----

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**UNITED      STATES SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,      DC 20549**

**FORM      10-Q**

| (Mark                One) |                                                                                                                                 |
|---------------------------|--------------------------------------------------------------------------------------------------------------------------------------|
| þ                    | QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 |
|                      |                                                                                                                                 |

**For      the quarterly period ended June 30, 2007**

|  ̈ |  TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

**MIDDLESEX      WATER COMPANY**

| **New                Jersey**(State                of incorporation) | **22-1114430**(IRS                employer identification no.) |
|----------------------------------------------------------------------|----------------------------------------------------------------|

**1500      Ronson Road, Iselin, NJ  08830**

**(732)      634-1500**

| Large                accelerated filer  ̈ | Accelerated                filer þ | Non-accelerated                filer  ̈ |
|-----------------------------------------------|-----------------------------------------|---------------------------------------------|

----

----

----

D

| **PART                I.**  | **FINANCIAL                INFORMATION**                                                                                           | **PAGE** |
|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------|----------|
|                        |                                                                                                                               |     |
| Item                1.      | Financial                Statements:                                                                                               |     |
|                        |                                                                                                                               |     |
|                        | Condensed                Consolidated Statements of Income                                                                         | 1        |
|                        |                                                                                                                               |     |
|                        | Condensed                Consolidated Balance Sheets                                                                               | 2        |
|                        |                                                                                                                               |     |
|                        | Condensed                Consolidated Statements of Cash                Flows                                                      | 3        |
|                        |                                                                                                                               |     |
|                        | Condensed                Consolidated Statements of Capital Stock and                Long-term Debt                                | 4        |
|                        |                                                                                                                               |     |
|                        | Notes                to Unaudited Condensed Consolidated Financial                Statements                                       | 5        |
|                        |                                                                                                                               |     |
| Item                2.      | Management's                Discussion and Analysis of Financial Condition and Results                of                Operations | 11       |
|                        |                                                                                                                               |     |
| Item                3.      | Quantitative                and Qualitative Disclosures of Market                Risk                                              | 17       |
|                        |                                                                                                                               |     |
| Item                4.      | Controls                and Procedures                                                                                             | 17       |
|                        |                                                                                                                               |     |
| **PART                II.** | **OTHER                INFORMATION**                                                                                               |     |
|                        |                                                                                                                               |     |
| Item                1.      | Legal                Proceedings                                                                                                   | 18       |
|                        |                                                                                                                               |     |
| Item                1A.     | Risk                Factors                                                                                                        | 18       |
|                        |                                                                                                                               |     |
| Item                2.      | Changes                in Securities                                                                                               | 18       |
|                        |                                                                                                                               |     |
| Item                3.      | Defaults                upon Senior Securities                                                                                     | 18       |
|                        |                                                                                                                               |     |
| Item                4.      | Submission                of Matters to a Vote of Security                Holders                                                  | 18       |
|                        |                                                                                                                               |     |
| Item                5.      | Other                Information                                                                                                   | 19       |
|                        |                                                                                                                               |     |
| Item                6.      | Exhibits                                                                                                                           | 19       |
|                        |                                                                                                                               |     |
| **SIGNATURE**               |                                                                                                                               | 19       |

----

*Index*

| ** MIDDLESEX                  WATER COMPANY**                       |
|--------------------------------------------------------------------------------------------------------------------------------------|
| **CONDENSED                  CONSOLIDATED STATEMENTS OF INCOME**                                  |
| (Unaudited)(In                  thousands except per share                  amounts)         |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                 |   | **Three                  Months Ended June 30,** |   |   | **Six                  Months Ended June 30,** |   |
|                                                                                                                                 |   | **2007** |   |   | **2006** |   |   | **2007** |   |   | **2006** |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  Revenues                                                                                                  |   | **$** | **21,745** |   |   | **$** | **21,037** |   |   | **$** | **40,732** |   |   | **$** | **39,267** |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  Expenses:                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operations                                                                                                                           |   | ** ** | **10,143** |   |   | ** ** | **10,012** |   |   | ** ** | **20,335** |   |   | ** ** | **19,658** |   |
| Maintenance                                                                                                                          |   | ** ** | **1,037** |   |   | ** ** | **794** |   |   | ** ** | **2,015** |   |   | ** ** | **1,533** |   |
| Depreciation                                                                                                                         |   | ** ** | **1,875** |   |   | ** ** | **1,713** |   |   | ** ** | **3,720** |   |   | ** ** | **3,381** |   |
| Other                  Taxes                                                                                                         |   | ** ** | **2,411** |   |   | ** ** | **2,369** |   |   | ** ** | **4,662** |   |   | ** ** | **4,573** |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Operating Expenses                                                                                            |   | ** ** | **15,466** |   |   | ** ** | **14,888** |   |   | ** ** | **30,732** |   |   | ** ** | **29,145** |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  Income                                                                                                    |   | ** ** | **6,279** |   |   | ** ** | **6,149** |   |   | ** ** | **10,000** |   |   | ** ** | **10,122** |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                  Income:                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance                  for Funds Used During Construction                                                                        |   | ** ** | **140** |   |   | ** ** | **115** |   |   | ** ** | **252** |   |   | ** ** | **228** |   |
| Other                  Income                                                                                                        |   | ** ** | **282** |   |   | ** ** | **41** |   |   | ** ** | **508** |   |   | ** ** | **99** |   |
| Other                  Expense                                                                                                       |   | ** ** | **(8** | **)** |   | ** ** | **(13** | **)** |   | ** ** | **(12** | **)** |   | ** ** | **(14** | **)** |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Other Income, net                                                                                             |   | ** ** | **414** |   |   | ** ** | **143** |   |   | ** ** | **748** |   |   | ** ** | **313** |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Charges                                                                                                    |   | ** ** | **1,698** |   |   | ** ** | **1,808** |   |   | ** ** | **3,081** |   |   | ** ** | **3,323** |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  before Income Taxes                                                                                          |   | ** ** | **4,995** |   |   | ** ** | **4,484** |   |   | ** ** | **7,667** |   |   | ** ** | **7,112** |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  Taxes                                                                                                        |   | ** ** | **1,682** |   |   | ** ** | **1,517** |   |   | ** ** | **2,583** |   |   | ** ** | **2,332** |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Income                                                                                                          |   | ** ** | **3,313** |   |   | ** ** | **2,967** |   |   | ** ** | **5,084** |   |   | ** ** | **4,780** |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred                  Stock Dividend Requirements                                                                               |   | ** ** | **62** |   |   | ** ** | **62** |   |   | ** ** | **124** |   |   | ** ** | **124** |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                  Applicable to Common Stock                                                                                 |   | **$** | **3,251** |   |   | **$** | **2,905** |   |   | **$** | **4,960** |   |   | **$** | **4,656** |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                  per share of Common Stock:                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                |   | **$** | **0.25** |   |   | **$** | **0.25** |   |   | **$** | **0.38** |   |   | **$** | **0.40** |   |
| Diluted                                                                                                                              |   | **$** | **0.24** |   |   | **$** | **0.25** |   |   | **$** | **0.37** |   |   | **$** | **0.40** |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average                  Number of                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                  Shares Outstanding :                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                |   | ** ** | **13,191** |   |   | ** ** | **11,611** |   |   | ** ** | **13,184** |   |   | ** ** | **11,602** |   |
| Diluted                                                                                                                              |   | ** ** | **13,522** |   |   | ** ** | **11,942** |   |   | ** ** | **13,515** |   |   | ** ** | **11,933** |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  Dividends Paid per Common Share                                                                                |   | **$** | **0.1725** |   |   | **$** | **0.1700** |   |   | **$** | **0.3450** |   |   | **$** | **0.3400** |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                  Notes to Condensed Consolidated Financial Statements.                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Index*

| **MIDDLESEX                  WATER COMPANY**                              |
|--------------------------------------------------------------------------------|
| **CONDENSED                  CONSOLIDATED BALANCE SHEETS**           |
| **(Unaudited)**                                                           |
| **(In                  thousands)**                                       |
|                                                                           |   |   |   | **June                  30,** |   |   | **December                  31,** |   |
| **ASSETS**                                                                     |   |   | **2007** |   |   | **2006** |   |
| **UTILITY                  PLANT:**                                            | Water                  Production |   | **$** | **97,588** |   |   | $ | 95,324 |   |
| ** **                                                                     |   |   | Transmission                  and Distribution |   | ** ** | **250,753** |   |   |   | 243,959 |   |
|                                                                           |   |   | General |   | ** ** | **24,627** |   |   |   | 25,153 |   |
|                                                                           |   |   | Construction                  Work in Progress |   | ** ** | **8,216** |   |   |   | 6,131 |   |
|                                                                           |   |   | TOTAL |   | ** ** | **381,184** |   |   |   | 370,567 |   |
|                                                                           |   |   | Less                  Accumulated Depreciation |   | ** ** | **62,199** |   |   |   | 59,694 |   |
|                                                                           |   |   | UTILITY                  PLANT - NET |   | ** ** | **318,985** |   |   |   | 310,873 |   |
|                                                                           |   |   |   |   | ** ** |   |   |   |   |   |   |
| **CURRENT                  ASSETS:**                                           | Cash                  and Cash Equivalents |   | ** ** | **2,519** |   |   |   | 5,826 |   |
|                                                                           |   |   | Accounts                  Receivable, net |   | ** ** | **10,470** |   |   |   | 8,538 |   |
|                                                                           |   |   | Unbilled                  Revenues |   | ** ** | **5,559** |   |   |   | 4,013 |   |
|                                                                           |   |   | Materials                  and Supplies (at average cost) |   | ** ** | **1,445** |   |   |   | 1,306 |   |
|                                                                           |   |   | Prepayments |   | ** ** | **1,636** |   |   |   | 1,229 |   |
|                                                                           |   |   | TOTAL                  CURRENT ASSETS |   | ** ** | **21,629** |   |   |   | 20,912 |   |
|                                                                           |   |   |   |   | ** ** |   |   |   |   |   |   |
| **DEFERRED                  CHARGES**                                          | Unamortized                  Debt Expense |   | ** ** | **2,954** |   |   |   | 3,014 |   |
| **AND                  OTHER ASSETS:**                                         | Preliminary                  Survey and Investigation Charges |   | ** ** | **5,026** |   |   |   | 3,436 |   |
|                                                                           |   |   | Regulatory                  Assets |   | ** ** | **20,387** |   |   |   | 18,342 |   |
|                                                                           |   |   | Restricted                  Cash |   | ** ** | **6,227** |   |   |   | 6,850 |   |
|                                                                           |   |   | Non-utility                  Assets - Net |   | ** ** | **6,656** |   |   |   | 6,255 |   |
|                                                                           |   |   | Other |   | ** ** | **410** |   |   |   | 585 |   |
|                                                                           |   |   | TOTAL                  DEFERRED CHARGES AND OTHER ASSETS |   | ** ** | **41,660** |   |   |   | 38,482 |   |
|                                                                           |   |   | TOTAL                  ASSETS |   | **$** | **382,274** |   |   | $ | 370,267 |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |
| **CAPITALIZATION                  AND LIABILITIES**                            |   | ** ** |   |   |   |   |   |   |
| **CAPITALIZATION:**                                                            | Common                  Stock, No Par Value |   | **$** | **104,953** |   |   | $ | 104,248 |   |
| ** **                                                                     |   |   | Retained                  Earnings |   | ** ** | **25,399** |   |   |   | 25,001 |   |
| ** **                                                                     |   |   | Accumulated                  Other Comprehensive Income, net of tax |   | ** ** | **80** |   |   |   | 94 |   |
| ** **                                                                     |   |   | TOTAL                  COMMON EQUITY |   | ** ** | **130,432** |   |   |   | 129,343 |   |
|                                                                           |   |   | Preferred                  Stock |   | ** ** | **3,958** |   |   |   | 3,958 |   |
|                                                                           |   |   | Long-term                  Debt |   | ** ** | **130,073** |   |   |   | 130,706 |   |
|                                                                           |   |   | TOTAL                  CAPITALIZATION |   | ** ** | **264,463** |   |   |   | 264,007 |   |
|                                                                           |   |   |   |   | ** ** |   |   |   |   |   |   |
| **CURRENT**                                                                    | Current                  Portion of Long-term Debt |   | ** ** | **2,556** |   |   |   | 2,501 |   |
| **LIABILITIES:**                                                               | Notes                  Payable |   | ** ** | **800** |   |   |   | – |   |
| ** **                                                                     |   |   | Accounts                  Payable |   | ** ** | **7,502** |   |   |   | 5,491 |   |
|                                                                           |   |   | Accrued                  Taxes |   | ** ** | **7,988** |   |   |   | 6,684 |   |
|                                                                           |   |   | Accrued                  Interest |   | ** ** | **1,912** |   |   |   | 1,880 |   |
|                                                                           |   |   | Unearned                  Revenues and Advanced Service Fees |   | ** ** | **707** |   |   |   | 601 |   |
|                                                                           |   |   | Other |   | ** ** | **1,183** |   |   |   | 984 |   |
|                                                                           |   |   | TOTAL                  CURRENT LIABILITIES |   | ** ** | **22,648** |   |   |   | 18,141 |   |
|                                                                           |   |   |   |   | ** ** |   |   |   |   |   |   |
| **COMMITMENTS                  AND CONTINGENT LIABILITIES (Note 7)**           |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   | ** ** |   |   |   |   |   |   |
| **DEFERRED                  CREDITS**                                          | Customer                  Advances for Construction |   | ** ** | **20,501** |   |   |   | 19,246 |   |
| **AND                  OTHER LIABILITIES:**                                    | Accumulated                  Deferred Investment Tax Credits |   | ** ** | **1,774** |   |   |   | 1,813 |   |
|                                                                           |   |   | Accumulated                  Deferred Income Taxes |   | ** ** | **18,053** |   |   |   | 15,779 |   |
|                                                                           |   |   | Employee                  Benefit Plans |   | ** ** | **17,688** |   |   |   | 16,388 |   |
|                                                                           |   |   | Regulatory                  Liability - Cost of Utility Plant Removal |   | ** ** | **6,501** |   |   |   | 6,200 |   |
|                                                                           |   |   | Other |   | ** ** | **514** |   |   |   | 527 |   |
|                                                                           |   |   | TOTAL                  DEFERRED CREDITS AND OTHER LIABILITIES |   | ** ** | **65,031** |   |   |   | 59,953 |   |
|                                                                           |   |   |   |   | ** ** |   |   |   |   |   |   |
| **CONTRIBUTIONS                  IN AID OF ** **CONSTRUCTION**  |   |   | ** ** | **30,132** |   |   |   | 28,166 |   |
|                                                                           |   |   | TOTAL                  CAPITALIZATION AND LIABILITIES |   | **$** | **382,274** |   |   | $ | 370,267 |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |
| See                  Notes to Condensed Consolidated Financial Statements.     |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |

----

*Index*

| **MIDDLESEX                  WATER COMPANY**                                     |
|----------------------------------------------------------------------------------------------------------------|
| **CONDENSED                  CONSOLIDATED STATEMENTS OF CASH FLOWS**                                      |
| **(Unaudited)**                                                                  |
| **(In                  thousands)**                                              |
|                                                                                                           |   |   |   |   |   |   |
|                                                                                                           |   | **Six                  Months Ended June 30,** |   |
|                                                                                                           |   | **2007** |   |   | **2006** |   |
| CASH                  FLOWS FROM OPERATING ACTIVITIES:                                                         |   |   |   |   |   |   |
| Net                  Income                                                                                    |   | **$** | **5,084** |   |   | $ | 4,780 |   |
| Adjustments                  to Reconcile Net Income to                                                        |   |   |   |   |   |   |   |   |
| Net                  Cash Provided by Operating Activities:                                                    |   |   |   |   |   |   |   |   |
| Depreciation                  and Amortization                                                                 |   | ** ** | **4,029** |   |   |   | 3,762 |   |
| Provision                  for Deferred Income Taxes and ITC                                                   |   | ** ** | **235** |   |   |   | (98 | ) |
| Equity                  Portion of AFUDC                                                                       |   | ** ** | **(121** | **)** |   |   | (105 | ) |
|                     Cash Surrender Value of Life Insurance                                      |   |   |  **(205** | **)**  |   |   |  (104 | )  |
| Gain                  on Sale of Real Estate                                                                   |   | ** ** | **(212** | **)** |   |   | - |   |
| Changes                  in Assets and Liabilities:                                                            |   |   |   |   |   |   |   |   |
| Accounts                  Receivable                                                                           |   | ** ** | **(1,555** | **)** |   |   | 431 |   |
| Unbilled                  Revenues                                                                             |   | ** ** | **(1,546** | **)** |   |   | (1,196 | ) |
| Materials                  & Supplies                                                                      |   | ** ** | **(139** | **)** |   |   | (195 | ) |
| Prepayments                                                                                                    |   | ** ** | **(407** | **)** |   |   | (795 | ) |
| Other                  Assets                                                                                  |   | ** ** | **(194** | **)** |   |   | (295 | ) |
| Accounts                  Payable                                                                              |   | ** ** | **2,011** |   |   |   | (1,056 | ) |
| Accrued                  Taxes                                                                                 |   | ** ** | **1,312** |   |   |   | 1,361 |   |
| Accrued                  Interest                                                                              |   | ** ** | **32** |   |   |   | 28 |   |
| Employee                  Benefit Plans                                                                        |   | ** ** | **1,300** |   |   |   | 920 |   |
| Unearned                  Revenue & Advanced Service Fees                                                  |   | ** ** | **106** |   |   |   | 19 |   |
| Other                  Liabilities                                                                             |   | ** ** | **186** |   |   |   | (73 | ) |
|                                                                                                           |   |   |   |   |   |   |   |   |
| NET                  CASH PROVIDED BY OPERATING ACTIVITIES                                                     |   | ** ** | **9,916** |   |   |   | 7,384 |   |
| CASH                  FLOWS FROM INVESTING ACTIVITIES:                                                         |   |   |   |   |   |   |   |   |
| Utility                  Plant Expenditures, Including AFUDC of $131 in 2007 and $123 in                  2006 |   | ** ** | **(8,774** | **)** |   |   | (12,019 | ) |
| Restricted                  Cash                                                                               |   | ** ** | **647** |   |   |   | 98 |   |
| Proceeds                  from Real Estate Dispositions                                                        |   | ** ** | **273** |   |   |   | - |   |
| Preliminary                  Survey & Investigation Charges                                                |   | ** ** | **(1,590** | **)** |   |   | (754 | ) |
|                                                                                                           |   |   |   |   |   |   |   |   |
| NET                  CASH USED IN INVESTING ACTIVITIES                                                         |   | ** ** | **(9,444** | **)** |   |   | (12,675 | ) |
| CASH                  FLOWS FROM FINANCING ACTIVITIES:                                                         |   |   |   |   |   |   |   |   |
| Redemption                  of Long-term Debt                                                                  |   | ** ** | **(711** | **)** |   |   | (555 | ) |
| Proceeds                  from Issuance of Long-term Debt                                                      |   | ** ** | **133** |   |   |   | 1 |   |
| Net                  Short-term Bank Borrowings                                                                |   | ** ** | **800** |   |   |   | 8,600 |   |
| Deferred                  Debt Issuance Expenses                                                               |   | ** ** | **(30** | **)** |   |   | - |   |
| Common                  Stock Issuance Expense                                                                 |   | ** ** | **(15** | **)** |   |   | - |   |
| Restricted                  Cash                                                                               |   | ** ** | **(23** | **)** |   |   | (11 | ) |
| Proceeds                  from Issuance of Common Stock                                                        |   | ** ** | **705** |   |   |   | 767 |   |
| Payment                  of Common Dividends                                                                   |   | ** ** | **(4,547** | **)** |   |   | (3,943 | ) |
| Payment                  of Preferred Dividends                                                                |   | ** ** | **(124** | **)** |   |   | (124 | ) |
| Construction                  Advances and Contributions-Net                                                   |   | ** ** | **33** |   |   |   | (126 | ) |
|                                                                                                           |   |   |   |   |   |   |   |   |
| NET                  CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                           |   | ** ** | **(3,779** | **)** |   |   | 4,609 |   |
| NET                  CHANGES IN CASH AND CASH EQUIVALENTS                                                      |   | ** ** | **(3,307** | **)** |   |   | (682 | ) |
| CASH                  AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                              |   | ** ** | **5,826** |   |   |   | 2,984 |   |
| CASH                  AND CASH EQUIVALENTS AT END OF PERIOD                                                    |   | **$** | **2,519** |   |   | $ | 2,302 |   |
|                                                                                                           |   |   |   |   |   |   |   |   |
|                                                                                                           |   |   |   |   |   |   |   |   |
|                                                                                                           |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL                  DISCLOSURE OF NON-CASH ACTIVITY:                                                 |   |   |   |   |   |   |   |   |
| Utility                  Plant received as Construction Advances and Contributions                             |   | **$** | **2,811** |   |   | $ | 2,095 |   |
|                                                                                                           |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL                  DISCLOSURE OF CASH FLOWS INFORMATION:                                            |   |   |   |   |   |   |   |   |
|    Cash                  Paid During the Year for:                                              |   |   |   |   |   |   |   |   |
| Interest                                                                                                       |   | **$** | **3,098** |   |   | $ | 3,319 |   |
| Interest                  Capitalized                                                                          |   | **$** | **(131** | **)** |   | $ | (123 | ) |
| Income                  Taxes                                                                                  |   | **$** | **1,518** |   |   | $ | 2,040 |   |
|                                                                                                           |   |   |   |   |   |   |   |   |
| See                  Notes to Condensed Consolidated Financial Statements.                                     |   |   |   |   |   |   |   |   |

----

*Index*

| **MIDDLESEX                    WATER COMPANY**                                                                                                                                                                                                                                      |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **CONDENSED                    CONSOLIDATED STATEMENTS OF CAPITAL STOCK**                                                                                                                                                                                                                          |
| **AND                    LONG-TERM DEBT**                                                                                                                                                                                                                                           |
| **(Unaudited)**                                                                                                                                                                                                                                                                |
| **(In                    thousands)**                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                          | **June                    30,** |   |   | **December                    31,** |   |
|                                                                                                                                                                                                                                                                                          | **2007** |   |   | **2006** |   |
| Common                    Stock, No Par Value                                                                                                                                                                                                                                                      |   |   |   |   |   |
|  Shares                    Authorized                    -                                  40,000                                                                                                                           |   |   |   |   |   |
|  Shares                    Outstanding - 2007 - 13,200                                                                                                                                                                                                                                        | **$** | **104,953** |   |   | $ | 104,248 |   |
|                                                            2006                    - 13,168     |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Retained                    Earnings                                                                                                                                                                                                                                                                    | ** ** | **25,399** |   |   |   | 25,001 |   |
| Accumulated                    Other Comprehensive Income, net of tax                                                                                                                                                                                                                                             | ** ** | **80** |   |   |   | 94 |   |
|                                                                                                                                                                                                                                                                                          | **$** | **130,432** |   |   | $ | 129,343 |   |
|                                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Cumulative                    Preference Stock, No Par Value:                                                                                                                                                                                                                                                |   |   |   |   |   |   |   |
|  Shares                    Authorized -                              100                                                                                                                                                                         |   |   |   |   |   |   |   |
|  Shares                    Outstanding - None                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Cumulative                    Preferred Stock, No Par Value                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
|  Shares                    Authorized -      139                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
|  Shares                    Outstanding -                             37                                                                                                                                                                               |   |   |   |   |   |   |   |
| Convertible:                                                                                                                                                                                                                                                                                            |   |   |   |   |   |   |   |
|  Shares                    Outstanding, $7.00 Series - 14                                                                                                                                                                                                                                               | ** ** | **1,457** |   |   |   | 1,457 |   |
|  Shares                    Outstanding, $8.00 Series - 12                                                                                                                                                                                                                                               | ** ** | **1,399** |   |   |   | 1,399 |   |
| Nonredeemable:                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
|  Shares                    Outstanding, $7.00 Series - 1                                                                                                                                                                                                                                           | ** ** | **102** |   |   |   | 102 |   |
|  Shares                    Outstanding, $4.75 Series - 10                                                                                                                                                                                                                                               | ** ** | **1,000** |   |   |   | 1,000 |   |
|     TOTAL                  PREFERRED STOCK                                                                                                                                                                                                                                               | **$** | **3,958** |   |   | $ | 3,958 |   |
|                                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Long-term                    Debt                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| 8.05%,                    Amortizing Secured Note, due December 20, 2021                                                                                                                                                                                                                                     | **$** | **2,849** |   |   | $ | 2,896 |   |
| 6.25%,                    Amortizing Secured Note, due May 22, 2028                                                                                                                                                                                                                                          | ** ** | **8,785** |   |   |   | 8,995 |   |
| 6.44%,                    Amortizing Secured Note, due August 25, 2030                                                                                                                                                                                                                                       | ** ** | **6,487** |   |   |   | 6,627 |   |
| 6.46%,                    Amortizing Secured Note, due September 19, 2031                                                                                                                                                                                                                                    | ** ** | **6,766** |   |   |   | 6,907 |   |
| 4.22%,                    State Revolving Trust Note, due December 31, 2022                                                                                                                                                                                                                                       | ** ** | **707** |   |   |   | 739 |   |
| 3.30%                    to 3.60%, State Revolving Trust Note, due May 1, 2025                                                                                                                                                                                                                                    | ** ** | **3,168** |   |   |   | 3,100 |   |
| 3.49%,                    State Revolving Trust Note, due January 25, 2027                                                                                                                                                                                                                                   | ** ** | **603** |   |   |   | 598 |   |
| 4.03%,                    State Revolving Trust Note, due December 1, 2026                                                                                                                                                                                                                                   | ** ** | **974** |   |   |   | 914 |   |
| 4.00%                    to 5.00%, State Revolving Trust Bond, due September 1, 2021                                                                                                                                                                                                                              | ** ** | **730** |   |   |   | 730 |   |
| 0.00%,                    State Revolving Fund Bond, due September 1, 2021                                                                                                                                                                                                                                   | ** ** | **567** |   |   |   | 577 |   |
| First                    Mortgage Bonds:                                                                                                                                                                                                                                                                |   |   |   |   |   |   |   |
|  5.20%,                    Series S, due October 1, 2022                                                                                                                                                                                                                                                | ** ** | **12,000** |   |   |   | 12,000 |   |
|  5.25%,                    Series T, due October 1, 2023                                                                                                                                                                                                                                                | ** ** | **6,500** |   |   |   | 6,500 |   |
|  6.40%,                    Series U, due February 1, 2009                                                                                                                                                                                                                                               | ** ** | **15,000** |   |   |   | 15,000 |   |
|  5.25%,                    Series V, due February 1, 2029                                                                                                                                                                                                                                               | ** ** | **10,000** |   |   |   | 10,000 |   |
|  5.35%,                    Series W, due February 1, 2038                                                                                                                                                                                                                                               | ** ** | **23,000** |   |   |   | 23,000 |   |
|  0.00%,                    Series X, due September 1, 2018                                                                                                                                                                                                                                              | ** ** | **636** |   |   |   | 647 |   |
|  4.25%                    to 4.63%, Series Y, due September 1, 2018                                                                                                                                                                                                                                     | ** ** | **820** |   |   |   | 820 |   |
|  0.00%,                    Series Z, due September 1, 2019                                                                                                                                                                                                                                              | ** ** | **1,428** |   |   |   | 1,455 |   |
|  5.25%                    to 5.75%, Series AA, due September 1, 2019                                                                                                                                                                                                                                    | ** ** | **1,890** |   |   |   | 1,890 |   |
|  0.00%,                    Series BB, due September 1, 2021                                                                                                                                                                                                                                             | ** ** | **1,774** |   |   |   | 1,805 |   |
|  4.00%                    to 5.00%, Series CC, due September 1, 2021                                                                                                                                                                                                                                    | ** ** | **2,090** |   |   |   | 2,090 |   |
|  5.10%,                    Series DD, due January 1, 2032                                                                                                                                                                                                                                               | ** ** | **6,000** |   |   |   | 6,000 |   |
|  0.00%,                    Series EE, due September 1, 2024                                                                                                                                                                                                                                             | ** ** | **7,420** |   |   |   | 7,482 |   |
|  3.00%                    to 5.50%, Series FF, due September 1, 2024                                                                                                                                                                                                                                    | ** ** | **8,735** |   |   |   | 8,735 |   |
|  0.00%,                    Series GG, due September 1, 2026                                                                                                                                                                                                                                             | ** ** | **1,750** |   |   |   | 1,750 |   |
|  4.00%                    to 5.00%, Series HH, due September 1, 2026                                                                                                                                                                                                                                    | ** ** | **1,950** |   |   |   | 1,950 |   |
|     SUBTOTAL                    LONG-TERM DEBT                                                                                                                                                                                                                                           | ** ** | **132,629** |   |   |   | 133,207 |   |
|     Less:                    Current Portion of Long-term Debt                                                                                                                                                                                                                                | ** ** | **(2,556** | **)** |   |   | (2,501 | ) |
|      TOTAL                    LONG-TERM DEBT                                                                                                                                                                                                                                             | **$** | **130,073** |   |   | $ | 130,706 |   |
|                                                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                    Notes to Condensed Consolidated Financial Statements.                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |

----

*Index*

**MIDDLESEX      WATER COMPANY**

**NOTES      TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**Note      1 – Summary of Significant Accounting Policies**

**Recent      Accounting Pronouncements**

**Note      2 **
** Rate Matters**

----

*Index*

**Note      3 – Capitalization**

**Common      Stock**

**Long-term      Debt**

**Note      4 – Earnings Per Share**

|                                                                         |   | (In                      Thousands Except per Share Amounts)Three                      Months Ended June 30, |   |
|------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------|--------|
| **Basic:**                                                                   |   | 2007                                                                                                         |   |   | Shares |   |   | 2006 |   |   | Shares |   |
| Net                      Income                                              |   | $                                                                                                            | 3,313  |   |   |   | 13,191 |   |   | $ | 2,967 |   |   |   | 11,611 |   |
| Preferred                      Dividend                                      |   |                                                                                                         | (62    | ) |   |   |   |   |   | (62 | ) |   |   |   |
| Earnings                      Applicable to Common Stock                     |   | $                                                                                                            | 3,251  |   |   |   | 13,191 |   |   | $ | 2,905 |   |   |   | 11,611 |   |
|                                                                         |   |                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Basic                      EPS**                                           |   | $                                                                                                            | 0.25   |   |   |   |   |   |   | $ | 0.25 |   |   |   |   |   |
|                                                                         |   |                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Diluted:**                                                                 |   |                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                      Applicable to Common Stock                     |   | $                                                                                                            | 3,251  |   |   |   | 13,191 |   |   | $ | 2,905 |   |   |   | 11,611 |   |
| $7.00                      Series Preferred Dividend                         |   |                                                                                                         | 24     |   |   |   | 167 |   |   |   | 24 |   |   |   | 167 |   |
| $8.00                      Series Preferred Dividend                         |   |                                                                                                         | 24     |   |   |   | 164 |   |   |   | 24 |   |   |   | 164 |   |
| Adjusted                      Earnings Applicable to  Common Stock |   | $                                                                                                            | 3,299  |   |   |   | 13,522 |   |   | $ | 2,953 |   |   |   | 11,942 |   |
|                                                                         |   |                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Diluted                      EPS**                                         |   | $                                                                                                            | 0.24   |   |   |   |   |   |   | $ | 0.25 |   |   |   |   |   |

----

*Index*

|                                                                             |   | Six                          Months Ended June 30, |   |
|----------------------------------------------------------------------------------|--------|----------------------------------------------------|--------|
| **Basic:**                                                                       |   | 2007                                               |   |   | Shares |   |   | 2006 |   |   | Shares |   |
| Net                          Income                                              |   | $                                                  | 5,084  |   |   |   | 13,184 |   |   | $ | 4,780 |   |   |   | 11,602 |   |
| Preferred                          Dividend                                      |   |                                               | (124   | ) |   |   |   |   |   | (124 | ) |   |   |   |
| Earnings                          Applicable to Common Stock                     |   | $                                                  | 4,960  |   |   |   | 13,184 |   |   | $ | 4,656 |   |   |   | 11,602 |   |
|                                                                             |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Basic                          EPS**                                           |   | $                                                  | 0.38   |   |   |   |   |   |   | $ | 0.40 |   |   |   |   |   |
|                                                                             |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Diluted:**                                                                     |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                          Applicable to Common Stock                     |   | $                                                  | 4,960  |   |   |   | 13,184 |   |   | $ | 4,656 |   |   |   | 11,602 |   |
| $7.00                          Series Preferred Dividend                         |   |                                               | 49     |   |   |   | 167 |   |   |   | 49 |   |   |   | 167 |   |
| $8.00                          Series Preferred Dividend                         |   |                                               | 48     |   |   |   | 164 |   |   |   | 48 |   |   |   | 164 |   |
| Adjusted                          Earnings Applicable to  Common Stock |   | $                                                  | 5,057  |   |   |   | 13,515 |   |   | $ | 4,753 |   |   |   | 11,933 |   |
|                                                                             |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Diluted                          EPS**                                         |   | $                                                  | 0.37   |   |   |   |   |   |   | $ | 0.40 |   |   |   |   |   |

**Note      5 – Business Segment Data**

|                                                   |   | (In                Thousands)                            |   |
|--------------------------------------------------------|--------|----------------------------------------------------------|--------|
|                                                   |   | Three                Months EndedJune                30, |   |   | Six                Months EndedJune                30, |   |
| Operations                by Segments:                 |   | 2007                                                     |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
| Revenues:                                              |   |                                                     |   |   |   |   |   |   |   |   |   |   |
|    Regulated                            |   | $                                                        | 19,776 |   |   | $ | 18,663 |   |   | $ | 36,462 |   |   | $ | 34,663 |   |
|    Non                – Regulated |   |                                                     | 2,081  |   |   |   | 2,404 |   |   |   | 4,427 |   |   |   | 4,664 |   |
| Inter-segment                Elimination               |   |                                                     | (112   | ) |   |   | (30 | ) |   |   | (157 | ) |   |   | (60 | ) |
| Consolidated                Revenues                   |   | $                                                        | 21,745 |   |   | $ | 21,037 |   |   | $ | 40,732 |   |   | $ | 39,267 |   |
|  Operating                Income:                 |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Regulated                            |   | $                                                        | 5,951  |   |   | $ | 5,746 |   |   | $ | 9,416 |   |   | $ | 9,449 |   |
|    Non                – Regulated |   |                                                     | 328    |   |   |   | 403 |   |   |   | 584 |   |   |   | 673 |   |
| Consolidated                Operating Income           |   | $                                                        | 6,279  |   |   | $ | 6,149 |   |   | $ | 10,000 |   |   | $ | 10,122 |   |
|                                                   |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Income:                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Regulated                            |   | $                                                        | 3,140  |   |   | $ | 2,740 |   |   | $ | 4,777 |   |   | $ | 4,407 |   |
|    Non                – Regulated |   |                                                     | 173    |   |   |   | 227 |   |   |   | 307 |   |   |   | 373 |   |
| Consolidated                Net Income                 |   | $                                                        | 3,313  |   |   | $ | 2,967 |   |   | $ | 5,084 |   |   | $ | 4,780 |   |

----

*Index*

|                                                   |   |                                            |    |   |                                                |   |    |   |   |   |   |   |
|--------------------------------------------------------|--------|-------------------------------------------------|---------|--------|-----------------------------------------------------|--------|---------|--------|--------|--------|--------|--------|
| Capital                Expenditures:                   |   |                                            |    |   |                                                |   |    |   |   |   |   |   |
|    Regulated                            |   | $                                               | 5,024   |   |                                                | $      | 7,209   |   |   | $      | 8,549  |   |   | $ | 11,801 |   |
|    Non                – Regulated |   |                                            | 130     |   |                                                |   | 200     |   |   |   | 225    |   |   |   | 218 |   |
| Total                Capital Expenditures              |   | $                                               | 5,154   |   |                                                | $      | 7,409   |   |   | $      | 8,774  |   |   | $ | 12,019 |   |
|                                                   |   |                                            |    |   |                                                |   |    |   |   |   |   |   |   |   |
|                                                   |   | As                ofJune                30,2007 |    |   | As                ofDecember                31,2006 |   |    |   |   |   |   |   |   |   |
| Assets:                                                |   |                                            |    |   |                                                |   |    |   |   |   |   |   |   |   |   |   |
|    Regulated                            |   | $                                               | 377,728 |   |                                                | $      | 366,149 |   |   |   |   |   |   |   |   |   |
|    Non                – Regulated |   |                                            | 7,540   |   |                                                |   | 6,808   |   |   |   |   |   |   |   |   |   |
| Inter-segment                Elimination               |   |                                            | (2,994  | )      |                                                |   | (2,690  | )      |   |   |   |   |   |   |   |   |
| Consolidated                Assets                     |   | $                                               | 382,274 |   |                                                | $      | 370,267 |   |   |   |   |   |   |   |   |   |

**Note      6 – Short-term Borrowings**

**Note      7 – Commitments and Contingent Liabilities**

----

*Index*

|                           |   | (In                Thousands)     |   |
|--------------------------------|--------|-----------------------------------|--------|
|                           |   | Three                Months Ended |   |   | Six                Months Ended |   |
|                           |   | June                30,           |   |   | June                30, |   |
|                           |   | 2007                              |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|                           |   |                              |   |   |   |   |   |   |   |   |   |   |
| Purchased                Water |   |                              |   |   |   |   |   |   |   |   |   |   |
| Treated                        |   | $                                 | 539    |   |   | $ | 473 |   |   | $ | 999 |   |   | $ | 935 |   |
| Untreated                      |   |                              | 529    |   |   |   | 492 |   |   |   | 1,128 |   |   |   | 1,059 |   |
| Total                Costs     |   | $                                 | 1,068  |   |   | $ | 965 |   |   | $ | 2,127 |   |   | $ | 1,994 |   |

----

*Index*

**Note      8 – Employee Retirement Benefit Plans**

**Pension      – **

**Postretirement      Benefits Other Than Pensions**

|                                                           |   | (In                Thousands)              |   |
|----------------------------------------------------------------|--------|--------------------------------------------|--------|
|                                                           |   | Pension                Benefits            |   |   | Other                Benefits |   |
|                                                           |   | Three                Months Ended June 30, |   |
|                                                           |   | 2007                                       |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|                                                           |   |                                       |   |   |   |   |   |   |   |   |   |   |
| Service                Cost                                    |   | $                                          | 320    |   |   | $ | 334 |   |   | $ | 205 |   |   | $ | 189 |   |
| Interest                Cost                                   |   |                                       | 453    |   |   |   | 425 |   |   |   | 224 |   |   |   | 201 |   |
| Expected                Return on Assets                       |   |                                       | (456   | ) |   |   | (402 | ) |   |   | (120 | ) |   |   | (83 | ) |
| Amortization                of Unrecognized Losses             |   |                                       | 66     |   |   |   | 62 |   |   |   | 84 |   |   |   | 111 |   |
| Amortization                of Unrecognized Prior Service Cost |   |                                       | -      |   |   |   | 3 |   |   |   | - |   |   |   | - |   |
| Amortization                of Transition Obligation           |   |                                       | 2      |   |   |   | - |   |   |   | 34 |   |   |   | 34 |   |
| Net                Periodic Benefit Cost                       |   | $                                          | 385    |   |   | $ | 422 |   |   | $ | 427 |   |   | $ | 452 |   |
|                                                           |   |                                       |   |   |   |   |
|                                                           |   | Pension                Benefits            |   |   | Other                Benefits |   |
|                                                           |   | Six                Months Ended June 30,   |   |
|                                                           |   | 2007                                       |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|                                                           |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service                Cost                                    |   | $                                          | 639    |   |   | $ | 644 |   |   | $ | 411 |   |   | $ | 366 |   |
| Interest                Cost                                   |   |                                       | 907    |   |   |   | 855 |   |   |   | 448 |   |   |   | 419 |   |
| Expected                Return on Assets                       |   |                                       | (913   | ) |   |   | (816 | ) |   |   | (241 | ) |   |   | (174 | ) |
| Amortization                of Unrecognized Losses             |   |                                       | 131    |   |   |   | 119 |   |   |   | 169 |   |   |   | 240 |   |

----

*Index*

| Amortization                of Unrecognized Prior Service Cost |   |   | -      |   |   |   | 3      |   |   |   | -      |   |   |   | -      |   |
|----------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Amortization                of Transition Obligation           |   |   | 5      |   |   |   | -      |   |   |   | 68     |   |   |   | 68     |   |
| Net                Periodic Benefit Cost                       |   | $      | 769    |   |   | $      | 805    |   |   | $      | 855    |   |   | $      | 919    |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

**Note      9 – Stock Based Compensation**

**Note      10 – Other Comprehensive Income**

|                                                                                              |   | (In                Thousands)     |   |
|---------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                                                              |   | Three                Months Ended |   |   | Six                Months Ended |   |
|                                                                                              |   | June                30,           |   |   | June                30, |   |
|                                                                                              |   | 2007                              |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|                                                                                              |   |                              |   |   |   |   |   |   |   |   |   |   |
| Net                Income                                                                         |   | $                                 | 3,313  |   |   | $ | 2,967 |   |   | $ | 5,084 |   |   | $ | 4,780 |   |
|                                                                                              |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                Comprehensive Income:                                                        |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change                in Value of Equity Investments,  Net                of Income Tax |   |                              | (23    | ) |   |   | --- |   |   |   | (14 | ) |   |   | --- |   |
|      Other                Comprehensive Income                           |   |                              | (23    | ) |   |   | --- |   |   |   | (14 | ) |   |   | --- |   |
|                                                                                              |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive                Income                                                               |   | $                                 | 3,290  |   |   | $ | 2,967 |   |   | $ | 5,070 |   |   | $ | 4,780 |   |

**Item      2.     Management’s Discussion and      Analysis of Financial Condition and Results of Operations**

----

*Index*

**Forward-Looking      Statements**

|   | - | statements                as to expected financial condition, performance, prospects and earnings                of                the Company; |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | statements                regarding strategic plans for                growth; |
|--------|---|--------------------------------------------------------------------------------|

|   | - | statements                regarding the amount and timing of rate increases and other regulatory                matters; |
|--------|---|--------------------------------------------------------------------------------------------------------------------------|

|   | - | statements                regarding expectations and events concerning capital                expenditures; |
|--------|---|-------------------------------------------------------------------------------------------------------------|

|   | - | statements                as to the Company’s expected liquidity needs during fiscal 2007 and beyond                and statements as to the sources and availability of funds to meet                its                liquidity needs; |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | statements                as to expected rates, consumption volumes, service fees, revenues,                margins, expenses and operating                results; |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | statements                as to the Company’s compliance with environmental laws and regulations and                estimations of the materiality of any related                costs; |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | statements                as to the safety and reliability of the Company’s equipment, facilities                and operations; |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------|

|   | - | statements                as to financial projections; |
|--------|---|--------------------------------------------------------|

|   | - | statements                as to the ability of the Company to pay                dividends; |
|--------|---|---------------------------------------------------------------------------------------------|

|   | - | statements                as to the Company’s plans to renew municipal franchises and consents in                the territories it serves; |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | expectations                as to the amount of cash contributions to fund the Company’s retirement                benefit plans, including statements as to anticipated discount rates                and                rates of return on plan assets; |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | statements                as to trends; and |
|--------|---|---------------------------------------------|

|   | - | statements                regarding the availability and quality of our water                supply. |
|--------|---|------------------------------------------------------------------------------------------------------|

|   | - | the                effects of general economic                conditions; |
|--------|---|---------------------------------------------------------------------------|

|   | - | increases                in competition in the markets served by the                Company; |
|--------|---|----------------------------------------------------------------------------------------------|

|   | - | the                ability of the Company to control operating expenses and to achieve                efficiencies in its operations; |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------|

|   | - | the                availability of adequate supplies of                water; |
|--------|---|-------------------------------------------------------------------------------|

|   | - | actions                taken by government regulators, including decisions on base rate                increase                requests; |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | new                or additional water quality                standards; |
|--------|---|--------------------------------------------------------------------------|

|   | - | weather                variations and other natural                phenomena; |
|--------|---|-------------------------------------------------------------------------------|

|   | - | the                existence of attractive acquisition candidates and the risks involved                in                pursuing those acquisitions; |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | acts                of war or terrorism; |
|--------|---|------------------------------------------|

|   | - | significant                changes in the housing starts in                Delaware; |
|--------|---|--------------------------------------------------------------------------------------|

|   | - | the                availability and cost of capital resources;                and |
|--------|---|-----------------------------------------------------------------------------------|

|   | - | other                factors discussed elsewhere in this quarterly                report. |
|--------|---|-------------------------------------------------------------------------------------------|

----

*Index*

**Overview**

**Recent      Developments**

*Rate      Increases*

----

*Index*

**Operating      Results by Segment**

**Results      of Operations – Three Months Ended June 30, 2007**

|                                               |   | (In                Thousands)              |   |
|----------------------------------------------------|--------|--------------------------------------------|--------|
|                                               |   | Three                Months Ended June 30, |   |
|                                               |   | 2007                                       |   |   | 2006 |   |
|                                               |   | Regulated                                  |   |   | Non-Regulated |   |   | Total |   |   | Regulated |   |   | Non-Regulated |   |   | Total |   |
| Revenues                                           |   | $                                          | 19,776 |   |   | $ | 1,969 |   |   | $ | 21,745 |   |   | $ | 18,663 |   |   | $ | 2,374 |   |   | $ | 21,037 |   |
| Operations                and maintenance expenses |   |                                       | 9,631  |   |   |   | 1,549 |   |   |   | 11,180 |   |   |   | 8,921 |   |   |   | 1,885 |   |   |   | 10,806 |   |
| Depreciation                expense                |   |                                       | 1,842  |   |   |   | 33 |   |   |   | 1,875 |   |   |   | 1,683 |   |   |   | 30 |   |   |   | 1,713 |   |
| Other                taxes                         |   |                                       | 2,352  |   |   |   | 59 |   |   |   | 2,411 |   |   |   | 2,313 |   |   |   | 56 |   |   |   | 2,369 |   |
| **  Operating                income**    |   |                                       | 5,951  |   |   |   | 328 |   |   |   | 6,279 |   |   |   | 5,746 |   |   |   | 403 |   |   |   | 6,149 |   |
|                                               |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                income                        |   |                                       | 414    |   |   |   | --- |   |   |   | 414 |   |   |   | 143 |   |   |   | --- |   |   |   | 143 |   |
| Interest                expense                    |   |                                       | 1,672  |   |   |   | 26 |   |   |   | 1,698 |   |   |   | 1,784 |   |   |   | 24 |   |   |   | 1,808 |   |
| Income                taxes                        |   |                                       | 1,553  |   |   |   | 129 |   |   |   | 1,682 |   |   |   | 1,365 |   |   |   | 152 |   |   |   | 1,517 |   |
| **  Net                income**          |   | $                                          | 3,140  |   |   | $ | 173 |   |   | $ | 3,313 |   |   | $ | 2,740 |   |   | $ | 227 |   |   | $ | 2,967 |   |

----

*Index*

**Results      of Operations – Six Months Ended June 30, 2007**

|                                               |   | (In                Thousands)            |   |
|----------------------------------------------------|--------|------------------------------------------|--------|
|                                               |   | Six                Months Ended June 30, |   |
|                                               |   | 2007                                     |   |   | 2006 |   |
|                                               |   | Regulated                                |   |   | Non-Regulated |   |   | Total |   |   | Regulated |   |   | Non-Regulated |   |   | Total |   |
| Revenues                                           |   | $                                        | 36,462 |   |   | $ | 4,270 |   |   | $ | 40,732 |   |   | $ | 34,663 |   |   | $ | 4,604 |   |   | $ | 39,267 |   |
| Operations                and maintenance expenses |   |                                     | 18,846 |   |   |   | 3,504 |   |   |   | 22,350 |   |   |   | 17,432 |   |   |   | 3,759 |   |   |   | 21,191 |   |
| Depreciation                expense                |   |                                     | 3,656  |   |   |   | 64 |   |   |   | 3,720 |   |   |   | 3,324 |   |   |   | 57 |   |   |   | 3,381 |   |
| Other                taxes                         |   |                                     | 4,544  |   |   |   | 118 |   |   |   | 4,662 |   |   |   | 4,458 |   |   |   | 115 |   |   |   | 4,573 |   |
| **  Operating                income**    |   |                                     | 9,416  |   |   |   | 584 |   |   |   | 10,000 |   |   |   | 9,449 |   |   |   | 673 |   |   |   | 10,122 |   |
|                                               |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                income                        |   |                                     | 748    |   |   |   | --- |   |   |   | 748 |   |   |   | 313 |   |   |   | --- |   |   |   | 313 |   |
| Interest                expense                    |   |                                     | 3,030  |   |   |   | 51 |   |   |   | 3,081 |   |   |   | 3,273 |   |   |   | 50 |   |   |   | 3,323 |   |
| Income                taxes                        |   |                                     | 2,357  |   |   |   | 226 |   |   |   | 2,583 |   |   |   | 2,082 |   |   |   | 250 |   |   |   | 2,332 |   |
| **  Net                income**          |   | $                                        | 4,777  |   |   | $ | 307 |   |   | $ | 5,084 |   |   | $ | 4,407 |   |   | $ | 373 |   |   | $ | 4,780 |   |

----

*Index*

**Liquidity      and Capital Resources**

----

*Index*

**Recent      Accounting Pronouncements**

| **Item                3.** | **Quantitative                and Qualitative Disclosures of Market                Risk** |
|----------------------------|-------------------------------------------------------------------------------------------|

| **Item                4.** | **Controls                and Procedures** |
|----------------------------|--------------------------------------------|
|   |   |
|--------|--------|

----

*Index*

**PART      II.  OTHER INFORMATION**

| **Item                1.** | **Legal                Proceedings** |
|----------------------------|--------------------------------------|

| **Item                1A.** | **Risk                Factors** |
|-----------------------------|---------------------------------|

| **Item                2.** | **Changes                in                Securities** |
|----------------------------|---------------------------------------------------------|

| **Item                3.** | **Defaults                Upon Senior                Securities** |
|----------------------------|-------------------------------------------------------------------|

| **Item                4.** | **Submission                of Matters to a Vote of Security                Holders** |
|----------------------------|---------------------------------------------------------------------------------------|

|   | 1. | ELECTION                OF DIRECTORS: |
|--------|----|---------------------------------------|

|   |                              | FOR        | %      | WITHHOLD | %      |   |
|--------|-----------------------------------|------------|--------|----------|--------|--------|
|   |                              |       |   |     |   |   |
|   | Annette                Catino     | 10,662,775 | 93.6   | 729,157  | 6.4    |   |
|   | Walter                G. Reinhard | 10,660,977 | 93.6   | 730,955  | 6.4    |   |

----

*Index*

|   | 2. | Approval                of an Amendment to the Restated Certificate of Incorporation to increase                the total authorized Common Stock, No par Value, from 20,000,00 to                40,000,000 shares |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | FOR        | %      | AGAINST | %      | ABSTAIN | %      |
|--------|------------|--------|---------|--------|---------|--------|
|   |       |   |    |   |    |   |
|   | 10,648,916 | 94.2   | 659,727 | 5.8    | 83,289  | 0.0    |

| **Item                5.** | **Other                Information** |
|----------------------------|--------------------------------------|

| **Item                6.** | **Exhibits** |
|----------------------------|--------------|

| 10.13(h) | Employment                Agreement between Middlesex Water Company and Bernadette M.                Sohler |
|----------|-------------------------------------------------------------------------------------------------------------|

| 31 | Section                302 Certification by Dennis W. Doll pursuant to Rules 13a-14 and                15d-14 of                the Securities Exchange Act of                1934. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.1 | Section                302 Certification by A. Bruce O’Connor pursuant to Rules 13a-14 and 15d-14                of the Securities Exchange Act of                1934. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32 | Section                906 Certification by Dennis W. Doll pursuant to 18 U.S.C. §1350, as                adopted pursuant to Section 302 of the Sarbanes-Oxley Act of                2002. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1 | Section                906 Certification by A. Bruce O’Connor pursuant to 18 U.S.C. §1350, as                adopted pursuant to Section 302 of the Sarbanes-Oxley Act of                2002. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**SIGNATURES**

|   | MIDDLESEX                WATER COMPANY |
|--------|----------------------------------------|
|   |                                   |   |   |
|   | By:                                    | /s/                A. Bruce O’Connor |   |
|   |                                   | A.                Bruce O’Connor |   |
|   |                                   | Vice                President and |   |
|   |                                   | Chief                Financial Officer |   |