Company: MSEX
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001174947-25-000251
Chunk: 311

Company: MIDDLESEX WATER CO
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1B
Chunk 311
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 United States of America (GAAP). Middlesex and
certain of its subsidiaries, which account for 93% of Operating Revenues and 99% of Total Assets, are subject to regulation in the state
in which they operate. Those companies are required to maintain their accounts in accordance with regulatory authorities’ rules
and guidelines, which may differ from other authoritative accounting pronouncements. In those instances, the Company follows the guidance
provided in Accounting Standards Codification (ASC) 980, Regulated Operations.

In accordance with ASC 980, Regulated Operations,
costs and obligations are deferred if it is probable that these items will be recognized for rate-making purposes in future rates. Accordingly,
we have recorded costs and obligations, which will be amortized over various future periods. Any change in the assessment of the probability
of rate-making treatment will require us to change the accounting treatment of the deferred item. We have no reason to believe any of
the deferred items that are recorded will be treated differently by the regulators in the future. For additional information, see Note
2 – Rate and Regulatory Matters.

(e) Retirement Benefit Plans - We maintain
a noncontributory defined benefit pension plan (Pension Plan), which covers all active employees who were hired prior to April 1, 2007,
as well as a defined contribution plan in which all employees are eligible to participate. In addition, the Company maintains an unfunded
supplemental plan for certain of its executive officers. The Company has a retirement benefit plan other than pensions (Other Benefits
Plan) for substantially all of its retired employees. Employees hired after March 31, 2007 are not eligible to participate in this plan.
Coverage includes healthcare and life insurance.

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The Company’s costs for providing retirement
benefits are dependent upon numerous factors, including actual plan experience and assumptions of future experience. Retirement benefit
plan obligations and expense are determined based on investment performance, discount rates and various other demographic factors related
to the population participating in the Company’s retirement benefit plans, all of which can change significantly in future years.
For more information on the Company’s Retirement Benefit Plans, see Note 7 – Employee Benefit Plans.

(f) Utility Plant – Utility
Plant is stated at original cost as defined for regulatory purposes. Property accounts are charged with the cost of betterments and major
replacements of property. Cost includes direct material, labor and indirect charges for pension benefits and payroll taxes. The cost of
labor, materials, supervision and other expenses incurred