Company: MSEX
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001174947-25-000251
Chunk: 782

Company: MIDDLESEX WATER CO
Filing Date: 2025-02-28
Form: 10-K
Item: Item 4
Chunk 782
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 the rights, title, and interest in the water utility assets of Ocean
View for $4.6 million was approved by the DEPSC. Ocean View serves approximately 900 customers in Sussex County, Delaware. Tidewater currently
provides water service to most residents of Ocean View other than the 900 customers currently served by Ocean View. Closing on this purchase
is expected by April 2025.

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, capital expenditures did exceed the established threshold. In addition, rates
are increased annually by the lesser of the regional Consumer Price Index or 3%. Effective January 1, 2025, Southern Shores rates were
increased $0.1 million or 6.51%.

Twin Lakes – Twin Lakes provides
water services to approximately 115 residential customers in Shohola, Pennsylvania. In January 2021, the Pennsylvania Public Utility Commission
(PAPUC) appointed a large Pennsylvania based investor-owned utility as the receiver (the Receiver Utility) of the Twin Lakes system. In
November 2021, the PAPUC issued an Order ordering the Receiver Utility to acquire the Twin Lakes water system and for Middlesex, the parent
company of Twin Lakes, to submit $1.7 million into an escrow account within 30 days. In January 2025, the United States Court of Appeals
for the Third Circuit (Third Circuit Court) upheld the PAPUC Order. Following the Third Circuit Court’s decision, Middlesex will
not pursue further litigation in the federal courts and intends to submit the required escrow payment to complete the Receiver Utility’s
acquisition of the Twin Lakes system. The estimated loss recorded by the Company related to this matter, and the financial results, total
assets and financial obligations of Twin Lakes are not material to Middlesex. 

Regulatory Matters

We have recorded certain costs as regulatory assets
because we expect full recovery of, or are currently recovering, these costs in the rates we charge customers. These deferred costs have
been excluded from rate base and, therefore, we are not earning a return on the unamortized balances. We record regulatory liabilities
for amounts expected to be refunded