Company: MSEX
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0001174947-25-001119
Chunk: 81

Company: MIDDLESEX WATER CO
Filing Date: 2025-07-31
Form: 10-Q
Item: Item 8
Chunk 81
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 and net income
is based significantly on four factors: weather, adequate and timely rate relief, effective cost management and customer growth. Weather
patterns which can result in lower customer demand for water may occur at any time. 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.

21 

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, required a base rate increase request by Middlesex and Pinelands in June 2025.

Overall, organic residential customer growth continues
in our Tidewater system (approximately 3.5% in 2024). However, current and evolving economic market conditions may challenge that growth.

Our strategy for selective and sustainable growth is focused on the following
key areas:

● Invest in our utility infrastructure to build system resiliency
and meet compliance requirements;

● Timely and adequate recovery of infrastructure investments and
other costs to maintain and continually improve service quality;

● Selective acquisitions of investor and municipally-owned water
and wastewater utilities; and

● Operation of municipal and industrial water and wastewater systems
on a contract basis which meet our risk profile.

Operating Results by Segment

The discussion of the Company’s operating results
is on a consolidated basis and includes significant factors by subsidiary. The Company has two operating segments, Regulated and Non-Regulated.
The operations of the Regulated segment are subject to regulations promulgated by state public utility commissions as to rates and level
of service. Rates and level of service in the Non-Regulated segment are subject to the terms of individually-negotiated and executed contracts
with municipal, industrial and other clients. Both segments are subject to federal and state environmental, water and wastewater quality
and other associated legal and regulatory requirements.

The segments in the tables included below are comprised
of the following companies: Regulated-Middlesex, Tidewater, Pinelands and Southern Shores; Non-Regulated-USA, USA-PA, and White Marsh.

Results of Operations – Three Months Ended June 30, 2025

    (In Thousands) 

    Three Months Ended June 30,