Company: MSEX
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0001174947-25-001119
Chunk: 13

Company: MIDDLESEX WATER CO
Filing Date: 2025-07-31
Form: 10-Q
Item: Item 1
Chunk 13
---
 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

Common Stock – During the six months
ended June 30, 2025 and 2024, there were 8,130 common shares (approximately $0.4 million) and 9,683 common shares (approximately $0.5
million) respectively, issued under the Middlesex Water