Company: MSEX
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001174947-25-000677
Chunk: 46

Company: MIDDLESEX WATER CO
Filing Date: 2025-05-01
Form: 10-Q
Item: Item 8
Chunk 46
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 once those increased costs are
included in base rates. The new PWAC rate became effective March 1, 2025.

The NJBPU-approved Middlesex Lead Service Line Replacement
(LSLR) Plan continues and Middlesex is currently recovering costs of $0.6 million for replacing customer-owned lead service lines incurred
between July 2024 through December 2024, which will be recovered from March 2025 through August 2025. The LSLR surcharge is required to
be reset every six months over the life of the LSLR Plan. Cost recovery for replacing Company-owned lead service lines are recoverable
through traditional rate making in connection with general rate case filings.

Tidewater – In September 2024, the Delaware
Public Service Commission (DEPSC) approved Tidewater’s petition to recover up to $2.1 million of costs associated with Tidewater’s
obligation to identify and inventory lead service lines throughout Tidewater’s service area, as required by federal law and Delaware
regulations. Recovery of these costs began February 1, 2025 and is expected to continue through January 2028. Through March 31, 2025,
Tidewater has spent $1.8 million, which is included in Regulatory Assets.

In August 2024, Tidewater filed an application with
the DEPSC to increase its general rates for water service. In the application, Tidewater seeks an overall increase in annual operating
revenue of $10.3 million or 25.66% over current revenue. The request for rate increases will allow Tidewater to recover prudently incurred
investments made in the last ten years to support continued regulatory compliance, enhance water quality, service reliability, security
and resiliency of the water utility infrastructure assets. Effective October 30, 2024, Tidewater received approval of the DEPSC to suspend
its DSIC rate and implement an interim rate increase, which is expected to result in approximately $2.5 million of annual revenues, subject
to refund pending the outcome of the rate case application.

Southern Shores – Southern Shores provides
water service to a 2,200 unit condominium community in Sussex County, Delaware under a DEPSC-approved agreement expiring December 31,
2029.  Under the agreement, rates are increased when there are unanticipated capital expenditures or regulatory related changes in
operating expenses exceed certain thresholds. In 2024