Company: MSEX
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001174947-25-000251
Chunk: 192

Company: MIDDLESEX WATER CO
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1A
Chunk 192
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 and its wholly-owned subsidiaries (the Company) are reported on a consolidated basis. All significant
intercompany accounts and transactions have been eliminated. Other financial investments in which the Company holds a 50% or less voting
interest and cannot exercise control over the operation and policies of the investments are accounted for under the equity method of accounting.
Under the equity method of accounting, the Company records its investment interests in Non-Utility Assets and its percentage share of
the earnings or losses of the investees in Other Income.

(c) System of Accounts – The
Company’s regulated utilities maintain their accounts in accordance with the Uniform System of Accounts prescribed by the NJBPU
and DEPSC.

(d) Regulatory Accounting - We maintain
our books and records in accordance with accounting principles generally accepted in the 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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