Company: MSEX
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0001628280-25-047821
Chunk: 27

Company: MIDDLESEX WATER CO
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 1
Chunk 27
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 purchase of 3.0 mgd of treated water with provisions for additional purchases if needed.Tidewater contracts with the City of Dover in Delaware to purchase treated water of up to 75.0 million gallons annually.Purchased water costs are shown below:(In Thousands)Three Months EndedSeptember 30,Nine Months EndedSeptember 30,2025202420252024Treated$1,143 $796 $3,242 $2,697 Untreated907 611 2,691 2,322 Total Costs$2,050 $1,407 $5,933 $5,019 Leases – The Company determines if an arrangement is a lease at inception. Generally, a lease agreement exists if the Company determines that the arrangement gives the Company control over the use of an identified asset and obtains substantially all of the benefits from the identified asset.

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The Company’s only significant operating lease is for office space for administrative purposes, which expires in January 2030. The Company has not entered into any finance leases. The exercise of a lease renewal option for the Company’s administrative offices is solely at the discretion of the Company.The right-of-use (ROU) asset recorded represents the Company’s right to use an underlying asset for the lease term and lease liability represents the Company’s obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company’s operating lease does not provide an implicit discount rate and as such the Company used an estimated incremental borrowing rate (4.03%) based on the information available at the commencement date in determining the present value of lease payments.Given the impacts of accounting for regulated operations, and the resulting recognition of expense at the amounts recovered in customer rates, expenditures for operating leases are consistent with lease expense and were $0.2 million for each of the three months ended September 30, 2025 and 2024, respectively, and $0.6 million for each of the nine months ended September 30, 2025 and 2024, respectively.Information related to operating lease ROU assets and lease liabilities is as follows:(In Millions)As ofSeptember 30, 2025December 31, 2024ROU Asset at Lease Inception$7.3 $7.3 Accumulated Amortization(5.2)(4.7)ROU Asset$2.1