Company: MSEX
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001174947-25-000251
Chunk: 147

Company: MIDDLESEX WATER CO
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1A
Chunk 147
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 could curtail
our ability to upgrade or replace utility system assets and have a material adverse effect on our financial condition and results of operations.

We face competition from other utilities and
service providers which might hinder our growth opportunities and mitigate our future profitability.

We face risks of competition from other utilities
or other entities authorized by federal, state or local agencies to expand rate-regulated or contracted utility services. Once a state
utility regulator grants a franchise to a public utility to serve a specific territory, that utility effectively has an exclusive right
to service that territory. Although a new franchise offers some protection against competitors, the pursuit of franchises is often competitive,
particularly in Delaware, where new franchises may be awarded to utilities based upon competitive negotiation. Competing entities have
challenged, and may challenge in the future, our applications for new franchises. Also, third parties entering into agreements to operate
municipal utility systems may adversely affect the management of our long-term agreements to supply water or wastewater services on a
contract basis to those municipalities, which could adversely affect our financial results.

We have short-term and long-term contractual obligations for water,
wastewater and storm water system operation and maintenance under which we may incur costs in excess of payments received.

USA-PA and USA operate and maintain water and
wastewater systems for three New Jersey municipalities under 10-year contracts expiring in 2028, 2030 and 2032, respectively. These contracts
do not protect us against incurring costs in excess of revenues we earn pursuant to the contracts. There can be no assurance we will not
experience losses resulting from these contracts. Losses under these contracts, or our failure or inability to perform or renew such agreements,
may have a material adverse effect on our financial condition and results of operations.

14 

Capital market conditions and key assumptions
may adversely impact the value of our postretirement benefit plan assets and liabilities.

Market factors can adversely affect (1) the rate
of return on assets held in trusts to satisfy our future postretirement benefit obligations and (2) interest rates. Reduced rates of return
can increase the level of contributions required by us to satisfy future postretirement benefit obligations. Changes in interest rates
impact the discount rates used in the determination of our postretirement benefit actuarial valuations. In addition, changes in demographics,
such as increases in life expectancy assumptions, can increase future postretirement benefit obligations. Any negative impact to these
factors, either individually or a combination thereof,