Company: MSEX
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001174947-25-000251
Chunk: 637

Company: MIDDLESEX WATER CO
Filing Date: 2025-02-28
Form: 10-K
Item: Item 3
Chunk 637
---
 15, 2023; and
  
    ●
    Non-regulated revenues increased $0.5 million, primarily due to higher supplemental contract services.

29 

Operation and Maintenance Expense

Operation and maintenance expenses for the year
ended December 31, 2023 increased $4.0 million from the same period in 2022 due to increased variable production costs due to weather-driven
changes in water quality and higher chemical prices, higher outside service costs due to production instrumentation calibration activities,
increases in labor costs due to wage increases and higher bad debt expense due to higher anticipated customer receivable write-offs. Partially
offsetting these increases was lower weather-related main break activity in our Middlesex System during the winter months.

Depreciation

Depreciation expense for the year ended December
31, 2023 increased $2.2 million from the same period in 2022 due to a higher level of utility plant in service.

Other Taxes

Other taxes for the year ended December 31, 2023
increased $0.5 million from the same period in 2022 primarily due to higher revenue related taxes on increased revenues in our Middlesex
system.

Gain on Sale of Subsidiary 

Middlesex recognized a $5.2 million gain on the
sale of its regulated Delaware wastewater subsidiary in January 2022.

Other Income, net

Other Income, net for the year ended December
31, 2023 decreased $1.2 million from the same period in 2022 primarily due to lower actuarially-determined retirement benefit plans non-service
benefit.

Interest Charges

Interest charges for the year ended December 31,
2023 increased $3.8 million from the same period in 2022 due to higher average debt outstanding and higher average interest rates in 2023
as compared to 2022.

Income Taxes

Income taxes for the year ended December 31, 2023
decreased by $2.2 million from the same period in 2022, primarily due to greater income tax benefits associated
with increased repair expenditures on tangible property in the Middlesex System and lower pretax income due to gain on the sale of a subsidiary
in 2022. 

Liquidity and Capital Resources 

Cash Flows from Operating Activities

Cash flows from operating activities are largely
influenced by four factors: weather, adequate and timely rate increases, effective cost management and customer growth. The effect of
those factors on net income is