Company: MSEX
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001174947-25-000677
Chunk: 45

Company: MIDDLESEX WATER CO
Filing Date: 2025-05-01
Form: 10-Q
Item: Item 8
Chunk 45
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 to Income Tax Disclosures”   The ASU amends certain income tax disclosure requirements, including adding requirements to present the reconciliation of income tax expense computed at the statutory rate to actual income tax expense using both percentages and amounts and providing a disaggregation of income taxes paid. Further, certain disclosures are eliminated, including the current requirement to disclose information on changes in unrecognized tax benefits in the next 12 months.   The ASU is effective for the Company beginning with its annual financial statements for the year ending December 31, 2025. Early adoption is permitted.   Prospective, with retrospective application also permitted.   The Company is currently evaluating the requirements of ASU 2023-09. 

Note 2 – Rate and Regulatory Matters

Middlesex – In October 2023, the New
Jersey Board of Public Utilities (NJBPU) approved Middlesex’s petition for a Distribution System Improvement Charge (DSIC) Foundation
Filing, which is a prerequisite to implementing a DSIC rate that allows water utilities to recover investments in, and generate a return
on, qualifying capital improvements to their water distribution system made between rate proceedings. Middlesex is authorized to recover
DSIC revenues up to five percent (5%) of total revenues established in Middlesex’s 2021 base rate proceeding, or approximately $5.5
million. Semi-annually, beginning in April 2024, the Company must file for a change in its DSIC rate seeking recovery for DSIC-eligible
investments made during the period. DSIC rates remain in effect until Middlesex’s next base rate case increase. Under the terms
of the Foundational Filing, the Company is required to file a base rate petition before November 2026.

7 

In April 2025, Middlesex filed a third DSIC rate application
that is expected to result in $1.9 million of annual revenues starting June 2025, in addition to the existing $1.1 million of annual revenues
from the first and second DSIC filings.

In February 2025, the NJBPU approved Middlesex’s
petition to reset its Purchased Water Adjustment Clause (PWAC) tariff rate to recover additional annual costs of $0.5 million, primarily
for the purchase of treated water from a non-affiliated water utility regulated by the NJBPU. A PWAC is a rate mechanism that allows for
the recovery of increased purchased water costs between base rate case filings. The PWAC is reset to zero