Company: MSEX
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001174947-25-000251
Chunk: 164

Company: MIDDLESEX WATER CO
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1A
Chunk 164
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 incurred
investments made in the last ten years to support continued regulatory compliance, enhanced water quality, service reliability, security
and resiliency of the water utility infrastructure assets. Effective October 30, 2024, Tidewater received approval of the DEPSC to suspend
its DSIC rate and implement an interim rate increase, which is expected to result in approximately $2.5 million of annual revenues, subject
to refund pending the outcome of the rate case application.

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%.

Outlook 

Our ability to increase operating income and net
income is based significantly on four factors: weather, adequate and timely rate relief, effective cost management and customer growth
(which are evident in comparison discussions in the Results of Operations section below). Weather patterns which can result in
lower customer demand for water may occur in 2025. As operating costs are anticipated to increase in 2025 in a variety of categories,
we continue to implement plans to further streamline operations and further reduce and mitigate increases in operating costs. Changes
in customer water usage habits, as well as increases in capital expenditures and operating costs, are significant factors in determining
the timing and extent of rate increase requests.

Our investments in system infrastructure continue
to grow significantly and our operating costs are anticipated to increase in 2025 and 2026 in a variety of categories. These factors,
among others, may require a base rate increase request by Middlesex in mid 2025.

Overall, organic residential customer growth continues
in our Tidewater system (approximately 3.5% in 2024).

The Company has projected to spend approximately
$387 million for the 2025-2027 capital investment program, including approximately $105 million for upgrading our Carl J. Olson Surface
Water Treatment Plant (CJO Plant) to integrate PFAS removal from source water, $34 million on the RENEW Program,