**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**SCHEDULE      14A**

|                                      |   |                                                                                                               |
|-------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------|
| Check                the appropriate box: |
| o                                         |   | Preliminary                Proxy Statement                                                                         |
| o                                         |   | Confidential,                for Use of the Commission Only (as permitted by                Rule 14a-6(e)(2)) |
| þ                                    |   | Definitive                Proxy Statement                                                                          |
| o                                         |   | Definitive                Additional Materials                                                                     |
| o                                         |   | Soliciting                Material Pursuant to §240.14a-12                                                    |

|                                                                           |
|--------------------------------------------------------------------------------|
|                                                                           |
|  Middlesex                Water Company                                   |
| (Name                of Registrant as Specified In Its                Charter) |

|                                                                                                   |
|--------------------------------------------------------------------------------------------------------|
| (Name                of Person(s) Filing Proxy Statement, if other than the                Registrant) |

|   |   |                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                               |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| þ |   | No                fee required.                                                                                                                                                                                                                                                                                                                                     |
| o      |   | Fee                computed on table below per Exchange Act Rules 14a-6(i)(1) and                0-11.                                                                                                                                                                                                                                                         |
|   |   | (1)                                                                                                                                                                                                                                                                                                                                                                 |   | Title                of each class of securities to which transaction                applies:                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                               |
|   |   | (2)                                                                                                                                                                                                                                                                                                                                                                 |   | Aggregate                number of securities to which transaction applies:                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                               |
|   |   | (3)                                                                                                                                                                                                                                                                                                                                                                 |   | Per                unit price or other underlying value of transaction computed pursuant                to                Exchange Act Rule 0-11 (set forth the amount on which the filing fee                is calculated and state how it was determined): |
|   |   |                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                               |
|   |   | (4)                                                                                                                                                                                                                                                                                                                                                                 |   | Proposed                maximum aggregate value of transaction:                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                               |
|   |   | (5)                                                                                                                                                                                                                                                                                                                                                                 |   | Total                fee paid:                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                               |
| o      |   | Fee                paid previously with preliminary materials.                                                                                                                                                                                                                                                                                                      |
| o      |   | Check                box if any part of the fee is offset as provided by Exchange Act                Rule 0-11(a)(2) and identify the filing for which the offsetting fee                was paid previously. Identify the previous filing by registration                statement number, or the Form or Schedule and the date of its                filing. |
|   |   | (1)                                                                                                                                                                                                                                                                                                                                                                 |   | Amount                Previously Paid:                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                               |
|   |   | (2)                                                                                                                                                                                                                                                                                                                                                                 |   | Form,                Schedule or Registration Statement No.:                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                               |
|   |   | (3)                                                                                                                                                                                                                                                                                                                                                                 |   | Filing                Party:                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                               |
|   |   | (4)                                                                                                                                                                                                                                                                                                                                                                 |   | Date                Filed:                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                               |

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*Table          of Contents*

|   | 1500                    Ronson RoadP.O.                      Box 1500 Iselin,                        New Jersey 08830-0452 Tel.                          (732) 634-1500 Fax                            (732) 638-7515 NASDAQ                            Stock Market Symbol: MSEX |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                        |
|   | April                    12, 2007                                                                                                                                                                                                                                                           |

|   | Sincerely,                             |
|--------|----------------------------------------|
|   |                                   |
|   | J.                  Richard Tompkins   |
|   | Chairman                  of the Board |

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| **TABLE                  OF CONTENTS**                                                                                                  |
|----------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                         |   |
|                                                                                                                                         | Page |
|                                                                                                                                         |   |
| SOLICITATION                  AND REVOCATION OF PROXIES                                                                                      | 2 |
|                                                                                                                                         |   |
| SHARES                  ENTITLED TO VOTE                                                                                                     | 2 |
|                                                                                                                                         |   |
| VOTE                  REQUIRED AND METHOD OF COUNTING VOTES                                                                                  | 2 |
|                                                                                                                                         |   |
| GENERAL                  INFORMATION                                                                                                         | 2 |
|                                                                                                                                         |   |
| Proposal                  1 – ELECTION OF DIRECTORS                                                                                    | 4 |
|                                                                                                                                         |   |
| NOMINEES                  FOR ELECTION AS DIRECTORS WITH                  TERMS                                                              | 5 |
| EXPIRING                  IN 2010 - CLASS II                                                                                                 |   |
|                                                                                                                                         |   |
| DIRECTORS                  WHOSE TERMS CONTINUE BEYOND THE                  2007                                                             | 6 |
| ANNUAL                  MEETING AND WHO ARE NOT SUBJECT TO ELECTION THIS                  YEAR                                               |   |
|                                                                                                                                         |   |
| SECURITY                  OWNERSHIP OF DIRECTORS, MANAGEMENT                                                                                 | 8 |
| AND                  CERTAIN BENEFICIAL OWNERS                                                                                               |   |
|                                                                                                                                         |   |
| PROPOSAL                  2 – AMENDMENT TO THE RESTATED                  CERTIFICATE                                                   | 9 |
| OF                  INCORPORATION TO INCREASE THE AUTHORIZED COMMON                  STOCK                                                   |   |
|                                                                                                                                         |   |
| COMPENSATION                  DISCUSSION AND ANALYSIS                                                                                        | 10 |
|                                                                                                                                         |   |
| COMPENSATION                  TABLES                                                                                                         |   |
|      Summary                  Compensation Table - 2006                                                             | 12 |
|           Schedule                  A, Summary – All Other Compensation – 2006 |   |
|      Grants                  of Plan-Based Awards - 2006                                                            | 13 |
|      Outstanding                  Equity Awards - 2006                                                              | 13 |
|      Option                  Exercises & Stock Vested - 2006                                                    | 14 |
|      Pension                  Benefits - 2006                                                                       | 14 |
|      Director                  Compensation - 2006                                                                  | 15 |
|                                                                                                                                         |   |
|      Change                  in Control Agreements                                                                  | 16 |
|                                                                                                                                         |   |
| COMPENSATION                  COMMITTEE INTERLOCKS AND                                                                                       |   |
| INSIDER                  PARTICIPATION                                                                                                       | 17 |
|                                                                                                                                         |   |
| COMPENSATION                  COMMITTEE REPORT                                                                                               | 18 |
|                                                                                                                                         |   |
| AUDIT                  COMMITTEE REPORT                                                                                                      | 19 |
|                                                                                                                                         |   |
| INDEPENDENT                  REGISTERED PUBLIC ACCOUNTING FIRM                  FEES                                                         | 20 |
|                                                                                                                                         |   |
| INDEPENDENT                  REGISTERED PUBLIC ACCOUNTING                  FIRM                                                              | 20 |
| ATTENDANCE                  AT ANNUAL MEETING                                                                                                |   |
|                                                                                                                                         |   |
| STOCKHOLDER                  PROPOSALS                                                                                                       | 21 |
|                                                                                                                                         |   |
| OTHER                  MATTERS                                                                                                               | 21 |
|                                                                                                                                         |   |
| MINUTES                  OF 2006 MEETING OF STOCKHOLDERS                                                                                     | 21 |
|                                                                                                                                         |   |
| EXHIBIT                  A – AUDIT COMMITTEE CHARTER                                                                                   | 22 |
|                                                                                                                                         |   |
| Exhibit                  B – PROPOSED AMENDMENT OF THE FIRST SENTENCE                  OF                                    | 26 |
| ARTICLE                  7A OF THE RESTATED CERTIFICATE OF                  INCORPORATION                                                    |   |
|                                                                                                                                         |   |

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*Table          of Contents*

**NOTICE      OF ANNUAL MEETING OF STOCKHOLDERS**

**TO      BE HELD ON MAY 23, 2007**

**AND**

**PROXY      STATEMENT**

**To      the Stockholders of Middlesex Water Company:**

|   | By                    Order of the Board of Directors, |
|--------|--------------------------------------------------------|
|   |                                                   |
|   | KENNETH                    J. QUINN                    |
|   | Vice                    President, General Counsel,    |
|   | Secretary                    and Treasurer             |

|                        **YOUR                        VOTE IS IMPORTANT!****To                        assure your representation at the meeting, please mail the****enclosed proxy promptly.**  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

**PROXY      STATEMENT**

**SOLICITATION      AND REVOCATION OF PROXIES**

**SHARES      ENTITLED TO VOTE**

**VOTE      REQUIRED AND METHOD OF COUNTING VOTES**

**GENERAL      INFORMATION**

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*Table          of Contents*

**Committees        of the Board**

*Audit      Committee*

*Capital      Improvement Committee*

*Compensation      Committee*

*Corporate      Governance Committee*

*Nominating      Committee*

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*Table            of Contents*

*Pension      Committee*

*Ad      Hoc Pricing Committee*

**Proposal      1 – ELECTION OF DIRECTORS**

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*Table          of Contents*

**NOMINEES      FOR ELECTION AS**

**DIRECTORS      WITH TERMS EXPIRING IN 2010 – CLASS II**

|   | **ANNETTE                  CATINO,**  age 50, became a director of the Company in                  2003.  She is President and CEO of QualCare Alliance Networks,                  Inc., Piscataway, New Jersey, a managed care organization, since                  1991, of                  which she serves as a Director.  Ms. Catino is a Director of                  Caucus NJ Educational Corporation, Jersey Shore Medical Center                  Foundation,                  Northfield Savings and The Val Skinner Foundation.  Ms. Catino                  is Chairwoman of the ad hoc Pricing Committee and a Member of the                  Audit                  Committee, the Compensation Committee and the Nominating Committee.                  (1) |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | **WALTER                  G. REINHARD,**  age 61, became a director of the Company                  in 2002.  He is a Partner  of the law firm of Norris,                  McLaughlin & Marcus, P.A. of Bridgewater, New Jersey, since 1984. Mr.                  Reinhard serves as a Director of the Fanwood-Scotch Plains                  YMCA.  Mr. Reinhard is Chairman of the Corporate Governance                  Committee and a Member of the Capital Improvement Committee and                  the                  Pension Committee. (2).                                                                                                                                                                                                                 |

**THE      BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS**

**A      VOTE FOR THE ABOVE CANDIDATES.**

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*Table          of Contents*

**DIRECTORS      WHOSE TERMS CONTINUE BEYOND THE 2007 ANNUAL **

**MEETING      AND WHO ARE NOT SUBJECT TO ELECTION THIS YEAR**

**Class      III – Directors Whose Terms Expire in 2008**

|   | **JOHN                R. MIDDLETON, M.D.,**  age 62, became a director of the                Company in 1999.  He is Chair of the Department of Medicine and                Chief Medical Officer of Raritan Bay Medical Center.  He is a                Fellow of the American College of Physicians and a Fellow of the                Infectious Diseases Society of America.  Dr. Middleton is a                Member of the Audit Committee, the Compensation Committee and the                Corporate Governance Committee. (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | **JEFFRIES                  SHEIN,**  age 67, became a director of the Company in                  1990. He is a Managing Partner of JGT Management Co., LLC, a management                  and investment firm, since 2003 and formerly a Partner of Jacobson,                  Goldfarb & Tanzman Associates, Woodbridge, New Jersey, a commercial                  real estate brokerage firm, since 1972.  He is a Director of                  Raritan Bay Medical Center and a Director of The Provident                  Bank.  Mr. Shein is Chairman of the Compensation Committee and                  the Nominating Committee and a Member of the Corporate Governance                  Committee, Pension Committee and the ad hoc Pricing Committee.                  (1)                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | **J.                  RICHARD TOMPKINS,**  age 68, became a director of the                  Company in 1981.  He has served as Chairman of the Board of the                  Company since May 1990 and was President from May                  1981-2003.  Mr. Tompkins is a past President of the National                  Association of Water Companies and the New Jersey Utilities                  Association.  He is past Director and Chairman of Tidewater                  Utilities, Inc. (TUI), White Marsh Environmental Systems, Inc.,                  (a                  subsidiary of TUI), Pinelands Water Company, Pinelands Wastewater                  Company,                  Utility Service Affiliates, Inc., Utility Service Affiliates (Perth                  Amboy)                  Inc., and Bayview Water Company.  He currently serves as a                  member of the Capital Improvement Committee, the Nominating Committee                  and                  the ad hoc Pricing Committee.  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

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*Table          of Contents*

**DIRECTORS      WHOSE TERMS CONTINUE BEYOND THE 2007 ANNUAL**

** MEETING      AND WHO ARE NOT SUBJECT TO ELECTION THIS      YEAR**

**Class      I – Directors Whose Terms Expire in 2009**

|   | **JOHN                  C. CUTTING,**  age 70, became a director of the Company                  in 1997.  Prior to his retirement he served as Senior Engineer,                  Science Applications International Corporation, specialists in                  information, energy and military systems, Pittsburgh,                  Pennsylvania.  He is Chairman of the Pension Committee and                  Capital Improvement Committee and a Member of the Audit Committee                  and ad                  hoc Pricing Committee.  Mr. Cutting serves as a Director of                  Tidewater Utilities, Inc. (TUI), Tidewater Environmental Services,                  Inc.                  and White Marsh Environmental Systems, Inc. (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | **JOHN                P. MULKERIN,**  age 69, became a director of the Company                is 1997.  Prior to his retirement,                he served as President and Chief Executive Officer of First Sentinel                Bancorp, Inc., Holding Company for First Savings Bank, Perth Amboy,                New                Jersey and was a member of the Boards of Directors of said                Companies.  First Sentinel Bancorp, Inc. was acquired by                Provident Financial Services, Inc., the Holding Company for The Provident                Bank.  Mr. Mulkerin currently serves on the Boards of Directors                of both of those Companies.  Mr. Mulkerin is a Director of                Raritan Bay Medical Center, Daytop Village Foundation, Middlesex                County                College and Catholic Charities of the Diocese of Metuchen.  He                is Chairman of the Audit Committee and the Audit Committee Financial                Expert; and a Member of the Corporate Governance Committee, Nominating                Committee and Pension Committee. (1)                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | **DENNIS                W. DOLL,**  age 48,  was named President and                Chief Executive Officer and became a Director of Middlesex effective                January 1, 2006.  Mr. Doll joined the Company in November 2004                as Executive Vice President.  Prior to joining the Company, Mr.                Doll was employed by Elizabethtown Water Company since 1985, serving                most                recently as a member of the senior leadership team of the Northeast                Region                of American Water, which was comprised of Elizabethtown Water Company,                New                Jersey-American Water Company and Long Island Water Corporation and                included other regulated and non-regulated subsidiaries.  Mr.                Doll serves as Director and Chairman of Tidewater Utilities, Inc.                (TUI),                Tidewater Environmental Services, Inc.; White Marsh Environmental                Systems,                Inc., a subsidiary of TUI; Pinelands Water Company and Pinelands                Wastewater Company; Utility Service Affiliates, Inc., and Utility                Service                Affiliates (Perth Amboy) Inc.  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

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*Table          of Contents*

**SECURITY      OWNERSHIP OF DIRECTORS, MANAGEMENT**

**AND      CERTAIN BENEFICIAL OWNERS**

|                                                                         |   | **Amount                            and Nature**  |
|------------------------------------------------------------------------------|--------|--------------------------------------------------------|
|                                                                         |   | **of                            Beneficial**      |
| **Name**                                                                     |   | **Ownership                            (1**)      |
| Directors                                                                    |   |                                                   |   |
| Annette                            Catino                                    |   |                                                   | 8,306 |   |
| John                            C. Cutting                                   |   |                                                   | 36,611 |   |
| John                            R. Middleton, M.D.                           |   |                                                   | 6,401 |   |
| John                            P. Mulkerin                                  |   |                                                   | 25,000 |   |
| Walter                            G. Reinhard                                |   |                                                   | 2,040 |   |
| Jeffries                            Shein                                    |   |                                                   | 297,865 |   |
| J.                            Richard Tompkins                               |   |                                                   | 37,555 |   |
|                                                                         |   |                                                   |   |   |
|                                                                         |   |                                                   |   |   |
| Named                            Executive Officers                          |   |                                                   |   |   |
| Dennis                            W. Doll                                    |   |                                                   | 9,300 |   |
| A.                            Bruce O’Connor                           |   |                                                   | 27,311 |   |
| Kenneth                            J. Quinn                                  |   |                                                   | 3,033 |   |
| Richard                            M. Risoldi                                |   |                                                   | 9,793 |   |
| Ronald                            F. Williams                                |   |                                                   | 18,011 |   |
|                                                                         |   |                                                   |   |   |
| All                            elected Directors and Executive Officers as a |   |                                                   |   |   |
| group                            including those named above.                |   |                                                   | 481,226 | * |

|   |                                       | **Number                of Shares**     |                        |
|--------|--------------------------------------------|-----------------------------------------|-----------------------------|
|   |                                       | **Beneficially                Owned**   |                        |
|   |                                       | **and                  Nature of**      | **Percent**            |
|   | **Name                and Address**        | **Beneficial                Ownership** | **of                Class** |
|   |                                       |                                    |                        |
|   | Verona                Construction Company | 700,000                                 | 5.31%                       |
|   | Wilmington,                Delaware 19801  |                                    |                        |

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*Table          of Contents*

**PROPOSAL      2 - AMENDMENT TO THE RESTATED CERTIFICATE**

**OF      INCORPORATION TO INCREASE THE AUTHORIZED COMMON STOCK**

**FROM      20,000,000 SHARES TO 40,000,000 SHARES**

**THE      BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE      AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION.**

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*Table          of Contents*

**COMPENSATION      DISCUSSION & ANALYSIS**

|  | **A.** | **Financial                –** Executives are expected to continuously improve total                shareholder returns to ensure competitive performance in relation                to the                Company’s peer group of publicly-traded                companies. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | **B.** | **Operational                –** The Named Executive Officers continue to diligently implement                and manage the Company’s policies, procedures and programs for compliance                with regulatory requirements.  The executives are expected to                attract and retain qualified employees and keep appropriate focus                on                training and development.  The executives fully develop,                implement and manage succession plans. They are expected to maintain                open,                honest and frequent communications with employees at all levels regarding                their professional development, career paths, performance and other                areas                of opportunity for both themselves and, for the Company.  The                executives develop and execute plans to grow the business, in terms                of                both customers and profits.  The Company, through its                executives, continues to manage to high standards for water quality,                service delivery, asset management, and other disciplines.  At                the same time, the executives seek to control operating costs to                the                extent possible, to maximize shareholder returns and to maintain                reasonable customer rates. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | **C.** | **Leadership                –** Named Executive Officers are expected to instill a Company                culture based on ethical behavior, mutual respect, open and honest                communications and a commitment to learning and continued improvement                and                accountability for performance.  By setting an example and “tone                at the top” these values and behaviors are diligently instilled throughout                the Company. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ELEMENTS      OF COMPENSATION**

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*Table            of Contents*

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*Table          of Contents*

| **Summary                  Compensation Table - 2006**           |
|---------------------------------------------------------------------------------------------------------------|
|                                                                                                          |   |   |   |   |   |   |   |   |   |
| Name                  and principal position                                                                  | Year | Salary | Bonus | (1)Stockawards | Option awards | Non-equity                  incentive                  plan compensation | (2) Change                  inpension                  value and non-qualified                  deferred compensation                  earnings |  (3)All                  other compensation | Total |
|                                                                                                          |   | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) |
| Dennis                  W. Doll, President and Principal Executive Officer (PEO)                              | 2006 |   298,477 |  n/a |             28,875 |  n/a |  n/a |       7,494 |   17,630 |    352,477 |
| A.                  Bruce O'Connor, Vice President and Principal Financial Officer                  (PFO)     | 2006 |   188,488 |  n/a |             24,063 |  n/a |  n/a |      25,824 |   15,920 |    254,296 |
| Ronald                  F. Williams, Vice President - Operations and Chief Operating                  Officer | 2006 |   180,969 |  n/a |             19,250 |  n/a |  n/a |      39,836 |  14,484 |    254,539 |
| Richard                  Risoldi, Vice President - Subsidiary Operations                                      | 2006 |   157,704 |  n/a |             25,025 |  n/a |  n/a |     21,793 |   12,778 |    217,300 |
| Kenneth                  J. Quinn, Vice President, General Counsel, Secretary and                  Treasurer  | 2006 |   144,269 |  n/a |             19,250 |  n/a |  n/a |     14,349 |  12,734 |    190,602 |

|  | (1) | The                  amounts in this column reflect the value of restricted stock awards                  made                  on October 2, 2006.  Under the Restricted Stock Plan, however,                  these awards do not vest to the participants until the expiration                  of five                  years from the date of such award.  During such five year                  period, the participants have contingent ownership of such shares,                  including the right to vote the same and to receive dividends                  thereon. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | The                  Company does not have any non-qualified deferred compensation plans                  or                  related earnings. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (3) | The                  detail of "All Other Compensation" recognized for the benefit of                  the Named                  Executive Officers is set forth on Schedule A, as supplemental                  information                  to the Summary Compensation                  Table. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **SCHEDULE                  - A**                                |
|---------------------------------------------------------------------------------------------------------------|
| **SUMMARY                  - ALL OTHER COMPENSATION - 2006**                    |
|                                                                                                          |   |   |   |   |   |   |   |   |   |
|                                                                                                          |   | Dividends                  on Restricted Stock | Personal                  Automobile Use | (4)Group                  Term                  Life Insurance                  Premiums | Board Fees | (4)401(K)                  - Employer                  Match | Clue Dues | SpouseTravel | Total                  - All Other                  Compensation |
| Name                  and principal position                                                                  | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) |
|                                                                                                          |   |   |   |   |   |   |   |   |   |
| Dennis                  W. Doll, President and Principal Executive Officer                                    | 2006 |         464 |    3,070 |     859 |  4,800 |    7,700 |         - | 738 |    17,630 |
| A.                  Bruce O'Connor, Vice President and Principal Financial                  Officer           | 2006 |      4,536 |    2,683 |     418 |         - |    6,317 |   1,000 | 966 |      15,920 |
| Ronald                  F. Williams, Vice President - Operations and Chief Operating                  Officer | 2006 |     4,004 |    3,289 |  1,140 |         - |    6,051 |         - |     - |      14,484 |
| Richard                  Risoldi, Vice President - Subsidiary Operations                                      | 2006 |                        2,601 |     4,589 |     513 |          - |    5,075 |         - |       - |       12,778 |
| Kenneth                  J. Quinn, Vice President, General Counsel, Secretary and                  Treasurer  | 2006 |       1,560 |     4,863 |     856 |         - |   4,830 |          - |    625 |                        12,734 |

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*Table          of Contents*

| **Grants                  of Plan-Based Awards - 2006**               |
|---------------------------------------------------------------------------------------------------------------|
|                                                                                                          |   |   |   |   |   |   |   |   | All                  other |   |
|                                                                                                          |   | Estimated                  future payouts | Estimated                  future payouts | All                  other | option | Exercise |
|                                                                                                          |   | under                  Non-equity | equity                  incentive | stock | awards: | or                  base |
|                                                                                                          |   |  incentive                  plan awards | plan                  awards  | awards: | number                  of | price                  of |
|                                                                                                          | Grant |   |   |   |   |   |   | number                  of | securities | option |
|                                                                                                          | date | Threshold | Target | Maximum | Threshold | Target | Maximum | shares                  or | under-lying | awards |
|                                                                                                          |   |   |   |   |   |   |   | units | options |   |
|  Name                                                                                                    |   | ($) | ($) | (#) | ($) | ($) | (#) | (#) | (#) | ($/Sh) |
|                                                                                                          |   |   |   |   |   |   |   |   |   |   |
| Dennis                  W. Doll, President And Principal Executive Officer                                    | 10/2/2006 |  n/a |  n/a |  n/a |  n/a |  n/a |  n/a |           1,500 |  n/a |  n/a |
| A.                  Bruce O'Connor, Vice President and Principal Financial                  Officer           | 10/2/2006 |  n/a |  n/a |  n/a |  n/a |  n/a |  n/a |           1,250 |  n/a |  n/a |
| Ronald                  F. Williams, Vice President - Operations and Chief Operating                  Officer | 10/2/2006 |  n/a |  n/a |  n/a |  n/a |  n/a |  n/a |           1,000 |  n/a |  n/a |
| Richard                  Risoldi, Vice President - Subsidiary Operations                                      | 10/2/2006 |  n/a |  n/a |  n/a |  n/a |  n/a |  n/a |           1,300 |  n/a |  n/a |
| Kenneth                  J. Quinn, Vice President, General Counsel, Secretary and                  Treasurer  | 10/2/2006 |  n/a |  n/a |  n/a |  n/a |  n/a |  n/a |           1,000 |  n/a |  n/a |

| **Outstanding                                      Equity Awards - 2006**                                                                          |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                       | **Option                                      Awards**     |  **Stock                                      Awards**   |
|                                                                                                                                                                                       |   |   |   |   |   |      |
|                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                       | Number                                      of | Number                                      of | Equity |   |   |   |   | Equity                                      incentive | Equity                                      incentive |
|                                                                                                                                                                                       | securities | securities | incentive |   |   | Number                                      of | Market                                      value | plan                                      awards: | plan                                      awards: |
|                                                                                                                                                                                       | underlying | underlying | plan                                      awards: | Option | Option | shares                                      or | of                                      shares or | number                                      of | market                                      or payout |
|                                                                                                                                                                                       | unexercised | unexercised | number                                      of | exercise | expiration | units                                      of | units                                      of stock | unearned | values                                      of unearned |
|                                                                                                                                                                                       | options                                      (#) | options                                      (#) | securities | price | date | stock                                      that | that                                      have not | shares,                                      units or | shares,                                      units or |
|                                                                                                                                                                                       | exercisable | unexercisable | underlying |   |   |  have                                      not | vested | other                                      rights that | other                                      rights that |
|                                                                                                                                                                                       |   |   | unexercised |   |   | vested |   | have                                      not vested | have                                      not vested |
|                                                                                                                                                                                       |   |   | earned                                      options |   |   |   |   |   |   |
| Name                                                                                                                                                                                       | (#) | (#) | (#) | ($) |   | (#) | ($) | (#) | ($) |
|                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |
| Dennis                                      W. Doll, President And Principal Executive                                      Officer                                                        | n/a | n/a | n/a | n/a | n/a |    1,800 |     33,714 | n/a | n/a |
| A.                                      Bruce O'Connor, Vice President and Principal                                      Financial                                      Officer           | n/a | n/a | n/a | n/a | n/a |     6,983 |    130,792 | n/a | n/a |
| Ronald                                      F. Williams, Vice President - Operations and                                      Chief Operating                                      Officer | n/a | n/a | n/a | n/a | n/a |                                         6,016 |     112,680 | n/a | n/a |
| Richard                                      Risoldi, Vice President - Subsidiary Operations                                                                                               | n/a | n/a | n/a | n/a | n/a |    4,483 |                                           83,967 | n/a | n/a |
| Kenneth                                      J. Quinn, Vice President, General Counsel,                                      Secretary and                                      Treasurer  | n/a | n/a | n/a | n/a | n/a |                                         3,033 |                                           56,808 | n/a | n/a |

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*Table          of Contents*

| **Option                  Exercises and Stock Vested  - 2006**                  |
|---------------------------------------------------------------------------------------------------------------|
|                                                                                                          | **Option                  Awards**  | **Stock                  Awards**  |
|                                                                                                          |   |   |   |   |
|    Name                                                                                        | Number                  of shares                  acquired                  on                  exercise | Value                  realized                  on exercise | Number                  of                  shares acquired                  on vesting | Value                  realized                  on vesting |
|                                                                                                          | (#) | ($) | (#) | ($) |
|                                                                                                          |   |   |   |   |
| Dennis                  W. Doll, President And Principal Executive Officer                                    | n/a | n/a |     - |          - |
| A.                  Bruce O'Connor, Vice President and Principal Financial                  Officer           | n/a | n/a | 800 | 15,320 |
| Ronald                  F. Williams, Vice President - Operations and Chief Operating                  Officer | n/a | n/a | 800 | 15,320 |
| Richard                  Risoldi, Vice President - Subsidiary Operations                                      | n/a | n/a | 400 |  7,660 |
| Kenneth                  J. Quinn, Vice President, General Counsel, Secretary and                  Treasurer  | n/a | n/a |     - |                          - |

| **Pension                  Benefits - 2006**                                                                  |
|---------------------------------------------------------------------------------------------------------------|
|   Name                                                                                              |   Plan | Number                  of years credited                  service (#) | Present                  value of accumulated                  benefit($) | Payments                  during last fiscal                  year($) |
| Dennis                  W. Doll, President and Principal Executive Officer                                    | MWC                  Pension Plan | 2 |       13,741 | 0 |
| A.                  Bruce O'Connor, Vice President and Principal Financial                  Officer           | MWC                  Pension Plan | 17 |    124,144 | 0 |
| Ronald                  F. Williams, Vice President - Operations and Chief Operating                  Officer | MWC                  Pension Plan | 12 |     170,571 | 0 |
| Richard                  Risoldi, Vice President - Subsidiary Operations                                      | MWC                  Pension Plan | 17 |       93,145 | 0 |
| Kenneth                  J. Quinn, Vice President, General Counsel, Secretary and                  Treasurer  | MWC                  Pension Plan | 5 |       47,419 | 0 |

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*Table            of Contents*

| **Director                      Compensation - 2006** |
|-------------------------------------------------------|
|  Name                                       |  Fees                      earnedorpaid                      incash($) |  Stock                      awards($) |  Optionawards($) |  Non-equityIncentive plancompensation($) |  Change                      inpension                      valueand                      non-qualifieddeferredcompensationearnings($) |  All other                      compensation($) |   Total ($) |
| Annette                      Catino                   |    28,600 | n/a | n/a | n/a | n/a | - |      28,600 |
| John                      C. Cutting                  |    30,100 | n/a | n/a | n/a | n/a | - |      30,100 |
| John                      R. Middleton, M.D.          |    28,100 | n/a | n/a | n/a | n/a | - |      28,100 |
| Stephen                      H. Mundy                 |                                 6,500  (1) | n/a | n/a | n/a | n/a | - |        6,500 |
| John                      P. Mulkerin                 |    31,100 | n/a | n/a | n/a | n/a | - |      31,100 |
| Walter                      G. Reinhard               |    26,800 | n/a | n/a | n/a | n/a | - |      26,800 |
| Jeffries                      Shein                   |    30,600 | n/a | n/a | n/a | n/a | - |      30,600 |
| Dennis                      G. Sullivan               |                                  7,200  (2) | n/a | n/a | n/a | n/a |    128,125                      (3) |    135,325 |
| J.                      Richard Tompkins              |    35,100 | n/a | n/a | n/a | n/a |    119,372                      (4) |    154,472 |

|   | (1) | Mr.                      Mundy earned the fees as a Director                      Emeritus. |
|--------|-----|---------------------------------------------------------------------------------------------|

|   | (2) | Mr.                      Sullivan’s term as a Director expired at the May 24, 2006 Annual Meeting                      of Shareholders. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Fees                      paid to Mr. Sullivan under a Consulting Agreement which terminated                      March                      31, 2006 ($80,000), as well as the value of a Restricted Stock                      award made                      to Mr. Sullivan October 2, 2006 ($48,125) for services rendered                      in                      2005. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Fees                      paid to Mr. Tompkins under a Consulting Agreement ($50,000),                      as well as                      the value of a final installment of Restricted Stock released                      to Mr.                      Tompkins in February 2006 ($69,372) and which had been awarded                      prior to                      his retirement in 2003. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | Note: | Dennis                      W. Doll, who is also a director, does not appear on this table                      since his                      director compensation appears in the                      “All      Other Compensation” column of the                      Summary Compensation Table. |
|--|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**DIRECTORS’      ANNUAL RETAINER AND MEETING FEES**

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*Table          of Contents*

**CHANGE      IN CONTROL AGREEMENTS**

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*Table            of Contents*

| Name                                                                                                                        | Compensation                      paid during                      calendar year 2006                      (using definition of                      “Compensation” under                      the Agreement) | TerminationBefore                      ThirdAnniversary                      (1) | TerminationAfter                      ThirdAnniversary                      (2) |
|-----------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------|---------------------------------------------------------------------------------|
| Dennis                      W. Doll, President and Principal Executive Officer                                              | $249,842                                                                                                                                                                                                                       |    $                      1,388,555                               | $                      920,101                                                  |
| A.                      Bruce O’Connor , Vice President and Principal Financial                      Officer          | $208,932                                                                                                                                                                                                                       | $                      995,581                                                   | $                      603,832                                                  |
| Ronald                      F. Williams, Vice President – Operations and Chief Operating                      Officer | $197,311                                                                                                                                                                                                                       |    $                      1,134,771                               | $                      764,813                                                  |
| Richard                      M. Risoldi, Vice President – Subsidiary Operations                                       | $158,809                                                                                                                                                                                                                       | $                      775,943                                                   | $                      478,175                                                  |
| Kenneth                      J. Quinn, Vice President, General Counsel, Secretary and                      Treasurer        | $143,557                                                                                                                                                                                                                       | $                      767,501                                                   | $                      498,331                                                  |

**COMPENSATION      COMMITTEE INTERLOCKS AND INSIDER      PARTICIPATION**

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*Table          of Contents*

**COMPENSATION      COMMITTEE REPORT**

|   | **Year                2007 Compensation Committee** |
|--------|-----------------------------------------------------|
|   | Jeffries                Shein, Chairman             |
|   | Annette                Catino                       |
|   | John                R. Middleton, M.D.              |

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*Table          of Contents*

**AUDIT      COMMITTEE REPORT**

|   | · | Changes                  in significant accounting policies; |
|--------|--------|--------------------------------------------------------------|

|   | · | The                  process used by management in formulating accounting estimates                  and the                  basis for the auditors’ conclusions regarding the reasonableness of these                  estimates; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Disagreements,                  if any, with management over the application of accounting                  principles; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | Audit                  adjustments; and |
|--------|--------|-----------------------------------------|

|   | · | Disclosures                  in the financial statements. |
|--------|--------|-----------------------------------------------------------|

|   | **Year                2007 Audit Committee** |
|--------|----------------------------------------------|
|   | John                P. Mulkerin, Chairman    |
|   | Annette                Catino                |
|   | John                C. Cutting               |
|   | John                R. Middleton, M.D        |

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*Table          of Contents*

**INDEPENDENT      REGISTERED PUBLIC ACCOUNTING FIRM FEES**

|                                                            |   | Year                              Ended December 31, |    |
|-----------------------------------------------------------------|--------|------------------------------------------------------|---------|
|                                                            |   | 2006                                                 |    |   | 2005 |   |
|                                                            |   |                                                 |    |   |   |   |
| Audit                              Fees {a}                     |   | $                                                    | 328,865 |   |   | $ | 516,000 |   |
| Audit-Related                              Fees                 |   |                                                 | -       |   |   |   | - |   |
|                                                            |   |                                                 |    |   |   |   |   |   |
| Total                              audit and audit-related fees |   | $                                                    | 328,865 |   |   | $ | 516,000 |   |
|                                                            |   |                                                 |    |   |   |   |   |   |
| Tax                              Fees {b}                       |   | $                                                    | 13,470  |   |   | $ | 22,275 |   |
| All                              Other Fees                     |   |                                                 | -       |   |   |   | - |   |
| Total                              Fees                         |   | $                                                    | 342,335 |   |   | $ | 538,275 |   |

**INDEPENDENT      REGISTERED PUBLIC ACCOUNTING FIRM**

**ATTENDANCE      AT ANNUAL MEETING**

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*Table          of Contents*

**STOCKHOLDER      PROPOSALS**

**OTHER      MATTERS**

**MINUTES      OF 2006 MEETING OF STOCKHOLDERS**

|   | By                      Order of the Board of Directors, |
|--------|----------------------------------------------------------|
|   |                                                     |
|   | KENNETH                      J. QUINN                    |
|   | Vice                      President, General Counsel,    |
|   | Secretary                      and Treasurer             |

**The      Company is subject to the informational requirements of the Securities Exchange      Act of 1934 and files an Annual Report on Form 10-K with the Securities and      Exchange Commission.  Additional copies of the 2006 Annual Report on      Form 10-K filed by the Company, including the financial statements and      schedules, but without exhibits, can be mailed without charge to any      shareholders.  The exhibits are obtainable from the Company upon      payment of the reasonable cost of copying such exhibits.  The 2006      Annual Report on Form 10-K can also be found on the Company website at      www.middlesexwater.com.  Shareholders can request this information by      phone at 732-634-1500, ext. 216, e-mail kquinn@middlesexwater.com or by mail      to      Kenneth J. Quinn, Vice President, General Counsel, Secretary and Treasurer,      Middlesex Water Company, 1500 Ronson Road, P.O. Box 1500, Iselin, New      Jersey  08830-0452.**

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*Table          of Contents*

**EXHIBIT      A**

**AUDIT      COMMITTEE CHARTER**

**PREAMBLE**

**COMPOSITION      AND APPOINTMENT**

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*Table            of Contents*

**COMMITTEE      MEETINGS**

|   | · | The                  Committee shall meet at least four times each                  year. |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | Regularly                  scheduled Committee meetings may be held in conjunction with meetings                  of                  the full Board, provided the Committee meetings abide by all the                  provisions contained herein and all applicable requirements, rules                  and                  regulations of the Sarbanes-Oxley Act of 2002, Nasdaq Marketplace                  listing                  standards and all other applicable federal and state laws, rules                  and                  regulations. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Special                  meetings of the Committee may be called by the Chairman of the                  Committee                  or at the request of any two (2) Committee members.  The                  Chairman of the Board or the Chief Executive Officer may recommend                  to the                  Chairman of the Committee that a special meeting be                  held. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                  Committee may request that members of management or outside consultants                  be                  present to assist the Committee in the performance of its                  duties. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Minutes                  of each meeting will be kept and distributed to the full                  Board. |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

**GENERAL        RESPONSIBILITIES**

|   | · | Review                  the adequacy of the Audit Committee Charter (the “Charter”) annually and                  submit Charter revisions to the Board for consideration and                  approval. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Establish,                  enforce and periodically review procedures designed to identify                  related                  party transactions material to the Company’s financial statements or which                  otherwise require disclosure under applicable listing standards,                  rules,                  regulations or statutes.  The Committee shall review each such                  transaction and shall report to the Board whether the transaction                  is                  approved. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Review                  the Company’s Form 10-K Annual Report and such other filings with the                  Securities and Exchange Commission as the Committee deems necessary                  or                  appropriate, and will recommend to the Board the inclusion of the                  audited                  financial statements in the Company’s Form 10-K Annual Report to the                  Securities and Exchange Commission. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Ascertain                  that the Board and senior officers of the Company have annually                  submitted                  a compliance attestation confirming they have complied with the                  Company’s                  Code of Conduct.  The Committee shall have the sole authority to                  approve waivers of the Company’s Code of Conduct and shall insure that                  such waiver be promptly disclosed to shareholders, along with the                  reasons                  for granting such waiver.  Such disclosure shall be made in the                  Company’s regular public filings, not later than the next periodic report                  and may also be posted on the Company’s                  website. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Ascertain                  that the Chief Executive Officer and the Chief Financial Officer                  are in                  full compliance with Section 404 of the Sarbanes-Oxley Act of 2002                  regarding certain attestations of the financial statements of the                  Company. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Issue                  an annual Audit Committee Report for inclusion in the Company’s Proxy                  Statement. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | · | Investigate                    any matter brought to the Committee’s attention, with the power to engage                    independent counsel, accountants and any other advisors or assistance                    it                    determines necessary to carry out its duties.  The Committee                    shall determine the compensation for such services. The Company is                    obligated to fund, without limit, the |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

|   |   | compensation                and all expenses related to any independent counsel, accountants                and any                other advisors or assistance the Committee retains.  In                addition, the Company shall provide sufficient funding to pay for                the                administrative expenses of the                Committee. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Establish                and maintain procedures for (i) the receipt, retention, and treatment                of                complaints received by the Company regarding accounting, internal                accounting controls, or auditing matters and (ii) the confidential,                anonymous submission by Company employees, officers or directors                of                concerns regarding questionable accounting or auditing                matters.  As part of its responsibilities the Committee shall                insure that the Company communicates such procedures to all employees,                officers and directors at least                annually. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Review                and approve the risk assessment and related methodology, audit plan/budget                and organizational structure of the Audit Department at least                annually.  The Committee will also approve any changes made                during the year to the risk assessment or audit                plan/budget.  Any functions normally performed by the Internal                Auditor that are outsourced to a third party will include ongoing                monitoring of the relationship and a review of the independence and                qualifications of such firm/individuals to perform their                assignments. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Review                the performance and approve the appointment and, if necessary, replacement                of the Internal Auditor at least                annually. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                at least a quarterly basis, review and approve significant reports                prepared by the Internal Auditor together with management’s response and                the Internal Auditor’s follow-up to these reports.  The Internal                Auditor, on a quarterly basis, will provide the Committee with a                status of                its audit plan/budget as well as a report on the current status of                significant exceptions noted by the Internal                Auditor. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Perform                such additional activities and consider such other matters within                or                beyond the scope of its responsibilities as required by the Company’s                Charter or By-laws, the Board, or applicable listing standards, rules,                regulations or statutes. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**INDEPENDENT      AUDITOR OVERSIGHT RESPONSIBILITIES**

|   | · | Have                sole authority to engage, review (at least annually), dismiss and                replace                the Company’s Independent Auditors.  The Committee shall have                sole authority to review and set the fees to be paid to the Company’s                Independent Auditors. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Have                the sole authority to preapprove each permitted non-audit service                to be                performed by the Independent Auditors.  As part of the exercise                of that authority, the Committee shall adopt a written policy governing                the preapproval of non-audit services to be performed by the Independent                Auditors.  Any approval by the Committee of such services shall                be disclosed to investors in periodic reports required.  The                Committee shall have authority to delegate preapproval authority                of                Independent Auditor non-audit services to one (1) or more of its                members.  The decisions of any member(s) to whom authority is                delegated shall be presented to the full Committee at each of its                scheduled meetings. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Meet                with the Independent Auditors and financial management of the Company                to                oversee and review the scope of the proposed audit for the current                year                and the audit procedures to be utilized, and at the conclusion thereof,                review such audit, including any comments or recommendations of the                Independent Auditors. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | It                is understood that the Independent Auditors are ultimately accountable                to                the Board and the Committee, and that the Committee has the ultimate                power                to appoint or remove the Independent                Auditors. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Review                the financial statements contained in the annual shareholders report,                as                well as major accounting reserves, with management and the Independent                Auditors to ascertain that management and the Independent Auditors                are                satisfied with the disclosure and content of the financial statements                to                be presented to the shareholders.  Any changes in accounting                principles will also be reviewed. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Review                with the Independent Auditors and financial and accounting personnel                the                adequacy and effectiveness |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

|   |   |   |
|--------|--------|--------|
|   |   |   |
|--------|--------|--------|
|   |   | of                  the accounting and financial controls of the Company, and elicit                  any                  recommendations for the improvement of such internal control procedures                  or                  particular areas where new or more detailed controls or procedures                  are                  desirable. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Obtain                  from the Independent Auditors a formal written statement regarding                  the                  Independent Auditors full compliance with all applicable provisions                  of the                  Sarbanes-Oxley Act of 2002, including, but not limited to, all“Auditor                  Independence” provisions. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Provide                  opportunity for the Independent Auditors to meet with members of                  the                  Committee without members of management present.  Among the                  items to be discussed in these meetings will be the Independent                  Auditors’evaluation of the Company’s financial and accounting policies and                  the cooperation that the Independent Auditors received during the                  course                  of the audit. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Issue                  a report to be included in the Company’s Proxy Statement indicating that                  it has reviewed the audited financial statements with management                  and the                  Independent Auditors (including a discussion of the quality of                  the                  accounting principles and significant judgments affecting the financial                  statements).  The Committee shall state whether it has met                  privately to discuss the information obtained from management and                  the                  Independent Auditors, and, in reliance on that review, whether                  or not it                  has recommended to the Board that the audited financial statements                  be                  included in the Company’s Annual Report on Form 10-K for filing with the                  Securities and Exchange                  Commission. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

**EXHIBIT      B**

**PROPOSED      AMENDMENT OF THE FIRST SENTENCE OF**

**ARTICLE      7A OF THE RESTATED CERTIFICATE OF INCORPORATION**

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*Table          of Contents*

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*Table          of Contents*

| ý | **PLEASE                    MARK VOTES****AS                    IN THIS EXAMPLE** | **REVOCABLE                    PROXY****MIDDLESEX                    WATER COMPANY** |   | **For** | **With-****hold** | **For                    All****Except** |
|--------|-----------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|--------|---------|-------------------|------------------------------------------|

| **ANNUAL                      MEETING OF SHAREHOLDERS****MAY                      23, 2007**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 1.** **Election                      of Directors, Nominees for Class II term expiring in 2010                      are:                                                                                                                                                                                      | **o**                                                                                                                                                                                                                                                                                              | **o**   | **o**       |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|-------------|
| The                      undersigned stockholder(s) hereby appoint(s) John R. Middleton,                      M.D. and                      J. Richard Tompkins, and each of them, proxies, with the power                      to appoint                      his substitute, and hereby authorizes them to represent and                      to vote as                      designated, all the shares of common stock of Middlesex Water                      Company held                      on record by the undersigned on March 15, 2007, at the Annual                      Meeting of                      Shareholders to be held on May 23, 2007, at 11:00 a.m., local                      time or any                      adjournment thereof. |   | Annette                      Catino and Walter G. Reinhard **INSTRUCTION:                      To withhold authority to vote for any individual ­nominee, mark “For                      All Except” and write that nominee’s name in the space provided                      below.** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                               | **For** | **Against** | **Abstain** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                                                                                               | 2.** **Approval                      of an Amendment to the Restated Certificate of Incorporation                      to increase                      the total authorized Common Stock, No par Value from 20,000,000                      to                      40,000,000 shares.  | **o**   | **o**       | **o** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                                                                                               | In                      their discretion, the Proxies are authorized to vote upon such                      other                      business that may properly come before the meeting.                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                                                                                               | **PLEASE                      CHECK BOX IF YOU PLAN  ****TO                      ATTEND THE MEETING  **a****                                                                                                                                                                   | **o**   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                                                                                               |  If                      this Proxy is properly executed and returned, the shares represented                      hereby will be voted. If not otherwise specified, this Proxy                      will be voted                      FOR the persons nominated as directors.          |
| Please                      be sure to sign and datethis                      Proxy in the box below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Date   |                                                                                                                                                                                                                                                                                                               | **THIS                      PROXY IS SOLICITED ON BEHALF OF THE BOARD OF                      ­DIRECTORS.**                                                                                                                                                                              |
|  Shareholder                      sign                      above              Co-holder                      (if any) sign above                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                               |    |        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                               |    |        |   |

**Ç Detach        above card, sign, date and mail in postage paid envelope provided. Ç**

|   | **MIDDLESEX                                    WATER COMPANY****c/o                                    Registrar and Transfer Company****10                                    Commerce Drive****Cranford,                                    New Jersey 07016-3572****www.middlesexwater.com** |   |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|                                                                                                                                                                                                                                                                                                                                                                                                 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| PLEASE                  DATE AND SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR ON THIS                  PROXY.                                                                                                                                                                                                                                                                                      |
| When                  signing as attorney, executor, administrator, trustee or guardian,                  please                  give full title as such. If signer is a corporation, please sign                  full                  corporate name by authorized officer and attach a corporate seal.                  For                  joint account, each joint owner should sign.  |
| **PLEASE                  ACT PROMPTLY**                                                                                                                                                                                                                                                                                                                                                             |
| **BE                  SURE TO COMPLETE, SIGN AND RETURN THIS PROXY, WHETHER OR NOT YOU                  ELECT TO                  BE PRESENT**                                                                                                                                                                                                                                                       |
| **IN                  PERSON. ALL SIGNATURES MUST APPEAR EXACTLY AS NAMES APPEAR ON THIS                  PROXY.**                                                                                                                                                                                                                                                                                   |
| **THANK                  YOU**                                                                                                                                                                                                                                                                                                                                                                       |

***Annual        Meeting of Shareholders – May 23, 2007, at 11:00 a.m.***

**Middlesex        Water Company – 1500 Ronson Rd., Iselin, NJ**

|   |   |
|--------|--------|
|   |   |
|   |   |