Company: MSEX
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001174947-25-000677
Chunk: 68

Company: MIDDLESEX WATER CO
Filing Date: 2025-05-01
Form: 10-Q
Item: Item 8
Chunk 68
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 remaining availability of funds for borrowing. These loans are for
the construction of a one million gallon elevated storage tank and construction, relocation, improvement, and interconnection of transmission
mains. Tidewater has drawn a total of $4.9 million through March 31, 2025 and expects that the requisitions will continue through the
fourth quarter of 2025.

In order to fully fund the ongoing investment program
in our utility plant infrastructure and maintain a balanced capital structure consistent with regulators’ expectations for a regulated
water utility, Middlesex may offer for sale additional shares of its common stock. The amount, timing and method of sale of common stock
is dependent on the timing of construction expenditures, the level of additional debt financing and financial market conditions. As approved
by the NJBPU, the Company is authorized to issue and sell up to 1.0 million shares of its common stock in one or more transactions through
December 31, 2025.

Recent Accounting Pronouncements – See
Note 1 of the Notes to Unaudited Condensed Consolidated Financial Statements for a discussion of recent accounting pronouncements and
guidance.

Item 3. Quantitative and Qualitative Disclosures of Market Risk

We are exposed to market risk associated with changes
in interest rates and commodity prices. The Company is subject to the risk of fluctuating interest rates in the normal course of business.
Our policy is to manage interest rates through the use of fixed rate long-term debt and, to a lesser extent, short-term debt. The Company’s
interest rate risk related to existing fixed rate, long-term debt is not material due to the term of the majority of our First Mortgage
Bonds, which have final maturity dates ranging from 2026 to 2059. Over the next twelve months, approximately $7.7 million of the current
portion of existing long-term debt instruments will mature. Applying a hypothetical change in the rate of interest charged by 10% on those
borrowings would not have a material effect on our earnings. Fixed rate long-term debt and variable rate short-term debt agreements were
not entered into for trading purposes.

Our risks associated with commodity price increases
for chemicals, electricity and other commodities are reduced through contractual arrangements and the ability to recover price increases
through rates. Non-performance by these commodity suppliers could have a material adverse impact on our results of operations, financial
position and cash flows.

We are exposed to credit risk for both our Regulated
and Non-Regulated