 1,337,172 |   |   | $ | 1,354,015 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |
| The      accompanying notes are an integral part of the unaudited condensed      financial statements.                              |   |   |   |   |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |

----

----

|                                                                            | Fair      Values of Derivative Instruments       |
|----------------------------------------------------------------------------|--------------------------------------------------|
|                                                                       |                                             |   |   |   |   |   |   |   |
|                                                                       | Asset      Derivatives                           |   |
|                                                                       |                                             |   |   |   |   |   |   |   |
|                                                                       | March      31, 2009                              |   | December      31, 2008 |   |
|                                                                       |                                             |   |   |   |   |   |   |   |
|                                                                       | Balance      Sheet Location                      |   | Fair      Value |   | Balance      Sheet Location |   | Fair      Value |   |
|                                                                       |                                             |   |   |   |   |   |   |   |   |   |
| Derivatives      not designated as hedging instruments under Statement 133 |                                             |   |   |   |   |   |   |   |   |   |
|                                                                       |                                             |   |   |   |   |   |   |   |   |   |
| Energy      related commodity contracts                               | Derivatives      - Energy Related Assets-Current |   | $ | 83 |   | Derivatives      - Energy Related Assets-Current |   | $ | 380 |   |
|                                                                       |                                             |   |   |   |   |   |   |   |   |   |
|                                                                       | Noncurrent                                       |   |   | 40 |   | Noncurrent |   |   | 15 |   |
|                                                                       |                                             |   |   |   |   |   |   |   |   |   |
| Total      asset derivatives                                               |                                             |   | $ | 123 |   |   |   | $ | 395 |   |
|                                                                       |                                             |   |   |   |   |   |   |   |   |   |

|                                                                       | Liability      Derivatives                            |   |
|----------------------------------------------------------------------------|-------------------------------------------------------|--------|
|                                                                       |                                                  |   |   |   |
|                                                                       | March      31, 2009                                   |   | December      31, 2008 |   |
|                                                                       |                                                  |   |   |   |   |   |   |   |
|                                                                       | Balance      Sheet Location                           |   | Fair      Value |   | Balance      Sheet Location |   | Fair      Value |   |
|                                                                       |                                                  |   |   |   |   |   |   |   |
| Derivatives      not designated as hedging instruments under Statement 133 |                                                  |   |   |   |   |   |   |   |   |   |
|                                                                       |                                                  |   |   |   |   |   |   |   |   |   |
|  Energy      related commodity contracts                         | Derivatives      - Energy Related Liabilities-Current |   | $ | 28,965 |   | Derivatives      - Energy Related Liabilities-Current |   | $ | 26,698 |   |
|                                                                       |                                                  |   |   |   |   |   |   |   |   |   |
|                                                                       | Noncurrent                                            |   |   |  2,691 |   | Noncurrent |   |   |  2,667 |   |
|                                                                       |                                                  |   |   |   |   |   |   |   |   |   |
|  Interest      rate contracts                                         | Derivatives      - Other                              |   |   | 5,967 |   | Derivatives      - Other |   |   |  7,578 |   |
|                                                                       |                                                  |   |   |   |   |   |   |   |   |   |
| Total      liability derivatives                                           |                                                  |   | $ | 37,623 |   |   |   | $ | 36,943 |   |

| Grant          |   | Shares      |   |   | Fair      Value |   |   | Expected   |   | Risk-Free          |
|----------------|--------|-------------|--------|--------|-----------------|--------|--------|------------|--------|--------------------|
| Date           |   | Outstanding |   |   | Per      Share  |   |   | Volatility |   | Interest      Rate |
|           |   |        |   |   |            |   |   |       |   |               |
| Jan.      2007 |   |        | 9,045  |   |            | $      | 29.210 |       |   |               | 18.5% |   |   | 4.9% |
| Jan.      2008 |   |        | 9,238  |   |            | $      | 34.030 |       |   |               | 21.7% |   |   | 2.9% |
| Jan.      2009 |   |        | 8,318  |   |            | $      | 39.350 |       |   |               | 28.6% |   |   | 1.2% |

----

|                                               |   | Shares |   |   | Weighted      AverageGrant      DateFair      Value |   |
|----------------------------------------------------|--------|--------|--------|--------|-----------------------------------------------------|--------|
| Nonvested      Shares Outstanding, January 1, 2009 |   |   | 18,283 |   |                                                | $      | 31.645 |   |
|                                               |   |   |   |   |                                                |   |   |   |
| Granted                                            |   |   | 8,318  |   |                                                |   | 39.350 |   |
|                                               |   |   |   |   |                                                |   |   |   |
|                                               |   |   |   |   |                                                |   |   |   |
| Nonvested      Shares Outstanding, March 31, 2009  |   |   | 26,601 |   |                                                | $      | 34.055 |   |
|                                               |   |   |   |   |                                                |   |   |   |

----

 This FSP amends FASB 
StatementNo. 107, “Disclosures about Fair Value of Financial Instruments”, to requiredisclosures about fair value of financial instruments for interim reportingperiods of publicly traded companies as well as in annual financial statements.This FSP also amends 
APB Opinion No. 28, “InterimFinancial Reporting,” to require those disclosures in summarized financialinformation at interim reporting periods. This FSP shall be effective forinterim reporting periods ending after June 15, 2009. Management is currentlyevaluating the impact that the adoption of this FSP will have on the SJG’scondensed financial statements.

|                                                                                                             |   | March  31, |    |   | December      31, |   |
|------------------------------------------------------------------------------------------------------------------|--------|----------------------|---------|--------|-------------------|--------|
|                                                                                                             |   | 2009                 |    |   | 2008              |   |
| Environmental      Remediation Costs:Expended      - Net                                                         |   | $                    | 47,756  |   |              | $      | 48,143 |   |
| Liability      for Future Expenditures                                                                           |   |                 | 58,086  |   |              |   | 64,093 |   |
| Income      Taxes - Flowthrough Depreciation                                                                     |   |                 | 2,485   |   |              |   | 2,729 |   |
| Deferred      Asset Retirement Obligation Costs                                                                  |   |                 | 22,033  |   |              |   | 21,901 |   |
| Deferred      Pension and Other Postretirement Benefit Costs                                                     |   |                 | 80,067  |   |              |   | 80,162 |   |
| Deferred      Gas Costs - Net                                                                                    |   |                 | 17,202  |   |              |   | 18,406 |   |
| Conservation      Incentive Program Receivable                                                                   |   |                 | 16,287  |   |              |   | 22,048 |   |
| Societal      Benefit Costs Receivable                                                                           |   |                 | 622     |   |              |   | 1,753 |   |
| Premium      for Early Retirement of Debt                                                                        |   |                 | 1,167   |   |              |   | 1,208 |   |
| Other      Regulatory Assets                                                                                     |   |                 | 8,385   |   |              |   | 9,991 |   |
|                                                                                                             |   |                 |    |   |              |   |   |   |
|               Total      Regulatory Assets |   | $                    | 254,090 |   |              | $      | 270,434 |   |

----

|                              |   | March 31, |   |   | December      31, |   |
|-----------------------------------|--------|----------------|--------|--------|-------------------|--------|
|                              |   | 2009           |   |   | 2008              |   |
| Excess      Plant Removal Costs   |   | $              | 48,854 |   |              | $      | 48,820 |   |
| Other      Regulatory Liabilities |   |           | 3,627  |   |              |   | 1,627 |   |
|                              |   |           |   |   |              |   |   |   |
| Total      Regulatory Liabilities |   | $              | 52,481 |   |              | $      | 50,447 |   |

| 4. | RELATED      PARTY TRANSACTIONS: |
|----|----------------------------------|

|                                           | 2009   |   | 2008   |   |
|------------------------------------------------|--------|--------|--------|--------|
| Operating      Revenues/Affiliates:       |   |   |   |   |
|  SJRG                                     |   | $      | 2,892  |   |   | $ | 1,407 |   |
|  Other                                    |   |   | 146    |   |   |   | 127 |   |
|  Total      Operating Revenues/Affiliates |   | $      | 3,038  |   |   | $ | 1,534 |   |

|                                                           |   | 2009   |   |   | 2008   |   |
|----------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Costs      of Sales/Affiliates (Excluding depreciation):  |   |   |   |   |   |   |
|   SJRG                                     |   | $      | 26,726 |   |   | $      | 12,193 |   |

| Derivative      Gains  (See Note 1):  |   |   |   |   |   |   |
|------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|           SJRG              |   | $      | 16,910 |   |   | $      | 403 |   |

| Operations      Expense/Affiliates:       |   |   |   |    |   |   |
|------------------------------------------------|--------|--------|--------|---------|--------|--------|
|      SJI              |   | $      | 1,772  |    |   | $      | 1,646 |   |
|      SJIS             |   |   | 1,283  |    |   |   | 1,048 |   |
|      Millennium       |   |   | 713    |    |   |   | 713 |   |
|      Other            |   |   | (74    | )  |   |   | (158 | ) |
|  Total      Operations Expense/Affiliates |   | $      | 3,694  |    |   | $      | 3,249 |   |
|                                           |   |   |   |    |   |   |   |   |

----

|                           |   | Total      Facility |    |   | Usage  |   |    | Available      Liquidity |   | Expiration      Date |
|--------------------------------|--------|---------------------|---------|--------|--------|--------|---------|--------------------------|--------|----------------------|
|                           |   |                |    |   |   |   |    |                     |   |                 |
| Revolving      Credit Facility |   | $                   | 100,000 |   |   | $      | 50,000  |                     |   | $                    | 50,000 |   | August      2011 |
| Line      of Credit            |   |                | 40,000  |   |   |   | — |                     |   |                 | 40,000 |   | December      2009 |
| Line      of Credit       |   |                | 10,000  |   |   |   | 10,000  |                     |   |                 | — |   | August      2009 |
| Uncommitted      Bank Lines    |   |                | 53,000  |   |   |   | 21,575  |                     |   |                 | 31,425 |   | Various |
|                           |   |                |    |   |   |   |    |                     |   |                 |   |   |   |
| Total                          |   | $                   | 203,000 |   |   | $      | 81,575  |                     |   | $                    | 121,425 |   |   |
|                           |   |                |    |   |   |   |    |                     |   |                 |   |   |   |

|                                                                                                   |   | Pension      Benefits                 |   |   | Other      Postretirement Benefits    |   |
|--------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|--------|---------------------------------------|--------|
|                                                                                                   |   | Three      Months EndedMarch      31, |   |   | Three      Months EndedMarch      31, |   |
|                                                                                                   |   | 2009                                  |   |   | 2008                                  |   |   | 2009 |   |   | 2008 |   |
|                                                                                                   |   |                                  |   |   |                                  |   |   |   |   |   |   |   |
| Service      Cost                                                                                      |   | $                                     | 692    |   |                                  | $      | 556 |   |   | $ | 210 |   |   | $ | 201 |   |
| Interest      Cost                                                                                     |   |                                  | 1,707  |   |                                  |   | 1,322 |   |   |   | 599 |   |   |   | 558 |   |
| Expected      Return on Plan Assets                                                                    |   |                                  | (1,508 | )      |                                  |   | (1,669 | ) |   |   | (304 | ) |   |   | (408 | ) |
| Amortizations:                                                                                         |   |                                  |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
|  Prior      Service Cost (Credits)                                                                |   |                                  | 55     |   |                                  |   | 48 |   |   |   | (69 | )  |   |   | (65 | )  |
|             Actuarial      Loss            |   |                                  | 1,079  |   |                                  |   | 265 |   |   |   | 356 |   |   |   | 140 |   |
| Net      Periodic Benefit Cost                                                                         |   |                                  | 2,025  |   |                                  |   | 522 |   |   |   | 792 |   |   |   | 426 |   |
|             Capitalized      Benefit Costs |   |                                  | (992   | )      |                                  |   | (256 | ) |   |   | (388 | ) |   |   | (209 | ) |
| Total      Net Periodic Benefit Expense                                                                |   | $                                     | 1,033  |   |                                  | $      | 266 |   |   | $ | 404 |   |   | $ | 217 |   |
|                                                                                                   |   |                                  |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |

----

|   | · | Level      1:  Observable inputs such as quoted prices in active markets      for identical assets orliabilities. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

|   | · | 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. |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

----

|                                                    |   | Total  |   |   | Level      1 |   |   | Level      2 |   |   | Level      3 |   |
|---------------------------------------------------------|--------|--------|--------|--------|--------------|--------|--------|--------------|--------|--------|--------------|--------|
| Assets -                                           |   |   |   |   |         |   |   |         |   |   |         |   |
|                                                    |   |   |   |   |         |   |   |         |   |   |         |   |   |   |   |   |
| Available-for-Sale      Securities (A)                  |   | $      | 4,515  |   |         | $      | 4,515  |         |   | $      | -            |   |   | $ | - |   |
| Derivatives      – Energy Related Assets (B)      |   |   | 123    |   |         |   | 101    |         |   |   | 22           |   |   |   | - |   |
|                                                    |   | $      | 4,638  |   |         | $      | 4,616  |         |   | $      | 22           |   |   | $ | - |   |
|                                                    |   |   |   |   |         |   |   |         |   |   |         |   |   |   |   |   |
| Liabilities -                                           |   |   |   |   |         |   |   |         |   |   |         |   |   |   |   |   |
|                                                    |   |   |   |   |         |   |   |         |   |   |         |   |   |   |   |   |
| Derivatives      – Energy Related Liabilities (B) |   | $      | 31,656 |   |         | $      | 31,631 |         |   | $      | 25           |   |   | $ | - |   |
| Derivatives      – Other (C)                      |   |   | 5,967  |   |         |   | -      |         |   |   | 5,967        |   |   |   | - |   |
|                                                    |   | $      | 37,623 |   |         | $      | 31,631 |         |   | $      | 5,992        |   |   | $ | - |   |
|                                                    |   |   |   |   |         |   |   |         |   |   |         |   |   |   |   |   |

| 11. | AVAILABLE–FOR–SALE      SECURITIES: |
|-----|-------------------------------------------------|

|                              |   | Less      than 12 Months |   |   | Greater      Than 12 Months |   |   | Total           |   |
|-----------------------------------|--------|--------------------------|--------|--------|-----------------------------|--------|--------|-----------------|--------|
|                              |   |                     |   |   |                        |   |   |            |   |   |   |   |   |   |   |   |   |   |
|                              |   | Fair      Value          |   |   | Unrealized      Losses      |   |   | Fair      Value |   |   | Unrealized      Losses |   |   | Fair      Value |   |   | Unrealized      Losses |   |
| Marketable      Equity Securities |   | $                        | 2,054  |   |                        | $      | 632    |            |   | $ | 1,284 |   |   | $ | 875 |   |   | $ | 3,338 |   |   | $ | 1,507 |   |

----

----

|                                        |   | Three      Months Ended |   |   |
|---------------------------------------------|--------|-------------------------|--------|--------|
|                                        |   | March      31,          |   |   |
|                                        |   | 2009                    |   |   | 2008 |   |   |
| Throughput – dth:                     |   |                    |   |   |   |   |   |
| Firm      Sales -                           |   |                    |   |   |   |   |   |
| Residential                                 |   |                    | 11,517 |   |   |   | 10,183 |   |   |
| Commercial                                  |   |                    | 2,877  |   |   |   | 2,584 |   |   |
| Industrial                                  |   |                    | 149    |   |   |   | 75 |   |   |
| Cogeneration      & Electric Generation |   |                    | 14     |   |   |   | 16 |   |   |
| Firm      Transportation -                  |   |                    |   |   |   |   |   |   |   |
| Residential                                 |   |                    | 1,007  |   |   |   | 952 |   |   |
| Commercial                                  |   |                    | 2,571  |   |   |   | 2,460 |   |   |
| Industrial                                  |   |                    | 3,052  |   |   |   | 3,280 |   |   |
| Cogeneration      & Electric Generation |   |                    | 433    |   |   |   | 352 |   |   |
|                                        |   |                    |   |   |   |   |   |   |   |
| Total      Firm Throughput                  |   |                    | 21,620 |   |   |   | 19,902 |   |   |
|                                        |   |                    |   |   |   |   |   |   |   |
| Interruptible      Sales                    |   |                    | 2      |   |   |   | 9 |   |   |
| Interruptible      Transportation           |   |                    | 636    |   |   |   | 912 |   |   |
| Off-System                                  |   |                    | 2,694  |   |   |   | 4,239 |   |   |
| Capacity      Release                       |   |                    | 8,499  |   |   |   | 11,230 |   |   |
|                                        |   |                    |   |   |   |   |   |   |   |
| Total      Throughput                       |   |                    | 33,451 |   |   |   | 36,292 |   |   |

|                                        |   | Three      Months Ended |    |
|---------------------------------------------|--------|-------------------------|---------|
|                                        |   | March      31,          |    |
|                                        |   | 2009                    |    |   | 2008 |   |
| Utility Operating Revenues:                 |   |                    |    |   |   |   |
| Firm      Sales -                           |   |                    |    |   |   |   |
| Residential                                 |   | $                       | 168,638 |   |   | $ | 143,468 |   |
| Commercial                                  |   |                    | 36,526  |   |   |   | 31,186 |   |
| Industrial                                  |   |                    | 1,811   |   |   |   | 3,555 |   |
| Cogeneration      & Electric Generation |   |                    | 273     |   |   |   | 327 |   |
| Firm      Transportation -                  |   |                    |    |   |   |   |   |   |
| Residential                                 |   |                    | 4,695   |   |   |   | 4,469 |   |
| Commercial                                  |   |                    | 7,914   |   |   |   | 7,653 |   |
| Industrial                                  |   |                    | 3,587   |   |   |   | 3,192 |   |
| Cogeneration      & Electric Generation |   |                    | 459     |   |   |   | 322 |   |
|                                        |   |                    |    |   |   |   |   |   |
| Total      Firm Revenues                    |   |                    | 223,903 |   |   |   | 194,172 |   |
|                                        |   |                    |    |   |   |   |   |   |
| Interruptible      Sales                    |   |                    | 40      |   |   |   | 125 |   |
| Interruptible      Transportation           |   |                    | 557     |   |   |   | 596 |   |
| Off-System                                  |   |                    | 16,902  |   |   |   | 39,990 |   |
| Capacity      Release                       |   |                    | 1,440   |   |   |   | 2,800 |   |
| Other                                       |   |                    | 271     |   |   |   | 221 |   |
|                                        |   |                    |    |   |   |   |   |   |
| Total      Utility Operating Revenues       |   |                    | 243,113 |   |   |   | 237,904 |   |

----

|                                                                        |   |   |    |   |   |   |    |   |
|-----------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|
| Less:                                                                       |   |   |    |   |   |   |    |   |
| Cost      of Sales                                                          |   | $      | 165,977 |   |   | $      | 162,917 |   |
| Conservation      Recoveries*                                               |   |   | 3,265   |   |   |   | 3,065   |   |
| RAC      Recoveries*                                                        |   |   | 1,209   |   |   |   | 695     |   |
|          Revenue Taxes                                       |   |   | 4,071   |   |   |   | 3,790   |   |
| Utility      Margin                                                         |   | $      | 68,591  |   |   | $      | 67,437  |   |
|                                                                        |   |   |    |   |   |   |    |   |
| Margin:                                                                     |   |   |    |   |   |   |    |   |
| Residential                                                                 |   | $      | 45,590  |   |   | $      | 40,982  |   |
| Commercial      and Industrial                                              |   |   | 15,429  |   |   |   | 14,318  |   |
| Cogeneration      and Electric Generation                                   |   |   | 340     |   |   |   | 289     |   |
| Interruptible                                                               |   |   | 46      |   |   |   | 65      |   |
| Off-system      & Capacity Release                                      |   |   | 702     |   |   |   | 1,081   |   |
| Other      Revenues                                                         |   |   | 270     |   |   |   | 220     |   |
|    Margin      Before Weather Normalization & Decoupling |   |   | 62,377  |   |   |   | 56,955  |   |
|          CIP Mechanism                                       |   |   | 6,214   |   |   |   | 10,482  |   |
| Utility      Margin                                                         |   | $      | 68,591  |   |   | $      | 67,437  |   |
|                                                                        |   |   |    |   |   |   |    |   |
|  Degree      Days:                                                     |   |   | 2,518   |   |   |   | 2,264   |   |
|                                                                        |   |   |    |   |   |   |    |   |

|                                            |   | Three      Months EndedMarch      31, |   |
|-------------------------------------------------|--------|---------------------------------------|--------|
|                                            |   | 2009                                  |   |   | 2008 |   |
| Net      Income Benefit:                   |   |                                  |   |   |   |   |
| CIP      – Weather Related                |   | $                                     | (0.6   |  ) |   | $ | 1.6 |   |
| CIP      – Usage Related                  |   |                                  | 4.3    |   |   |   | 4.6 |   |
| Total      Net Income Benefit                   |   | $                                     | 3.7    |   |   | $ | 6.2 |   |
|                                            |   |                                  |   |   |   |   |   |   |
|        Weather Compared to 20-Year Average |   | 3.7% colder                      |   |   | 6.8%      warmer |   |
|        Weather Compared to Prior Year      |   | 11.2%      colder                     |   |   | 6.4%      warmer |   |

----

|                        |   | Three      MonthsEnded      March 31, |   |
|-----------------------------|--------|---------------------------------------|--------|
|                        |   | 2009      vs. 2008                    |   |
|                        |   |                                  |   |
| Operations                  |   | $                                     | 2,235  |   |
| Maintenance                 |   |                                  | 304    |   |
| Depreciation                |   |                                  | 328    |   |
| Energy      and Other Taxes |   |                                  | 264    |   |

----

|                           |   | Total      Facility |    |   | Usage  |   |    | Available      Liquidity |   | Expiration      Date |
|--------------------------------|--------|---------------------|---------|--------|--------|--------|---------|--------------------------|--------|----------------------|
|                           |   |                |    |   |   |   |    |                     |   |                 |
| Revolving      Credit Facility |   | $                   | 100,000 |   |   | $      | 50,000  |                     |   | $                    | 50,000 |   | August      2011 |
| Line      of Credit            |   |                | 40,000  |   |   |   | — |                     |   |                 | 40,000 |   | December      2009 |
| Line      of Credit       |   |                | 10,000  |   |   |   | 10,000  |                     |   |                 | — |   | August      2009 |
| Uncommitted      Bank Line     |   |                | 53,000  |   |   |   | 21,575  |                     |   |                 | 31,425 |   | Various |
|                           |   |                |    |   |   |   |    |                     |   |                 |   |   |   |
| Total                          |   | $                   | 203,000 |   |   | $      | 81,575  |                     |   | $                    | 121,425 |   |   |
|                           |   |                |    |   |   |   |    |                     |   |                 |   |   |   |

----

|                 |   | As      ofMarch      31, 2009 |   |   | As      ofDecember      31, 2008 |   |
|----------------------|--------|-------------------------------|--------|--------|----------------------------------|--------|
|                 |   |                          |   |   |                             |   |
| Common Equity   |   |                          | 53.0   | %      |                             |   | 49.5 | % |
| Long-Term      Debt  |   |                          | 36.8   |   |                             |   | 36.4 |   |
| Short-Term      Debt |   |                          | 10.2   |   |                             |   | 14.1 |   |
|                 |   |                          |   |   |                             |   |   |   |
| Total                |   |                          | 100.0  | %      |                             |   | 100.0 | % |

| Twelve      MonthsEnded      Mar. 31, |   |   | Year      Ended December 31, |
|---------------------------------------|--------|--------|------------------------------|
|                                  |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |
| 2009                                  |   |   | 2008                         |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |   | 2004 |
|                                  |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |
|                                  | 4.6x   |   |                         |   | 4.3x |   |   |   | 4.1x |   |   |   | 3.8x |   |   |   | 4.0x |   |   |   | 3.9x |

----

| Assets                                                 |   |                     |   |   |                     |   |   |   |   |
|--------------------------------------------------------|--------|--------------------------|--------|--------|--------------------------|--------|--------|--------|--------|
| Source of Fair Value                                   |   | Maturity<      1 Year |   |   | Maturity1 -      3 Years |   |   | Total  |   |
|                                                   |   |                     |   |   |                     |   |   |   |   |
| Prices      Actively Quoted (NYMEX)                    |   | $                        | 61     |   |                     | $      | 40     |   |   | $ | 101 |   |
|                                                   |   |                     |   |   |                     |   |   |   |   |   |   |   |
| Prices      Provided by Other External Sources (Basis) |   |                     | 22     |   |                     |   | 0      |   |   |   | 22 |   |
|                                                   |   |                     |   |   |                     |   |   |   |   |   |   |   |
| Total                                                  |   | $                        | 83     |   |                     | $      | 40     |   |   | $ | 123 |   |

| Liabilities                                       |   |             |   |   |             |   |   |   |   |
|--------------------------------------------------------|--------|------------------|--------|--------|------------------|--------|--------|--------|--------|
|                                                   |   | Maturity         |   |   | Maturity         |   |   |   |   |
| Source      of Fair Value                              |   | <      1 Year |   |   | 1 -      3 Years |   |   | Total  |   |
|                                                   |   |             |   |   |             |   |   |   |   |
| Prices      Actively Quoted (NYMEX)                    |   | $                | 28,940 |   |             | $      | 2,691  |   |   | $ | 31,631 |   |
|                                                   |   |             |   |   |             |   |   |   |   |   |   |   |
| Prices      Provided by Other External Sources (Basis) |   |             | 25     |   |             |   | 0      |   |   |   | 25 |   |
|                                                   |   |             |   |   |             |   |   |   |   |   |   |   |
| Total                                                  |   | $                | 28,965 |   |             | $      | 2,691  |   |   | $ | 31,656 |   |

| Net      Derivatives — Energy Related Liability, January 1, 2009     |   |  $ | (28,970 | )      |
|----------------------------------------------------------------------------|--------|---------|---------|--------|
| Contracts      Settled During the Three Months ended March 31, 2009, Net   |   |    | 15,382  |   |
| Other      Changes in Fair Value from Continuing and New Contracts,    Net |   |    | (17,945 | )      |
| Net      Derivatives — Energy Related Liability, March 31, 2009      |   | $       | (31,533 | )      |

----

| Amount |       | FixedInterest      Rate |   | Start      Date |   | Maturity   |   | Type       |
|--------|------------|-------------------------|--------|-----------------|--------|------------|--------|------------|
| $      | 12,500,000 |                    |   | 3.430      %    |   | 12/01/2006 |   | 02/01/2036 |   | Tax-exempt |
| $      | 12,500,000 |                    |   | 3.430      %    |   | 12/01/2006 |   | 02/01/2036 |   | Tax-exempt |

----

| Exhibit      No. |  Description                                                                                                                                                                                                                                                       |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|             |                                                                                                                                                                                                                                                                    |
| 31.1             | Certification      of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Exchange      Act.                                                                                                                                                                      |
|             |                                                                                                                                                                                                                                                                    |
| 31.2             | Certification      of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Exchange      Act.                                                                                                                                                                      |
|             |                                                                                                                                                                                                                                                                    |
| 32.1             | Certification      of Chief Executive Officer Pursuant to Rule 13a-14(b) of the Exchange Act      as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002      (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United      States Code). |
|             |                                                                                                                                                                                                                                                                    |
| 32.2             | Certification      of Chief Financial Officer Pursuant to Rule 13a-14(b) of the Exchange Act      as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002      (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United      States Code). |

| Dated:      May 12, 2009 | By:      /s/ Edward J. Graham                                                            |
|--------------------------|------------------------------------------------------------------------------------------|
|                     |            Edward J. Graham                                     |
|                     |            President & Chief Executive Officer              |
|                     |                                                                                     |
|                     |                                                                                     |
|                     |                                                                                     |
| Dated:      May 12, 2009 | By:      /s/ David A. Kindlick                                                           |
|                     |            David A. Kindlick                                    |
|                     |            Senior Vice President & Chief Financial  Officer |

----