----

----

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

| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|------------------------------------------------------------------------------------------|

| New Jersey               | 22-1901645                        |
|--------------------------|-----------------------------------|
| (State of incorporation) | (IRS employer identification no.) |

| Common Stock                |                                   |
|-----------------------------|----------------------------------------|
| ($1.25 par value per share) | New York Stock Exchange                |
| (Title of each class)       | (Name of exchange on which registered) |

| Large accelerated filer   x                                                              |   | Accelerated filer                      o |
|---------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| Non-accelerated filer     o (Do not check if a smaller reporting company) |   | Smaller reporting company    o                                                                                                |

----

----

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TABLE OF CONTENTS

|       |                                                                                        | PageNo. |
|------------|---------------------------------------------------------------------------------------------|---------|
|       |                                                                                        |    |
| PART I     | FINANCIAL INFORMATION                                                                       |    |   |
|       |                                                                                        |    |   |
| Item 1.    | Financial Statements                                                                        |    | 3 |
| Item 2.    | Management’s Discussion and Analysis of Financial Condition and Results of Operations |    | 21 |
| Item 3.    | Quantitative and Qualitative Disclosures About Market Risk                                  |    | 30 |
| Item 4.    | Controls and Procedures                                                                     |    | 32 |
|       |                                                                                        |    |   |
| PART II    | OTHER INFORMATION                                                                           |    |   |
|       |                                                                                        |    |   |
| Item 1.    | Legal Proceedings                                                                           |    | 32 |
| Item 1A.   | Risk Factors                                                                                |    | 32 |
| Item 2.    | Unregistered Sales of Equity Securities and Use of Proceeds                                 |    | 33 |
| Item 6.    | Exhibits                                                                                    |    | 33 |
|       |                                                                                        |    |   |
| Signatures |                                                                                        | 33      |

----

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

|                                                                                                        |   |               |    |   |   |   |
|-------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|--------|--------|--------|
|                                                                                                        |   | Three Months Ended |    |
|                                                                                                        |   | March 31,          |    |
|                                                                                                        |   | 2010               |    |   | 2009   |   |
|                                                                                                        |   |               |    |   |   |   |
| Operating Revenues:                                                                                         |   |               |    |   |   |   |
| Utility                                                                                                     |   | $                  | 196,057 |   |   | $      | 240,109 |   |
| Nonutility                                                                                                  |   |               | 133,226 |   |   |   | 122,067 |   |
|                                                                                                        |   |               |    |   |   |   |   |   |
| Total Operating Revenues                                                                                    |   |               | 329,283 |   |   |   | 362,176 |   |
|                                                                                                        |   |               |    |   |   |   |   |   |
| Operating Expenses:                                                                                         |   |               |    |   |   |   |   |   |
|   Cost of Sales - (Excluding depreciation)                                                        |   |               |    |   |   |   |   |   |
| - Utility                                                                                                   |   |               | 116,216 |   |   |   | 162,973 |   |
| - Nonutility                                                                                                |   |               | 115,028 |   |   |   | 102,535 |   |
| Operations                                                                                                  |   |               | 23,480  |   |   |   | 22,913 |   |
| Maintenance                                                                                                 |   |               | 2,816   |   |   |   | 2,155 |   |
| Depreciation                                                                                                |   |               | 8,242   |   |   |   | 7,660 |   |
| Energy and Other Taxes                                                                                      |   |               | 4,872   |   |   |   | 5,167 |   |
|                                                                                                        |   |               |    |   |   |   |   |   |
|       Total Operating Expenses                                                |   |               | 270,654 |   |   |   | 303,403 |   |
|                                                                                                        |   |               |    |   |   |   |   |   |
| Operating Income                                                                                            |   |               | 58,629  |   |   |   | 58,773 |   |
|                                                                                                        |   |               |    |   |   |   |   |   |
| Other Income and Expense                                                                                    |   |               | 1,024   |   |   |   | 461 |   |
|                                                                                                        |   |               |    |   |   |   |   |   |
| Interest Charges                                                                                            |   |               | (4,966  | )      |   |   | (4,893 | ) |
|                                                                                                        |   |               |    |   |   |   |   |   |
| Income Before Income Taxes                                                                                  |   |               | 54,687  |   |   |   | 54,341 |   |
|                                                                                                        |   |               |    |   |   |   |   |   |
| Income Taxes                                                                                                |   |               | (21,971 | )      |   |   | (20,218 | ) |
|                                                                                                        |   |               |    |   |   |   |   |   |
| Equity in Loss of Affiliated Companies                                                                      |   |               | (1,148  | )      |   |   | (2,435 | ) |
|                                                                                                        |   |               |    |   |   |   |   |   |
| Income from Continuing Operations                                                                           |   |               | 31,568  |   |   |   | 31,688 |   |
|                                                                                                        |   |               |    |   |   |   |   |   |
| Loss from Discontinued Operations - (Net of tax benefit)                                                    |   |               | (29     | )      |   |   | (19 | ) |
|                                                                                                        |   |               |    |   |   |   |   |   |
|       Net Income                                                              |   |               | 31,539  |   |   |   | 31,669 |   |
|                                                                                                        |   |               |    |   |   |   |   |   |
| Less: Net Income Attributable to Noncontrolling Interest in Subsidiaries                                    |   |               | — |   |   |   | (66 | ) |
|                                                                                                        |   |               |    |   |   |   |   |   |
|       Net Income - Attributable to South Jersey Industries, Inc. Shareholders |   | $                  | 31,539  |   |   | $      | 31,603 |   |
|                                                                                                        |   |               |    |   |   |   |   |   |
| Amounts Attributable to South Jersey Industries, Inc. Shareholders                                          |   |               |    |   |   |   |   |   |
| Income from Continuing Operations                                                                           |   | $                  | 31,568  |   |   | $      | 31,622 |   |
| Loss from Discontinued Operations - (Net of tax benefit)                                                    |   |               | (29     | )      |   |   | (19 | ) |
|                                                                                                        |   |               |    |   |   |   |   |   |
|       Net Income - Attributable to South Jersey Industries, Inc. Shareholders |   | $                  | 31,539  |   |   | $      | 31,603 |   |
|                                                                                                        |   |               |    |   |   |   |   |   |
| Basic Earnings Per Common Share Attributable to South Jersey Industries, Inc. Shareholders:                 |   |
| Continuing Operations                                                                                       |   | $                  | 1.058   |   |   | $      | 1.063 |   |
| Discontinued Operations                                                                                     |   |               | (0.001  | )      |   |   | (0.001 | ) |
|                                                                                                        |   |               |    |   |   |   |   |   |
|       Basic Earnings Per Common Share                                         |   | $                  | 1.057   |   |   | $      | 1.062 |   |
|                                                                                                        |   |               |    |   |   |   |   |   |
| Average Shares of Common Stock Outstanding - Basic                                                          |   |               | 29,826  |   |   |   | 29,752 |   |
|                                                                                                        |   |               |    |   |   |   |   |   |
| Diluted Earnings Per Common Share Attributable to South Jersey Industries, Inc. Shareholders:               |   |
| Continuing Operations                                                                                       |   | $                  | 1.055   |   |   | $      | 1.059 |   |
| Discontinued Operations                                                                                     |   |               | (0.001  | )      |   |   | (0.000 | ) |
|                                                                                                        |   |               |    |   |   |   |   |   |
|       Diluted Earnings Per Common Share                                       |   | $                  | 1.054   |   |   | $      | 1.059 |   |
|                                                                                                        |   |               |    |   |   |   |   |   |
| Average Shares of Common Stock Outstanding - Diluted                                                        |   |               | 29,913  |   |   |   | 29,851 |   |
|                                                                                                        |   |               |    |   |   |   |   |   |
| Dividends Declared per Common Share                                                                         |   | $                  | 0.330   |   |   | $      | 0.298 |   |

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Table of Contents

|                                                                               |   |               |    |   |   |   |
|------------------------------------------------------------------------------------|--------|--------------------|---------|--------|--------|--------|
|                                                                               |   | Three Months Ended |    |
|                                                                               |   | March 31,          |    |
|                                                                               |   | 2010               |    |   | 2009   |   |
|                                                                               |   |               |    |   |   |   |
| Net Income                                                                         |   | $                  | 31,539  |   |   | $      | 31,669 |   |
|                                                                               |   |               |    |   |   |   |   |   |
| Other Comprehensive Income, Net of Tax:*                                           |   |               |    |   |   |   |   |   |
|                                                                               |   |               |    |   |   |   |   |   |
| Unrealized Gain (Loss) on Available-for-Sale Securities                            |   |               | 144     |   |   |   | (170 | ) |
| Unrealized Gain on Derivatives - Other                                             |   |               | 97      |   |   |   | 373 |   |
| Other Comprehensive (Loss) Income of Affiliated Companies                          |   |               | (19     | )      |   |   | 1,323 |   |
|                                                                               |   |               |    |   |   |   |   |   |
| Other Comprehensive Income  - Net of Tax*                                |   |               | 222     |   |   |   | 1,526 |   |
|                                                                               |   |               |    |   |   |   |   |   |
| Comprehensive Income                                                               |   |               | 31,761  |   |   |   | 33,195 |   |
|                                                                               |   |               |    |   |   |   |   |   |
| Less: Comprehensive Income Attributable to Noncontrolling Interest in Subsidiaries |   |               | — |   |   |   | (66 | ) |
|                                                                               |   |               |    |   |   |   |   |   |
| Comprehensive Income Attributable to South Jersey Industries, Inc.                 |   | $                  | 31,761  |   |   | $      | 33,129 |   |

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Table of Contents

|                                                     |   |               |    |
|----------------------------------------------------------|--------|--------------------|---------|
|                                                     |   | Three Months Ended |    |
|                                                     |   | March 31,          |    |
|                                                     |   | 2010               |    |   | 2009 |   |
|                                                     |   |               |    |   |   |   |
| Net Cash Provided by Operating Activities                |   | $                  | 117,838 |   |   | $ | 119,845 |   |
|                                                     |   |               |    |   |   |   |   |   |
| Cash Flows from Investing Activities:                    |   |               |    |   |   |   |   |   |
| Capital Expenditures                                     |   |               | (38,546 | ) |   |   | (17,115 | ) |
| Net Purchase of Restricted Investments in Margin Account |   |               | (24,022 | ) |   |   | (3,572 | ) |
| Investment in Long-Term Receivables                      |   |               | (910    | ) |   |   | (2,044 | ) |
| Proceeds from Long-Term Receivables                      |   |               | 609     |   |   |   | 2,869 |   |
| Investment in Affiliate                                  |   |               | (1,200  | ) |   |   | (1,781 | ) |
| Advances on Notes Receivable - Affiliate                 |   |               | (3,098  | ) |   |   | (650 | ) |
| Repayment of Notes Receivable - Affiliate                |   |               | 177     |   |   |   | 1,100 |   |
| Net Advances on Lines of Credit - Affiliate              |   |               | (2,019  | ) |   |   | — |   |
| Other                                                    |   |               | — |   |   |   | 175 |   |
|                                                     |   |               |    |   |   |   |   |   |
| Net Cash Used in Investing Activities                    |   |               | (69,009 | ) |   |   | (21,018 | ) |
|                                                     |   |               |    |   |   |   |   |   |
| Cash Flows from Financing Activities:                    |   |               |    |   |   |   |   |   |
| Net Repayments of Lines of Credit                        |   |               | (62,600 | ) |   |   | (97,875 | ) |
| Proceeds from Issuance of Long-Term Debt                 |   |               | 15,000  |   |   |   | — |   |
| Payments for Issuance of Long-Term Debt                  |   |               | (559    | ) |   |   | — |   |
| Other                                                    |   |               | — |   |   |   | (37 | ) |
|                                                     |   |               |    |   |   |   |   |   |
| Net Cash Used in Financing Activities                    |   |               | (48,159 | ) |   |   | (97,912 | ) |
|                                                     |   |               |    |   |   |   |   |   |
| Net Increase in Cash and Cash Equivalents                |   |               | 670     |   |   |   | 915 |   |
| Cash and Cash Equivalents at Beginning of Period         |   |               | 3,823   |   |   |   | 5,775 |   |
|                                                     |   |               |    |   |   |   |   |   |
| Cash and Cash Equivalents at End of Period               |   | $                  | 4,493   |   |   | $ | 6,690 |   |

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Table of Contents

|                                         |   |      |      |   |         |   |
|----------------------------------------------|--------|-----------|-----------|--------|--------------|--------|
|                                         |   | March 31, |      |   | December 31, |   |
|                                         |   | 2010      |      |   | 2009         |   |
|                                         |   |      |      |   |         |   |
| Assets                                       |   |      |      |   |         |   |
|                                         |   |      |      |   |         |   |
| Property, Plant and Equipment:               |   |      |      |   |         |   |
| Utility Plant, at original cost              |   | $         | 1,306,746 |   |         | $      | 1,275,792 |   |
| Accumulated Depreciation                     |   |      | (320,781  | )      |         |   | (314,627 | ) |
| Nonutility Property and Equipment, at cost   |   |      | 116,939   |   |         |   | 132,119 |   |
| Accumulated Depreciation                     |   |      | (19,842   | )      |         |   | (20,212 | ) |
|                                         |   |      |      |   |         |   |   |   |
| Property, Plant and Equipment - Net          |   |      | 1,083,062 |   |         |   | 1,073,072 |   |
|                                         |   |      |      |   |         |   |   |   |
| Investments:                                 |   |      |      |   |         |   |   |   |
| Available-for-Sale Securities                |   |      | 6,212     |   |         |   | 5,958 |   |
| Restricted                                   |   |      | 29,237    |   |         |   | 5,215 |   |
| Investment in Affiliates                     |   |      | 1,777     |   |         |   | 2,483 |   |
|                                         |   |      |      |   |         |   |   |   |
| Total Investments                            |   |      | 37,226    |   |         |   | 13,656 |   |
|                                         |   |      |      |   |         |   |   |   |
| Current Assets:                              |   |      |      |   |         |   |   |   |
| Cash and Cash Equivalents                    |   |      | 4,493     |   |         |   | 3,823 |   |
| Accounts Receivable                          |   |      | 230,645   |   |         |   | 141,109 |   |
| Unbilled Revenues                            |   |      | 34,647    |   |         |   | 58,598 |   |
| Provision for Uncollectibles                 |   |      | (6,293    | )      |         |   | (6,268 | ) |
| Notes Receivable - Affiliate                 |   |      | 2,865     |   |         |   | 502 |   |
| Natural Gas in Storage, average cost         |   |      | 60,219    |   |         |   | 99,697 |   |
| Materials and Supplies, average cost         |   |      | 4,311     |   |         |   | 6,877 |   |
| Prepaid Taxes                                |   |      | 5         |   |         |   | 20,093 |   |
| Derivatives - Energy Related Assets          |   |      | 42,858    |   |         |   | 36,512 |   |
| Other Prepayments and Current Assets         |   |      | 8,053     |   |         |   | 7,412 |   |
|                                         |   |      |      |   |         |   |   |   |
| Total Current Assets                         |   |      | 381,803   |   |         |   | 368,355 |   |
|                                         |   |      |      |   |         |   |   |   |
| Regulatory and Other Noncurrent Assets:      |   |      |      |   |         |   |   |   |
| Regulatory Assets                            |   |      | 231,355   |   |         |   | 240,462 |   |
| Derivatives - Energy Related Assets          |   |      | 14,210    |   |         |   | 11,585 |   |
| Unamortized Debt Issuance Costs              |   |      | 7,168     |   |         |   | 6,788 |   |
| Notes Receivables-Affiliates                 |   |      | 44,385    |   |         |   | 30,838 |   |
| Contract Receivables                         |   |      | 13,083    |   |         |   | 13,544 |   |
| Other                                        |   |      | 22,371    |   |         |   | 23,708 |   |
|                                         |   |      |      |   |         |   |   |   |
| Total Regulatory and Other Noncurrent Assets |   |      | 332,572   |   |         |   | 326,925 |   |
|                                         |   |      |      |   |         |   |   |   |
| Total Assets                                 |   | $         | 1,834,663 |   |         | $      | 1,782,008 |   |

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Table of Contents

|                                                           |   |      |      |   |         |   |      |   |
|----------------------------------------------------------------|--------|-----------|-----------|--------|--------------|--------|-----------|--------|
|                                                           |   | March 31, |      |   | December 31, |   |
|                                                           |   | 2010      |      |   | 2009         |   |
|                                                           |   |      |      |   |         |   |      |   |
| Capitalization and Liabilities                                 |   |      |      |   |         |   |      |   |
|                                                           |   |      |      |   |         |   |      |   |
| Equity:                                                        |   |      |      |   |         |   |      |   |
| Common Stock                                                   |   | $         | 37,341    |   |         | $      | 37,245    |   |
| Premium on Common Stock                                        |   |      | 254,958   |   |         |   | 254,503   |   |
| Treasury Stock (at par)                                        |   |      | (183      | )      |         |   | (183      | )      |
| Accumulated Other Comprehensive Loss                           |   |      | (19,247   | )      |         |   | (19,469   | )      |
| Retained Earnings                                              |   |      | 293,185   |   |         |   | 271,505   |   |
|                                                           |   |      |      |   |         |   |      |   |
| Total South Jersey Industries, Inc. Shareholders’ Equity |   |      | 566,054   |   |         |   | 543,601   |   |
|                                                           |   |      |      |   |         |   |      |   |
| Noncontrolling Interest in Subsidiaries                        |   |      | —   |   |         |   | 963       |   |
|                                                           |   |      |      |   |         |   |      |   |
| Total Equity                                                   |   |      | 566,054   |   |         |   | 544,564   |   |
|                                                           |   |      |      |   |         |   |      |   |
| Long-Term Debt                                                 |   |      | 326,400   |   |         |   | 312,793   |   |
|                                                           |   |      |      |   |         |   |      |   |
| Total Capitalization                                           |   |      | 892,454   |   |         |   | 857,357   |   |
|                                                           |   |      |      |   |         |   |      |   |
| Current Liabilities:                                           |   |      |      |   |         |   |      |   |
| Notes Payable                                                  |   |      | 134,000   |   |         |   | 196,600   |   |
| Current Portion of Long-Term Debt                              |   |      | 35,000    |   |         |   | 35,119    |   |
| Accounts Payable                                               |   |      | 146,587   |   |         |   | 123,921   |   |
| Customer Deposits and Credit Balances                          |   |      | 15,690    |   |         |   | 14,128    |   |
| Environmental Remediation Costs                                |   |      | 26,220    |   |         |   | 23,639    |   |
| Taxes Accrued                                                  |   |      | 34,811    |   |         |   | 6,518     |   |
| Derivatives - Energy Related Liabilities                       |   |      | 59,411    |   |         |   | 28,260    |   |
| Deferred Income Taxes - Net                                    |   |      | 6,195     |   |         |   | 19,897    |   |
| Deferred Contract Revenues                                     |   |      | 5,003     |   |         |   | 6,081     |   |
| Dividends Payable                                              |   |      | 9,858     |   |         |   | —   |   |
| Interest Accrued                                               |   |      | 4,681     |   |         |   | 6,211     |   |
| Pension and Other Postretirement Benefits                      |   |      | 1,109     |   |         |   | 1,109     |   |
| Other Current Liabilities                                      |   |      | 11,866    |   |         |   | 17,301    |   |
|                                                           |   |      |      |   |         |   |      |   |
| Total Current Liabilities                                      |   |      | 490,431   |   |         |   | 478,784   |   |
|                                                           |   |      |      |   |         |   |      |   |
| Deferred Credits and Other Noncurrent Liabilities:             |   |      |      |   |         |   |      |   |
| Deferred Income Taxes - Net                                    |   |      | 219,246   |   |         |   | 215,346   |   |
| Investment Tax Credits                                         |   |      | 1,440     |   |         |   | 1,518     |   |
| Pension and Other Postretirement Benefits                      |   |      | 71,058    |   |         |   | 69,141    |   |
| Environmental Remediation Costs                                |   |      | 46,607    |   |         |   | 49,803    |   |
| Asset Retirement Obligations                                   |   |      | 23,154    |   |         |   | 23,229    |   |
| Derivatives - Energy Related Liabilities                       |   |      | 11,447    |   |         |   | 10,931    |   |
| Derivatives - Other                                            |   |      | 6,000     |   |         |   | 5,823     |   |
| Regulatory Liabilities                                         |   |      | 54,824    |   |         |   | 50,193    |   |
| Other                                                          |   |      | 18,002    |   |         |   | 19,883    |   |
|                                                           |   |      |      |   |         |   |      |   |
| Total Deferred Credits and Other Noncurrent Liabilities        |   |      | 451,778   |   |         |   | 445,867   |   |
|                                                           |   |      |      |   |         |   |      |   |
| Commitments and Contingencies  (Note 12)             |   |      |      |   |         |   |      |   |
|                                                           |   |      |      |   |         |   |      |   |
| Total Capitalization and Liabilities                           |   | $         | 1,834,663 |   |         | $      | 1,782,008 |   |

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Table of Contents

| 1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: |
|----|---------------------------------------------|

|   | ■ | South Jersey Gas Company (SJG) is a regulated natural gas utility. SJG distributes natural gas in the seven southernmost counties of New Jersey. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ■ | South Jersey Resources Group, LLC (SJRG) markets wholesale natural gas storage, commodity and transportation in the mid-Atlantic and southern states. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ■ | Marina Energy, LLC (Marina) develops and operates on-site energy-related projects. |
|--------|---------|------------------------------------------------------------------------------------|

|   | ■ | South Jersey Energy Company (SJE) acquires and markets natural gas and electricity to retail end users and provides total energy management services to commercial and industrial customers. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ■ | South Jersey Energy Service Plus, LLC (SJESP) installs residential and small commercial HVAC systems, provides plumbing services and services appliances via the sale of  appliance service programs. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

| 2. | STOCK-BASED COMPENSATION PLAN: |
|----|--------------------------------|

|                           |   | Grant Date |   | SharesOutstanding |   | Fair ValuePer Share |   |   | ExpectedVolatility |    |    | Risk-FreeInterest Rate |    |
|--------------------------------|--------|------------|--------|-------------------|--------|---------------------|--------|--------|--------------------|---------|---------|------------------------|---------|
|                           |   |       |   |              |   |                |   |   |               |    |    |                   |    |   |
| Officers & Key Employees - |   | Jan. 2008  |   | 42,144            |   | $                   | 34.030 |   |               | 21.7    | %  |                   | 2.90    | %  |
|                           |   | Jan. 2009  |   | 37,748            |   | $                   | 39.350 |   |               | 28.6    | %  |                   | 1.20    | %  |
|                           |   | Jan. 2010  |   | 52,940            |   | $                   | 39.020 |   |               | 29.0    | %  |                   | 1.65    | %  |
|                           |   |       |   |              |   |                |   |   |               |    |    |                   |    |   |
| Directors -                    |   | Jan. 2008  |   | 7,704             |   | $                   | 36.355 |   |               | — |    |                   | — |   |
|                           |   | Jan. 2009  |   | 8,690             |   | $                   | 40.265 |   |               | — |    |                   | — |   |
|                           |   | Jan. 2010  |   | 16,700            |   | $                   | 37.825 |   |               | — |    |                   | — |   |

|                         |   | Three Months EndedMarch 31, |   |
|------------------------------|--------|-----------------------------|--------|
|                         |   | 2010                        |   |   | 2009 |   |
|                         |   |                        |   |   |   |   |
| Officers & Key Employees |   | $                           | 407    |   |   | $ | 335 |   |
| Directors                    |   |                        | 111    |   |   |   | 82 |   |
| Total Cost                   |   |                        | 518    |   |   |   | 417 |   |
|                         |   |                        |   |   |   |   |   |   |
| Capitalized                  |   |                        | (51    | ) |   |   | (43 | ) |
| Net Expense                  |   | $                           | 467    |   |   | $ | 374 |   |

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|                                          |   |                            |    |   |      |   |    |                      |   |
|-----------------------------------------------|--------|---------------------------------|---------|--------|-----------|--------|---------|---------------------------|--------|
|                                          |   | Officers &OtherKeyEmployees |    |   | Directors |   |    | WeightedAverageFair Value |   |
|                                          |   |                            |    |   |      |   |    |                      |   |
| Nonvested Shares Outstanding, January 1, 2010 |   |                            | 80,281  |   |      |   | 16,394  |                      |   | $ | 36.874 |   |
| Granted                                       |   |                            | 52,940  |   |      |   | 16,700  |                      |   | $ | 38.733 |   |
| Forfeited                                     |   |                            | (389    | )      |      |   | — |                      |   | $ | 39.350 |   |
| Nonvested Shares Outstanding, March 31, 2010  |   |                            | 132,832 |   |      |   | 33,094  |                      |   | $ | 37.649 |   |

| 3. | DISCONTINUED OPERATIONS: |
|----|--------------------------|

|                                                                |   | Three Months EndedMarch 31, |   |
|---------------------------------------------------------------------|--------|-----------------------------|--------|
|                                                                |   | 2010                        |   |   | 2009 |   |
| Loss before Income Taxes:                                           |   |                        |   |   |   |   |
| Sand Mining                                                         |   | $                           | (42    | ) |   | $ | (27 | ) |
| Fuel Oil                                                            |   |                        | (3     | ) |   |   | (2 | ) |
| Income Tax Benefits                                                 |   |                        | 16     |   |   |   | 10 |   |
| Loss from Discontinued Operations — Net                       |   | $                           | (29    | ) |   | $ | (19 | ) |
| Earnings Per Common Share from Discontinued Operations — Net: |   |                        |   |   |   |   |   |   |
| Basic                                                               |   | $                           | (0.001 | ) |   | $ | (0.001 | ) |
| Diluted                                                             |   | $                           | (0.001 | ) |   | $ | (0.000 | ) |

| 4. | COMMON STOCK: |
|----|---------------|

|                          |   | 2010   |       |
|-------------------------------|--------|--------|------------|
| Beginning Balance, January 1  |   |   | 29,796,232 |   |
| New Issues During Period:     |   |   |       |   |
| Stock-Based Compensation Plan |   |   | 76,593     |   |
| Ending Balance, March 31      |   |   | 29,872,825 |   |

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| 5. | FINANCIAL INSTRUMENTS: |
|----|------------------------|

| 6. | SEGMENTS OF BUSINESS: |
|----|-----------------------|

----

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|                                     |   | Three Months EndedMarch 31, |    |
|------------------------------------------|--------|-----------------------------|---------|
|                                     |   | 2010                        |    |   | 2009 |   |
| Operating Revenues:                      |   |                        |    |   |   |   |
| Gas Utility Operations                   |   | $                           | 196,716 |   |   | $ | 243,113 |   |
| Wholesale Gas Operations                 |   |                        | 54,441  |   |   |   | 63,868 |   |
| Retail Gas and Other Operations          |   |                        | 35,834  |   |   |   | 38,040 |   |
| Retail Electric Operations               |   |                        | 31,950  |   |   |   | 8,268 |   |
| On-Site Energy Production                |   |                        | 9,350   |   |   |   | 10,013 |   |
| Appliance Service Operations             |   |                        | 4,712   |   |   |   | 5,003 |   |
| Corporate & Services                 |   |                        | 5,403   |   |   |   | 4,900 |   |
| Subtotal                                 |   |                        | 338,406 |   |   |   | 373,205 |   |
| Intersegment Sales                       |   |                        | (9,123  | ) |   |   | (11,029 | ) |
| Total Operating Revenues                 |   | $                           | 329,283 |   |   | $ | 362,176 |   |
|                                     |   |                        |    |   |   |   |   |   |
| Operating Income:                        |   |                        |    |   |   |   |   |   |
| Gas Utility Operations                   |   | $                           | 47,791  |   |   | $ | 46,367 |   |
| Wholesale Gas Operations                 |   |                        | 20,294  |   |   |   | 10,400 |   |
| Retail Gas and Other Operations          |   |                        | 706     |   |   |   | 661 |   |
| Retail Electric Operations               |   |                        | (11,803 | ) |   |   | (1,620 | ) |
| On-Site Energy Production                |   |                        | 1,110   |   |   |   | 2,059 |   |
| Appliance Service Operations             |   |                        | 262     |   |   |   | 704 |   |
| Corporate and Services                   |   |                        | 269     |   |   |   | 202 |   |
| Total Operating  Income        |   | $                           | 58,629  |   |   | $ | 58,773 |   |
|                                     |   |                        |    |   |   |   |   |   |
| Depreciation and Amortization:           |   |                        |    |   |   |   |   |   |
| Gas Utility Operations                   |   | $                           | 9,485   |   |   | $ | 8,453 |   |
| Wholesale Gas Operations                 |   |                        | 72      |   |   |   | (87 | ) |
| Retail Gas and Other Operations          |   |                        | 9       |   |   |   | 5 |   |
| Appliance Services Operations            |   |                        | 89      |   |   |   | 71 |   |
| On-Site Energy Production                |   |                        | 977     |   |   |   | 883 |   |
| Corporate and Services                   |   |                        | 130     |   |   |   | 118 |   |
| Total Depreciation and Amortization |   | $                           | 10,762  |   |   | $ | 9,443 |   |
|                                     |   |                        |    |   |   |   |   |   |
| Interest Charges:                        |   |                        |    |   |   |   |   |   |
| Gas Utility Operations                   |   | $                           | 4,015   |   |   | $ | 4,097 |   |
| Wholesale Gas Operations                 |   |                        | 12      |   |   |   | 200 |   |
| Retail Gas and Other Operations          |   |                        | 22      |   |   |   | — |   |
| On-Site Energy Production                |   |                        | 1,000   |   |   |   | 525 |   |
| Corporate and Services                   |   |                        | 57      |   |   |   | 262 |   |
| Subtotal                                 |   |                        | 5,106   |   |   |   | 5,084 |   |
| Intersegment Borrowings                  |   |                        | (140    | ) |   |   | (191 | ) |
| Total Interest Charges                   |   | $                           | 4,966   |   |   | $ | 4,893 |   |
|                                     |   |                        |    |   |   |   |   |   |
| Income Taxes:                            |   |                        |    |   |   |   |   |   |
| Gas Utility Operations                   |   | $                           | 18,139  |   |   | $ | 17,615 |   |
| Wholesale Gas Operations                 |   |                        | 8,477   |   |   |   | 4,323 |   |
| Retail Gas and Other Operations          |   |                        | 370     |   |   |   | 278 |   |
| Retail Electric Operations               |   |                        | (4,849  | ) |   |   | (666 | )  |
| On-Site Energy Production                |   |                        | (540    | ) |   |   | (1,765 | )  |
| Appliance Service Operations             |   |                        | 114     |   |   |   | 296 |   |
| Corporate and Services                   |   |                        | 260     |   |   |   | 137 |   |
| Total Income Taxes                       |   | $                           | 21,971  |   |   | $ | 20,218 |   |

|                            |   |   |   |   |   |   |   |   |
|---------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| Property Additions:             |   |   |   |   |   |   |   |   |
| Gas Utility Operations          |   | $      | 31,731 |   |   | $      | 14,822 |   |
| Wholesale Gas Operations        |   |   | 6      |   |   |   | 3      |   |
| Retail Gas and Other Operations |   |   | 8      |   |   |   | 5      |   |
| Appliance Service Operations    |   |   | 11     |   |   |   | 325    |   |
| On-Site Energy Production       |   |   | 235    |   |   |   | 1,264  |   |
| Corporate and Services          |   |   | 205    |   |   |   | 61     |   |
| Total Property Additions        |   | $      | 32,196 |   |   | $      | 16,480 |   |

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|                            |   | March 31, 2010 |      |   | December 31,2009 |   |
|---------------------------------|--------|--------------------------|-----------|--------|------------------|--------|
| Identifiable Assets:            |   |                     |      |   |             |   |
| Gas Utility Operations          |   | $                        | 1,383,202 |   |             | $      | 1,357,062 |   |
| Wholesale Gas Operations        |   |                     | 231,555   |   |             |   | 194,989 |   |
| Retail Gas and Other Operations |   |                     | 26,512    |   |             |   | 35,506 |   |
| Retail Electric Operations      |   |                     | 26,662    |   |             |   | 13,433 |   |
| On-Site Energy Production       |   |                     | 129,568   |   |             |   | 135,288 |   |
| Appliance Service Operations    |   |                     | 17,633    |   |             |   | 18,832 |   |
| Discontinued Operations         |   |                     | 980       |   |             |   | 1,215 |   |
| Corporate and Services          |   |                     | 40,013    |   |             |   | 56,543 |   |
| Subtotal                        |   |                     | 1,856,125 |   |             |   | 1,812,868 |   |
| Intersegment Assets             |   |                     | (21,462   | )      |             |   | (30,860 | ) |
| Total Identifiable Assets       |   | $                        | 1,834,663 |   |             | $      | 1,782,008 |   |

| 7. | RATES AND REGULATORY ACTIONS: |
|----|-------------------------------|

| 8. | REGULATORY ASSETS & REGULATORY LIABILITIES: |
|----|-------------------------------------------------|

|                                                    |   | March 31,2010 |    |   | December 31,2009 |   |
|---------------------------------------------------------|--------|---------------|---------|--------|-----------------------|--------|
| Environmental Remediation Costs:                        |   |          |    |   |                  |   |
| Expended - Net                                          |   | $             | 40,788  |   |                  | $      | 42,924 |   |
| Liability for Future Expenditures                       |   |          | 68,521  |   |                  |   | 69,056 |   |
| Income Taxes-Flowthrough Depreciation                   |   |          | 1,507   |   |                  |   | 1,752 |   |
| Deferred Asset Retirement Obligation Costs              |   |          | 22,562  |   |                  |   | 22,438 |   |
| Deferred Gas Costs - Net                                |   |          | 567     |   |                  |   | 6,519 |   |
| Deferred Pension and Other Postretirement Benefit Costs |   |          | 71,098  |   |                  |   | 71,192 |   |
| Conservation Incentive Program Receivable               |   |          | 15,378  |   |                  |   | 16,672 |   |
| Societal Benefit Costs Receivable                       |   |          | 2,082   |   |                  |   | 1,872 |   |
| Premium for Early Retirement of Debt                    |   |          | 1,005   |   |                  |   | 1,046 |   |
| Other Regulatory Assets                                 |   |          | 7,847   |   |                  |   | 6,991 |   |
|                                                    |   |          |    |   |                  |   |   |   |
| Total Regulatory Assets                                 |   | $             | 231,355 |   |                  | $      | 240,462 |   |

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|                         |   | March 31, 2010 |   |   | December 31,2009 |   |
|------------------------------|--------|---------------------|--------|--------|------------------|--------|
| Excess Plant Removal Costs   |   | $                   | 48,731 |   |             | $      | 48,715 |   |
| Other Regulatory Liabilities |   |                | 6,093  |   |             |   | 1,478 |   |
|                         |   |                |   |   |             |   |   |   |
| Total Regulatory Liabilities |   | $                   | 54,824 |   |             | $      | 50,193 |   |

| 9. | PENSION AND OTHER POSTRETIREMENT BENEFITS: |
|----|--------------------------------------------|

|                               |   |                                        |   |   |                                                     |   |   |   |   |   |   |    |
|------------------------------------|--------|---------------------------------------------|--------|--------|----------------------------------------------------------|--------|--------|--------|--------|--------|--------|---------|
|                               |   | Pension BenefitsThree Months EndedMarch 31, |   |   | Other Postretirement BenefitsThree Months EndedMarch 31, |   |
|                               |   | 2010                                        |   |   | 2009                                                     |   |   | 2010   |   |   | 2009   |    |
| Service Cost                       |   | $                                           | 859    |   |                                                     | $      | 878    |   |   | $      | 239    |    |   | $ | 268 |   |
| Interest Cost                      |   |                                        | 2,261  |   |                                                     |   | 2,165  |   |   |   | 821    |    |   |   | 763 |   |
| Expected Return on Plan Assets     |   |                                        | (1,943 | )      |                                                     |   | (1,913 | )      |   |   | (405   | )       |   |   | (388 | ) |
| Amortizations:                     |   |                                        |   |   |                                                     |   |   |   |   |   |   |    |   |   |   |   |
| Prior Service Cost (Credits)       |   |                                        | 62     |   |                                                     |   | 70     |   |   |   | (88    | )  |   |   | (88 | )  |
| Actuarial Loss                     |   |                                        | 1,376  |   |                                                     |   | 1,367  |   |   |   | 456    |    |   |   | 453 |   |
| Net Periodic Benefit Cost          |   |                                        | 2,615  |   |                                                     |   | 2,567  |   |   |   | 1,023  |    |   |   | 1,008 |   |
| Capitalized Benefit Costs          |   |                                        | (988   | )      |                                                     |   | (992   | )      |   |   | (419   | )       |   |   | (388 | ) |
| Total Net Periodic Benefit Expense |   | $                                           | 1,627  |   |                                                     | $      | 1,575  |   |   | $      | 604    |    |   | $ | 620 |   |

| 10. | RETAINED EARNINGS: |
|-----|--------------------|

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| 11. | UNUSED LINES OF CREDIT: |
|-----|-------------------------|

| Company                   |   | TotalFacility |    |   | Usage  |   |    | AvailableLiquidity |   | Expiration Date |
|---------------------------|--------|---------------|---------|--------|--------|--------|---------|--------------------|--------|-----------------|
|                      |   |          |    |   |   |   |    |               |   |            |
| SJG:                 |   |          |    |   |   |   |    |               |   |            |
|                      |   |          |    |   |   |   |    |               |   |            |   |   |   |
| Revolving Credit Facility |   | $             | 100,000 |   |   | $      | 40,000  |               |   | $               | 60,000 |   | August 2011 |
| Line of Credit            |   |          | 40,000  |   |   |   | — |               |   |            | 40,000 |   | December 2010 (A) |
| Uncommitted Bank Lines    |   |          | 55,000  |   |   |   | 22,000  |               |   |            | 33,000 |   | Various |
|                      |   |          |    |   |   |   |    |               |   |            |   |   |   |
| Total SJG                 |   |          | 195,000 |   |   |   | 62,000  |               |   |            | 133,000 |   |   |
|                      |   |          |    |   |   |   |    |               |   |            |   |   |   |
| SJI:                      |   |          |    |   |   |   |    |               |   |            |   |   |   |
|                      |   |          |    |   |   |   |    |               |   |            |   |   |   |
| Revolving Credit Facility |   | $             | 200,000 |   |   | $      | 161,140 |               |   | $               | 38,860 |   | August 2011 (B) |
| Uncommitted Bank Lines    |   |          | 30,000  |   |   |   | 980     |               |   |            | 29,020 |   | Various |
|                      |   |          |    |   |   |   |    |               |   |            |   |   |   |
| Total SJI                 |   |          | 230,000 |   |   |   | 162,120 |               |   |            | 67,880 |   |   |
|                      |   |          |    |   |   |   |    |               |   |            |   |   |   |
| Total                     |   | $             | 425,000 |   |   | $      | 224,120 |               |   | $               | 200,880 |   |   |

|   | (A) | The Company anticipates extending this line of credit during the fourth quarter of 2010. |
|--------|-----|------------------------------------------------------------------------------------------|

|   | (B) | Includes letters of credit outstanding in the amount of $90.1 million. |
|--------|-----|------------------------------------------------------------------------|

| 12. | COMMITMENTS AND CONTINGENCIES: |
|-----|--------------------------------|

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| 13.  | DERIVATIVE INSTRUMENTS: |
|-----------|-------------------------|

----

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| Derivatives not designated as hedging instruments under GAAP       |   | March 31, 2010 |    |   | December 31, 2009 |   |
|--------------------------------------------------------------------|--------|----------------|---------|--------|-------------------|--------|
|                                                               |   | Assets         |    |   | Liabilities       |   |   | Assets |   |   | Liabilities |   |
|                                                               |   |           |    |   |              |   |   |   |   |   |   |   |
| Energy related commodity contracts:                                |   |           |    |   |              |   |   |   |   |   |   |   |
| Derivatives – Energy Related – Current                 |   | $              | 42,858  |   |              | $      | 59,411 |   |   | $ | 36,512 |   |   | $ | 28,260 |   |
| Derivatives – Energy Related – Non-Current             |   |           | 14,210  |   |              |   | 11,447 |   |   |   | 11,585 |   |   |   | 10,931 |   |
| Interest rate contracts:                                           |   |           |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives - Other                                                |   |           | — |   |              |   | 4,004 |   |   |   | — |   |   |   | 3,704 |   |
| Total derivatives not designated as hedging instruments under GAAP |   |           | 57,068  |   |              |   | 74,862 |   |   |   | 48,097 |   |   |   | 42,895 |   |
|                                                               |   |           |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives designated as hedging instruments under GAAP           |   |           |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
|                                                               |   |           |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate contracts:                                           |   |           |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives - Other                                                |   |           | — |   |              |   | 1,996 |   |   |   | — |   |   |   | 2,119 |   |
| Total derivatives designated as hedging instruments under GAAP     |   |           | — |   |              |   | 1,996 |   |   |   | — |   |   |   | 2,119 |   |
|                                                               |   |           |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Total Derivatives                                                  |   | $              | 57,068  |   |              | $      | 76,858 |   |   | $ | 48,097 |   |   | $ | 45,014 |   |

|                                                              |   | Three months ended March 31, |    |
|-------------------------------------------------------------------|--------|------------------------------|---------|
| Derivatives in Cash Flow Hedging Relationships                    |   | 2010                         |    |   | 2009 |   |
|                                                              |   |                         |    |   |   |   |
| Interest Rate Contracts:                                          |   |                         |    |   |   |   |
| Gains recognized in OCI on effective portion                      |   | $                            | 72      |   |   | $ | 373 |   |
| Losses reclassified from accumulated OCI into income (a)          |   | $                            | (232    | ) |   | $ | (172 | ) |
| Gains or (losses) recognized in income on ineffective portion (a) |   |                         | — |   |   |   | — |   |

|                                                         |   | Three months ended March 31, |    |
|--------------------------------------------------------------|--------|------------------------------|---------|
| Derivatives Not Designated as Hedging Instruments under GAAP |   | 2010                         |    |   | 2009 |   |
|                                                         |   |                         |    |   |   |   |
| Losses on energy related commodity contracts (a)             |   | $                            | (22,124 | ) |   | $ | (16,279 | ) |
| Losses (gains) on interest rate contracts (b)                |   |                         | (239    | ) |   |   | 203 |   |
|                                                         |   |                         |    |   |   |   |   |   |
| Total                                                        |   | $                            | (22,363 | ) |   | $ | (16,076 | ) |

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| 14. | FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES: |
|-----|-----------------------------------------------------------|

|   | ● | Level 1:  Observable inputs such as quoted prices in active markets for identical assets or liabilities. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------|

|   | ● | Level 2:  Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Level 3:  Unobservable inputs that reflect the reporting entity’s own assumptions. |
|--------|---------|----------------------------------------------------------------------------------------------------|

|                                               |   |   |   |   |    |   |    |    |   |   |    |   |
|----------------------------------------------------|--------|--------|--------|--------|---------|--------|---------|---------|--------|--------|---------|--------|
|                                               |   | Total  |   |   | Level 1 |   |    | Level 2 |   |   | Level 3 |   |
| Assets                                             |   |   |   |   |    |   |    |    |   |   |    |   |
| Available-for-Sale Securities (A)                  |   | $      | 6,212  |   |    | $      | 6,212   |    |   | $      | — |   |   | $ | — |   |
| Derivatives – Energy Related Assets (B)      |   |   | 57,068 |   |    |   | 34,567  |    |   |   | 20,306  |   |   |   | 2,195 |   |
|                                               |   | $      | 63,280 |   |    | $      | 40,779  |    |   | $      | 20,306  |   |   | $ | 2,195 |   |
|                                               |   |   |   |   |    |   |    |    |   |   |    |   |   |   |   |   |
| Liabilities                                        |   |   |   |   |    |   |    |    |   |   |    |   |   |   |   |   |
|                                               |   |   |   |   |    |   |    |    |   |   |    |   |   |   |   |   |
| Derivatives – Energy Related Liabilities (B) |   | $      | 70,858 |   |    | $      | 33,560  |    |   | $      | 10,267  |   |   | $ | 27,031 |   |
| Derivatives – Other (C)                      |   |   | 6,000  |   |    |   | — |    |   |   | 6,000   |   |   |   | — |   |
|                                               |   | $      | 76,858 |   |    | $      | 33,560  |    |   | $      | 16,267  |   |   | $ | 27,031 |   |

|                                                              |   |   |    |   |
|-------------------------------------------------------------------|--------|--------|---------|--------|
| Balance at January 1, 2010                                        |   | $      | (10,299 | )      |
| Total gains and losses (realized/unrealized) included in earnings |   |   | (16,470 | )      |
| Transfers in and/or out of Level 3, net                           |   |   | — |   |
| Settlements                                                       |   |   | 1,933   |   |
|                                                              |   |   |    |   |
| Balance at March 31, 2010                                         |   | $      | (24,836 | )      |

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Item 2.

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|                                   |   | Three Months Ended |   |
|----------------------------------------|--------|--------------------|--------|
|                                   |   | March 31,          |   |
|                                   |   | 2010               |   |   | 2009 |   |
| Utility Throughput – dth:        |   |               |   |   |   |   |
| Firm Sales -                           |   |               |   |   |   |   |
| Residential                            |   |               | 11,431 |   |   |   | 11,517 |   |
| Commercial                             |   |               | 2,694  |   |   |   | 2,877 |   |
| Industrial                             |   |               | 148    |   |   |   | 149 |   |
| Cogeneration & Electric Generation |   |               | 44     |   |   |   | 14 |   |
| Firm Transportation -                  |   |               |   |   |   |   |   |   |
| Residential                            |   |               | 982    |   |   |   | 1,007 |   |
| Commercial                             |   |               | 2,641  |   |   |   | 2,571 |   |
| Industrial                             |   |               | 3,089  |   |   |   | 3,052 |   |
| Cogeneration & Electric Generation |   |               | 2,193  |   |   |   | 433 |   |
|                                   |   |               |   |   |   |   |   |   |
| Total Firm Throughput                  |   |               | 23,222 |   |   |   | 21,620 |   |
|                                   |   |               |   |   |   |   |   |   |
| Interruptible Sales                    |   |               | 3      |   |   |   | 2 |   |
| Interruptible Transportation           |   |               | 586    |   |   |   | 636 |   |
| Off-System                             |   |               | 1,116  |   |   |   | 2,694 |   |
| Capacity Release                       |   |               | 10,189 |   |   |   | 8,499 |   |
|                                   |   |               |   |   |   |   |   |   |
| Total Throughput - Utility             |   |               | 35,116 |   |   |   | 33,451 |   |

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|                                                 |   | Three Months Ended |    |
|------------------------------------------------------|--------|--------------------|---------|
|                                                 |   | March 31,          |    |
|                                                 |   | 2010               |    |   | 2009 |   |
| Utility Operating Revenues:                          |   |               |    |   |   |   |
| Firm Sales -                                         |   |               |    |   |   |   |
| Residential                                          |   | $                  | 137,515 |   |   | $ | 168,638 |   |
| Commercial                                           |   |               | 29,623  |   |   |   | 36,526 |   |
| Industrial                                           |   |               | 1,795   |   |   |   | 1,811 |   |
| Cogeneration & Electric Generation               |   |               | 411     |   |   |   | 273 |   |
| Firm Transportation -                                |   |               |    |   |   |   |   |   |
| Residential                                          |   |               | 4,454   |   |   |   | 4,695 |   |
| Commercial                                           |   |               | 8,599   |   |   |   | 7,914 |   |
| Industrial                                           |   |               | 3,976   |   |   |   | 3,587 |   |
| Cogeneration & Electric Generation               |   |               | 2,009   |   |   |   | 459 |   |
|                                                 |   |               |    |   |   |   |   |   |
| Total Firm Revenues                                  |   |               | 188,382 |   |   |   | 223,903 |   |
|                                                 |   |               |    |   |   |   |   |   |
| Interruptible Sales                                  |   |               | 48      |   |   |   | 40 |   |
| Interruptible Transportation                         |   |               | 607     |   |   |   | 557 |   |
| Off-System                                           |   |               | 6,924   |   |   |   | 16,902 |   |
| Capacity Release                                     |   |               | 518     |   |   |   | 1,440 |   |
| Other                                                |   |               | 237     |   |   |   | 271 |   |
|                                                 |   |               | 196,716 |   |   |   | 243,113 |   |
| Less: Intercompany Sales                             |   |               | 659     |   |   |   | 3,004 |   |
| Total Utility Operating Revenues                     |   |               | 196,057 |   |   |   | 240,109 |   |
|                                                 |   |               |    |   |   |   |   |   |
| Less:                                                |   |               |    |   |   |   |   |   |
| Cost of Sales                                        |   |               | 116,216 |   |   |   | 162,973 |   |
| Conservation Recoveries*                             |   |               | 3,119   |   |   |   | 3,265 |   |
| RAC Recoveries*                                      |   |               | 1,741   |   |   |   | 1,209 |   |
| EET Recoveries*                                      |   |               | 179     |   |   |   | — |   |
| Revenue Taxes                                        |   |               | 3,752   |   |   |   | 4,071 |   |
| Utility Margin                                       |   | $                  | 71,050  |   |   | $ | 68,591 |   |
|                                                 |   |               |    |   |   |   |   |   |
| Margin:                                              |   |               |    |   |   |   |   |   |
| Residential                                          |   | $                  | 45,300  |   |   | $ | 45,590 |   |
| Commercial and Industrial                            |   |               | 14,958  |   |   |   | 15,429 |   |
| Cogeneration and Electric Generation                 |   |               | 709     |   |   |   | 340 |   |
| Interruptible                                        |   |               | 38      |   |   |   | 46 |   |
| Off-system & Capacity Release                    |   |               | 309     |   |   |   | 702 |   |
| Other Revenues                                       |   |               | 236     |   |   |   | 270 |   |
| Margin Before Weather Normalization & Decoupling |   |               | 61,550  |   |   |   | 62,377 |   |
| CIRT Mechanism                                       |   |               | 2,024   |   |   |   | — |   |
| CIP Mechanism                                        |   |               | 7,442   |   |   |   | 6,214 |   |
| EET Mechanism                                        |   |               | 34      |   |   |   | — |   |
| Utility Margin                                       |   | $                  | 71,050  |   |   | $ | 68,591 |   |
|                                                 |   |               |    |   |   |   |   |   |
| Degree Days:                                         |   |               | 2,433   |   |   |   | 2,518 |   |

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|                                |   | Three Months EndedMarch 31, |   |
|-------------------------------------|--------|-----------------------------|--------|
|                                |   | 2010                        |   |   | 2009 |   |
| Net Income Benefit:            |   |                        |   |   |   |   |
| CIP – Weather Related         |   | $                           | 0.4    |   |   | $ | (0.6 | )  |
| CIP – Usage Related           |   |                        | 4.0    |   |   |   | 4.3 |   |
| Total Net Income Benefit            |   | $                           | 4.4    |   |   | $ | 3.7 |   |
|                                |   |                        |   |   |   |   |   |   |
| Weather Compared to 20-Year Average |   | 0.2% colder                 |   |   | 3.7% colder |   |
| Weather Compared to Prior Year      |   | 3.4% warmer                 |   |   | 11.2% colder |   |

|         |   | 2010   |   |   | 2009   |   |
|--------------|--------|--------|--------|--------|--------|--------|
| Residential  |   |   | 8,408  |   |   |   | 9,891 |   |
| Commercial   |   |   | 1,025  |   |   |   | 1,075 |   |
| Large Volume |   |   | 31     |   |   |   | 36 |   |

|                                                     |   | 2010   |   |   | 2009   |   |   | Change |   |
|----------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                     |   |   |   |   |   |   |   |   |   |
| SJE Retail Electric Revenue                              |   | $      | 29.6   |   |   | $      | 6.0    |   |   | $ | 23.6 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Add: Unrealized Losses                                   |   |   | 13.7   |   |   |   | 2.0    |   |   |   | 11.7 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| SJE Retail Electric Revenue, Excluding Unrealized Losses |   | $      | 43.3   |   |   | $      | 8.0    |   |   | $ | 35.3 |   |

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|                                      |   | 2010   |   |   | 2009   |   |   | Change |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                      |   |   |   |   |   |   |   |   |   |
| SJRG Revenue                              |   | $      | 54.3   |   |   | $      | 63.7   |   |   | $ | (9.4 | ) |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Add: Unrealized Losses                    |   |   | 8.4    |   |   |   | 14.2   |   |   |   | (5.8 | ) |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| SJRG Revenue, Excluding Unrealized Losses |   | $      | 62.7   |   |   | $      | 77.9   |   |   | $ | (15.2 | ) |

|   | ● | Gross margin for SJRG increased $10.2 million in the three months ended March 31, 2010 compared with the same period of 2009. Excluding the impact of the net change in unrealized gains and losses recorded on forward financial contracts as discussed above, gross margin for SJRG increased $4.7 million due mainly to favorable time spreads on storage and transportation asset positions that were locked in and/or improved upon. Storage assets allow SJRG to lock in the differential between purchasing natural gas at low current prices and selling equivalent quantities at higher future prices. Gross margin is generated via seasonal pricing differentials. While this margin will be attained over the transaction cycle, the timing of physical injections and withdraws and related hedge settlements can cause earnings fluctuations for accounting purposes due to the volatile nature of wholesale gas prices. Similar to storage, transportation assets allow us to lock in the differential of transporting natural gas from one delivery point to another. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | ● | Gross Margin for Marina decreased $1.0 million in the three months ended March 31, 2010 compared with the same period of 2009. Gross margin as a percentage of Operating Revenues decreased 6.8 percentage points due mainly to the deconsolidation of ACLE and WCLE as discussed in Note 1 to the condensed consolidated financial statements, partially offset by a decrease in low-margin electric sales to Borgata. As per our contract, the billing rates are designed to recover the underlying commodity costs over time. However during interim periods, certain components of the underlying commodity costs are not adjusted proportionately. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Gross margin from SJE’s retail gas sales decreased $0.2 million in the three months ended March 31, 2010, compared with the same period in 2009 due mainly to lower customer counts (See Operating Revenues – Nonutility). Gross margin as a percentage of Operating Revenues did not change significantly in 2010 compared with 2009. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Gross margin from SJE’s retail electricity sales decreased $10.1 million in the three months ended March 31, 2010 compared with the same period of 2009. Excluding the impact of a $11.7 million increase in unrealized losses recorded on forward financial contracts, gross margin increased $1.6 million in 2010 compared with 2009. This increase was mainly due to the impact of the school bid as mentioned in Operating Revenues - Nonutility. Excluding the impact of the unrealized losses, gross margin as a percentage of Operating Revenues decreased 2.1 percentage points in 2010 compared with 2009. LMP rates, which were lower in 2010, are a pass through to our customers while our margin is based on volumetric and transmission components of the customer contracts. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Gross margin for SJESP decreased $0.2 million in the three months ended March 31, 2010 compared with the same period in 2009 due mainly to margins recognized on a large commercial installation job in 2009.  Gross margin as a percentage of Operating Revenues decreased 2.3 percentage points in 2010 compared with 2009 due to higher labor and benefit costs. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                |   | ThreeMonths EndedMarch 31,2010 vs. 2009 |   |
|-------------------------------------|--------|-----------------------------------------|--------|
|                                |   |                                    |
|                                |   |                                    |
|                                |   |                                    |   |   |
| Utility                             |   | $                                       | 447    |   |
| Nonutility:                         |   |                                    |   |   |
| Wholesale Gas                       |   |                                    | 270    |   |
| Retail Gas and Other                |   |                                    | (262   | )  |
| Retail Electricity                  |   |                                    | 114    |   |
| On-Site Energy Production           |   |                                    | (60    | )  |
| Appliance Service                   |   |                                    | 196    |   |
| Total Nonutility                    |   |                                    | 258    |   |
| Intercompany Eliminations and Other |   |                                    | (138   | )  |
| Total Operations                    |   | $                                       | 567    |   |

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| Company                   |   | TotalFacility |    |   | Usage  |   |    | Available Liquidity |   | Expiration Date |
|---------------------------|--------|---------------|---------|--------|--------|--------|---------|---------------------|--------|-----------------|
|                      |   |          |    |   |   |   |    |                |   |            |
| SJG:                 |   |          |    |   |   |   |    |                |   |            |
|                      |   |          |    |   |   |   |    |                |   |            |   |   |   |
| Revolving Credit Facility |   | $             | 100,000 |   |   | $      | 40,000  |                |   | $               | 60,000 |   | August 2011 |
| Line of Credit            |   |          | 40,000  |   |   |   | — |                |   |            | 40,000 |   | December 2010 (A) |
| Uncommitted Bank Lines    |   |          | 55,000  |   |   |   | 22,000  |                |   |            | 33,000 |   | Various |
|                      |   |          |    |   |   |   |    |                |   |            |   |   |   |
| Total SJG                 |   |          | 195,000 |   |   |   | 62,000  |                |   |            | 133,000 |   |   |
|                      |   |          |    |   |   |   |    |                |   |            |   |   |   |
| SJI:                      |   |          |    |   |   |   |    |                |   |            |   |   |   |
|                      |   |          |    |   |   |   |    |                |   |            |   |   |   |
| Revolving Credit Facility |   | $             | 200,000 |   |   | $      | 161,140 |                |   | $               | 38,860 |   | August 2011 (B) |
| Uncommitted Bank Lines    |   |          | 30,000  |   |   |   | 980     |                |   |            | 29,020 |   | Various |
|                      |   |          |    |   |   |   |    |                |   |            |   |   |   |
| Total SJI                 |   |          | 230,000 |   |   |   | 162,120 |                |   |            | 67,880 |   |   |
|                      |   |          |    |   |   |   |    |                |   |            |   |   |   |
| Total                     |   | $             | 425,000 |   |   | $      | 224,120 |                |   | $               | 200,880 |   |   |

|   | (A)  | The Company anticipates extending this line of credit during the fourth quarter of 2010. |
|--------|-----------|------------------------------------------------------------------------------------------|

|   | (B)  | Includes letters of credit outstanding in the amount of $90.1 million. |
|--------|-----------|------------------------------------------------------------------------|

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|            |   | AsofMarch 31, 2010 |   |   | As ofDecember 31, 2009 |   |
|-----------------|--------|------------------------------|--------|--------|----------------------------------|--------|
|            |   |                         |   |   |                             |   |
| Equity          |   |                         | 53.3   | %      |                             |   | 50.0 | % |
| Long-Term Debt  |   |                         | 34.1   |   |                             |   | 32.0 |   |
| Short-Term Debt |   |                         | 12.6   |   |                             |   | 18.0 |   |
| Total           |   |                         | 100.0  | %      |                             |   | 100.0 | % |

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Item 3.

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|                                                       |                 |   |   |                |   |   |                |   |   |                  |    |   |   |   |   |   |   |   |
|------------------------------------------------------------|----------------------|--------|--------|---------------------|--------|--------|---------------------|--------|--------|-----------------------|---------|--------|--------|--------|--------|--------|--------|--------|
| Assets                                                     |                 |   |   |                |   |   |                |   |   |                  |    |   |   |   |   |   |   |   |
|                                                       | Source of Fair Value |   |   | Maturity < 1Year |   |   | Maturity 1 -3 Years |   |   | MaturityBeyond 3Years |    |   | Total  |   |
|                                                       |                 |   |   |                |   |   |                |   |   |                  |    |   |   |   |   |   |   |   |
| Prices actively quoted                                     |                 | $      | 27,453 |                |   | $      | 7,114               |   |   | $                     | — |   |   | $      | 34,567 |   |
|                                                       |                 |   |   |                |   |   |                |   |   |                  |    |   |   |   |   |   |
| Prices provided by other external sources                  |                 |   | 14,354 |                |   |   | 5,952               |   |   |                  | — |   |   |   | 20,306 |   |
|                                                       |                 |   |   |                |   |   |                |   |   |                  |    |   |   |   |   |   |
| Prices based on internal models or other valuation methods |                 |   | 1,051  |                |   |   | 1,144               |   |   |                  | — |   |   |   | 2,195  |   |
|                                                       |                 |   |   |                |   |   |                |   |   |                  |    |   |   |   |   |   |
| Total                                                      |                 | $      | 42,858 |                |   | $      | 14,210              |   |   | $                     | — |   |   | $      | 57,068 |   |

|                                                       |                 |   |   |               |   |   |                |   |   |                  |    |   |   |   |   |   |   |   |
|------------------------------------------------------------|----------------------|--------|--------|--------------------|--------|--------|---------------------|--------|--------|-----------------------|---------|--------|--------|--------|--------|--------|--------|--------|
| Liabilities                                                |                 |   |   |               |   |   |                |   |   |                  |    |   |   |   |
|                                                       | Source of Fair Value |   |   | Maturity <1Year |   |   | Maturity 1 -3 Years |   |   | MaturityBeyond 3Years |    |   | Total  |   |
|                                                       |                 |   |   |               |   |   |                |   |   |                  |    |   |   |   |   |   |   |   |
| Prices actively quoted                                     |                 | $      | 26,980 |               |   | $      | 6,580               |   |   | $                     | — |   |   | $      | 33,560 |   |
|                                                       |                 |   |   |               |   |   |                |   |   |                  |    |   |   |   |   |   |
| Prices provided by other external sources                  |                 |   | 7,558  |               |   |   | 2,709               |   |   |                  | — |   |   |   | 10,267 |   |
|                                                       |                 |   |   |               |   |   |                |   |   |                  |    |   |   |   |   |   |
| Prices based on internal models or other valuation methods |                 |   | 24,873 |               |   |   | 1,987               |   |   |                  | 171     |   |   |   | 27,031 |   |
|                                                       |                 |   |   |               |   |   |                |   |   |                  |    |   |   |   |   |   |
| Total                                                      |                 | $      | 59,411 |               |   | $      | 11,276              |   |   | $                     | 171     |   |   | $      | 70,858 |   |

| Net Derivatives — Energy Related Assets,  January 1, 2010    |   | $      | 8,906   |    |
|-------------------------------------------------------------------------|--------|--------|---------|---------|
| Contracts Settled During Three Months Ended March 31, 2010, Net         |   |   | (16,777 | )       |
| Other Changes in Fair Value from Continuing and New Contracts, Net      |   |   | (5,919  | )  |
|                                                                    |   |   |    |    |
| Net Derivatives — Energy Related Assets  March 31, 2010 |   | $      | (13,790 | )  |

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| Amount |       |   | Fixed Interest Rate |   | Start Date |   | Maturity   |   | Type       |   | Obligor    |
|--------|------------|--------|---------------------|--------|------------|--------|------------|--------|------------|--------|------------|
| $      | 3,900,000  |   |                |   | 4.795      | %      | 12/01/2004 |   | 12/01/2014 |   | Taxable    |   | Marina |
| $      | 8,000,000  |   |                |   | 4.775      | %      | 11/12/2004 |   | 11/12/2014 |   | Taxable    |   | Marina |
| $      | 20,000,000 |   |                |   | 4.080      | %      | 11/19/2001 |   | 12/01/2011 |   | Tax-exempt |   | Marina |
| $      | 14,500,000 |   |                |   | 3.905      | %      | 03/17/2006 |   | 01/15/2026 |   | Tax-exempt |   | Marina |
| $      | 500,000    |   |                |   | 3.905      | %      | 03/17/2006 |   | 01/15/2026 |   | Tax-exempt |   | Marina |
| $      | 330,000    |   |                |   | 3.905      | %      | 03/17/2006 |   | 01/15/2026 |   | Tax-exempt |   | Marina |
| $      | 7,100,000  |   |                |   | 4.895      | %      | 02/01/2006 |   | 02/01/2016 |   | Taxable    |   | Marina |
| $      | 12,500,000 |   |                |   | 3.430      | %      | 12/01/2006 |   | 02/01/2036 |   | Tax-exempt |   | SJG |
| $      | 12,500,000 |   |                |   | 3.430      | %      | 12/01/2006 |   | 02/01/2036 |   | Tax-exempt |   | SJG |

Item 4. Controls and Procedures

PART II — OTHER INFORMATION

Item l. Legal Proceedings

Item 1A. Risk Factors

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

| Period                                                                                         |   | Total Number of Shares Purchased1 |    |   | Average Price Paid Per Share1 |   |    | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs2 |   |   | Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs2 |   |
|------------------------------------------------------------------------------------------------|--------|-----------------------------------|---------|--------|-------------------------------|--------|---------|-----------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------|--------|
| January             2010           |   |                              | 3,581   |   |                          | $      | 38.3846 |                                                                              |   |   | —                                                                         |   |   |   | — |   |
| February           2010                      |   |                              | 6,028   |   |                          | $      | 40.2954 |                                                                              |   |   | —                                                                         |   |   |   | — |   |
| March               2010 |   |                              | — |   |                          |   | — |                                                                              |   |   | —                                                                         |   |   |   | — |   |
| Total                                                                                          |   |                              | 9,609   |   |                          |   |    |                                                                              |   |   | —                                                                         |   |   |   | — |   |

Item 6

| 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). |

|               |   | SOUTH JERSEY INDUSTRIES, INC. |
|--------------------|--------|-------------------------------|
|               |   | (Registrant)                  |
|               |   |                          |   |
| Dated: May 7, 2010 |   | By:                      | /s/ Edward J. Graham |
|               |   |                          | Edward J. Graham |
|               |   |                          | Chairman, President & Chief Executive Officer |
|               |   |                          |   |
| Dated: May 7, 2010 |   | By:                      | /s/ David A. Kindlick |
|               |   |                          | David A. Kindlick |
|               |   |                          | Vice President & Chief Financial Officer |

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