Company: MSEX
Filing Date: 2025-03-11
Form Type: 10-K/A
Source: 0001174947-25-000318
Chunk: 20

Company: MIDDLESEX WATER CO
Filing Date: 2025-03-11
Form: 10-K/A
Chunk 20
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 action by a regulator it is probable that the future increase or decrease in taxes payable for items such as changes in tax laws or rates will be recovered from or returned to customers through future rates, an asset or liability shall be recognized for that probable increase or decrease in future revenue. Accounting guidance also requires that regulatory liabilities and/or assets be considered a temporary difference for which a related deferred tax asset and/or liability shall be recognized. Accounting guidance requires that we establish reserves for uncertain tax positions, if any, when it is more likely than not that the positions will not be sustained when challenged by taxing authorities. Any changes to the estimates and judgments with respect to the interpretations, timing or deductibility could result in a change to earnings and cash flows. Interest and penalties related to unrecognized tax benefits, if any, are recognized within interest charges and other expense, respectively.

Note 4 - Commitments and Contingent Liabilities

Water Supply – Middlesex’s
agreement with the New Jersey Water Supply Authority (NJWSA) for the purchase of untreated water expires . NJSWA provides
for an average purchase of million gallons a day (mgd), with a peak up to mgd. Pricing is set annually by the NJWSA through
a public rate making process. The agreement has provisions for additional pricing in the event Middlesex overdrafts or exceeds certain
monthly and annual thresholds.

Middlesex also has an agreement with a non-affiliated
NJBPU-regulated water utility for the purchase of treated water. This agreement, which expires , provides for the minimum
purchase of mgd of treated water with provisions for additional purchases if needed.

Tidewater contracts with the City of Dover, Delaware
to purchase treated water of up to million gallons annually.

Purchased water costs are shown below:

|             |     | (In Millions)            
 Years Ended December 31, | 2024 |     |   | 2023 |     |   | 2022 |
|:------------|:----|:-------------------------|-----:|:----|:--|-----:|:----|:--|-----:|
| Untreated   |     | $                        |  3.5 |     | $ |  3.2 |     | $ |  3.2 |
| Treated     |     |                          |  4.0 |     |   |  5.3 |     |   |  3.9 |
| Total Costs |     | $                        |