Company: MSEX
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001174947-25-000251
Chunk: 779

Company: MIDDLESEX WATER CO
Filing Date: 2025-02-28
Form: 10-K
Item: Item 4
Chunk 779
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 with retrospective application also permitted.   The Company is currently evaluating the requirements of ASU 2023-09.
 ASU 2024-03 “Disaggregation of Income Statement Expenses”   The ASU enhances disclosures related to income statement expenses to further disaggregate expenses in the footnotes to the financial statements. The standard requires disaggregation of any relevant expense caption presented on the face of the income statement that contains the following expense categories: purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion. Further, the standard requires disclosure of the total amount and the entity’s definition of selling expenses.    The ASU is effective for the Company beginning with its annual financial statements for the year ended December 31, 2027.    Prospective, with retrospective application also permitted.   The Company is currently evaluating the requirements of ASU 2024-03. 

(r) Reclassifications – Certain reclassifications have
been made to prior periods in the Consolidated Financial Statements and Notes to conform to the current presentation.

48 

Note 2 - Rate and Regulatory Matters

Rate Matters

Middlesex – The approval by the
NJBPU in February 2024 of the negotiated settlement of the Middlesex 2023 base rate case is expected to increase annual operating revenues
by $15.4 million, effective March 1, 2024. The approved tariff rates were designed to recover increased operating costs as well as a
return on invested capital of $563.1 million, based on an authorized return on common equity of 9.6%. Middlesex has made capital infrastructure
investments to ensure prudent upgrade and replacement of its utility assets to support continued regulatory compliance, resilience and
overall quality of service. In August 2023, Middlesex and 3M Company (3M) executed a settlement agreement (Settlement Agreement) to resolve
a lawsuit Middlesex previously initiated claiming 3M introduced Perfluoroalkyl Substances (PFAS) into the Company’s water
supply for its Park Avenue Wellfield Treatment Plant (Park Avenue Plant). The rate case settlement provided that the net proceeds
from the 3M Settlement Agreement were to be used to mitigate the increase in customer rates and reimburse Middlesex for previously incurred
costs for the construction of the Park Avenue Plant PFAS treatment upgrades, including depreciation and carrying costs. This resulted
in the reclassification of $48.3 million from Regulatory Liabilities to Contributions in Aid of Construction