Company: MSEX
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0001174947-25-001119
Chunk: 60

Company: MIDDLESEX WATER CO
Filing Date: 2025-07-31
Form: 10-Q
Item: Item 8
Chunk 60
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 which will be recovered from March 2025 through August 2025. Costs of $0.3 million incurred between
January 2025 through June 2025 are expected to be recovered between September 2025 and February 2026. The LSLR surcharge is required to
be reset every six months over the life of the LSLR Plan. Cost recovery for replacing Company-owned lead service lines are recoverable
through traditional rate making in connection with general rate case filings.

Tidewater – In July 2025, the
Delaware Public Service Commission (DEPSC) approved the settlement agreement in our general base rate application between Tidewater, DEPSC Staff and the Delaware Division of the Public Advocate, with new rates effective July 3, 2025. The DEPSC
order approved an increase in our annual operating revenues by $5.5 million based on an authorized return on common equity of 9.5%
and a common equity ratio of 53.50%. In addition, Tidewater will refund approximately $1.1 million of excess deferred income taxes
associated with the Tax Cuts and Jobs Act of 2017 between July 2025 and December 2025, including $0.6 million of interest.

8 

In September 2024, the DEPSC approved Tidewater’s
petition to recover up to $2.1 million of costs associated with Tidewater’s obligation to identify and inventory lead service lines
throughout Tidewater’s service area, as required by federal law and Delaware regulations. Recovery of these costs began February
1, 2025 and is expected to continue through January 2028. Through June 30, 2025, Tidewater has spent $1.8 million to identify and inventory
lead service lines.

Southern Shores – Southern Shores provides
water service to a 2,200 unit condominium community in Sussex County, Delaware under a DEPSC-approved agreement expiring December 31,
2029.  Under the agreement, rates are increased when there are unanticipated capital expenditures or regulatory related changes in
operating expenses exceed certain thresholds. In 2024, capital expenditures did exceed the established threshold. In addition, rates are
increased annually by the lesser of the regional Consumer Price Index or 3%. Effective January 1, 2025, Southern Shores rates were increased
$0.1 million or 6.51%.

Note 3 – Capitalization