“A Provider of Water, Wastewater & Related Services” 

**Today’s Presenters**

Dennis W. Doll, President & CEO 

Bruce O’Connor, Vice President & CFO 

**Forward Looking Statement**

**     Certain matters discussed in this presentation are forward-looking  statements intended to qualify for the “safe harbor” from liability establishedby the Private Securities Litigation Reform Act of 1995.  These forward-looking statements can generally be identified as such because the context of the statement will include words such as the Company “believes,” “anticipates,”“expects” or words of similar import.  Similarly, statements that describe the Company’s future plans, objectives, estimates or goals are also forward-looking statementsthat are subject to the risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements.   **

© Middlesex Water Company

 

**OVERVIEW**

Serve approximately 125,000 retail and wholesale water customers in New Jersey and Delaware 

 Expanded over time to provide a full range of regulated and non-regulated **water, wastewater and related services**

 Cash dividends paid in varying amounts continually since 1912.  

 NASDAQ Global Select Market: **MSEX**

Established in 1897 to collect, treat and distribute water for domestic, commercial, industrial and fire protection purposes

© Middlesex Water Company

**STATS AT A GLANCE**

**52-week low/high:****$16.93/$20.24**

**Market capitalization:****$249.81 million**

**Common shares outstanding:****13.2 million**

**Average daily volume:****30,000 shares****(3 months)**

**Current dividend yield:****3.65%**

**Institutional Ownership:****25%**

As of September 12, 2007

© Middlesex Water Company

 

 

**Investor-Owned Water/Wastewater Industry**

**Capital intensive, high barriers to entry**

Significant need for continued capital investment on a national level 

**Consolidation has left only 11 publicly-traded investor owned-companies (23 ten years ago)**

**54,000 community water systems in the U.S.**

47,000 serve fewer than 3,000 customers each.  

84% of market is government-controlled.  

Consolidation and privatization is expected to continue 

**Rate base/rate of return methodology provides****return of****and****return on****investments plus recovery of operating expenses**

© Middlesex Water Company

**- Background -**

 

**Investor-Owned Water/Wastewater Industry**

**Wastewater is a growing opportunity for**

**    investor-owned water purveyors.**

Skills are complementary 

**Non-regulated contract operations can be**

**    an important part of the menu of services**

**Range of products and services continues to expand**

**Regulated utilities are only one component (related products and services continue to expand).**

**“Water is the next oil.”**

© Middlesex Water Company

**- Background -**

**The Middlesex Story**

© Middlesex Water Company

 

***Build long-term shareholder value by being a trusted provider of safe, reliable and                 cost-effectivewater, wastewater and related products and services in New Jersey, Delaware and beyond.***

**Vision & Strategy**

© Middlesex Water Company

**Total Customers Served – 125,000**

© Middlesex Water Company

 

**What We Do**

Regulated

Non-regulated

© Middlesex Water Company

**What We Do**

**Any Combination Along thePublic/PrivatePartnership Continuum**

**Design**

**Bid**

**Build**

**Private Contract Fee (O&M) Services**

**Design**

**Build**

**Build**

**Operate**

**Transfer**

**Design**

**Build Finance Operate**

**Build**

**Own**

**Operate**

*Public Projects*

*Public Owns We Operate*

*Public Owns & Operates, We Design & Build*

*Public Owns. We Design, Build & Operate*

*Public Owns. We Design, Build, Finance  & Operate (Concession Deal)*

*We Do it All (Traditional Regulated Utility Model)*

**PUBLIC Responsibility**

**PRIVATE Responsibility**

© Middlesex Water Company

 

**Our Services**

**Design, build, own and operate water and wastewater assets**

**Complementary water and wastewater products & services**

**Public/Private partnerships**

**Customers**

**2006**

**Renewable Energy:  Good for the Environment and Good for Business**

**Solar Panels at Our Largest Treatment Plant**

 

**Plentiful and Reliable Supply of Surface Water and Groundwater**

**Building Our Reputation, Drop by Drop**

 

**Emergency Planning & Preparedness**

**Review emergency preparedness plans to ensure the health and safety of our customers.**

**Communicate regularly with local emergency management officials to address crisis planning.**

**Work with State/County Health Departments to plan for the fixed distribution of preventive medication to employees in      an regional emergency.**

**Member - State Water Sector Security Task Force.**

**Community Anti-Terrorism Training  (C.A.T. Eyes).**

© Middlesex Water Company

**Corporate Social Responsibility**

 

**Building Relationships**

**Outreach/Education**

 

**Delivering Shareholder Value**

***Prudent Investment In Regulated Utility Infrastructure***

Rate Base/Rate of Return methodology allows for a return on prudently incurred costs to construct utility assets

**How We Deliver Shareholder Value**

***Acquisition and Development of Regulated and Non-Regulated Businesses and Contracts***

Combine organic customer and utility infrastructure growth with prudent investments in additional regulated utilities, non-regulatedcontract operations and complementary products and services.

 

**Maximizing Shareholder Value**

******Timely/adequate rate case outcomes, minimize  regulatory lag**

******Diligently manage costs and drive down both**

**capital and O&M costs between rate cases**

******Profitable Growth**

**Organic customer growth, economies of scale**

**Acquisitions at*****reasonable prices***

**Complementary non-regulated products and services  with returns greater than achievable in the regulated environment****                     **

**The Challenge is Careful Execution of the Plan!**

**Delaware and  Beyond**

 

******P****rivatizations and acquisitions in NJ, DE andbeyond**

******Significant opportunities in both water and wastewater in DE and beyond**

**Wastewater a key driver of growth**

**Reputation for sound technical solutions spreading beyond NJ & DE**

**Complementary products and services continue to grow (LineCare & LineCare Plus)**

**The Growth Story**

******Solid retail and wholesale revenue base in NJ**

**Experience in water and wastewater contract ops in both NJ and DE**

**Purchased TUI in 1992 with 2,400 customers. Grown to 30,000**

**TUI o****perating in 60 active districts in DE:**

**90+ small plants**

**183 wells**

**270+ communities**

**Entered the regulated wastewater business in 2005**

**The Recent Past**

**The Future**

**Where’s the Wastewater Treatment Plant?**

 

**Wastewater********Plant**

**Critical Facilities Blend into the Landscape**

***ATER************COMPANY***

*********IDDLESEX***

**FINANCIAL**

**OVERVIEW**

 

**Performance****(millions except per share amounts)**

© Middlesex Water Company

******Six  Months**

******Ended June 30,**

******2007**

******2006**

****

**Operating Revenues**

**$ 40.7**

**$ 39.3**

**Operating Expenses**

**$ 30.7**

**$ 29.1**

**Net Income**

**$**

**5.1**

**$**

**4.8**

**Diluted Earnings per Share**

**$**

**0.37**

**$**

**0.40**

**Key Drivers of Performance**

**Rate increases**

**Utility plant investment**

Customer Growth 

Upgrades & Replacements 

**Variable production costs**

Power 

Chemicals 

Purchased Water 

Treatment Residuals 

**Labor and benefits costs**

© Middlesex Water Company

 

**Rate****Increases**

© Middlesex Water Company

**Amount**

**Increase**

****

******($ Millions****)**

**Approved**

****

**Pinelands**

**$0.1**

**4/13/06**

****

**Tidewater**

**$2.1**

**6/27/06**

**(Interim Rates – 15%)**

****

**Tidewater**

**$1.8**

**2/28/07**

**  **

**Customer Growth**

© Middlesex Water Company

 

**Utility Plant****($ millions)**

© Middlesex Water Company

**2007 Capital Investment**

**New Jersey**

**$3.9 million on infrastructure upgrades replacements and RENEW Program**

**Delaware**

**$4.9 million on infrastructure upgrades, replacements and new water and wastewater treatment facilities******

© Middlesex Water Company

 

**Equity Financing**

**Issued 1,495,000 common shares on 11/02/06 for gross proceeds of $27.6 million**

**Dividend Reinvestment Plan**

**            ****$1.2 Million Annual Inflow**

© Middlesex Water Company

**2007 Debt Financing****     State Revolving Fund**

**Delaware****                 ****         - $1.0 Million, 20 Years**

**             ********                    ******

**New Jersey           - $4.0 Million, 20 Years**

**             ******

© Middlesex Water Company

 

**Capital Structure****($ millions)**

© Middlesex Water Company

**% to**

******6/30/2007******

******Total**

****

**LT Debt**

**$  130.4**

**49.3%**

****

**Preferred**

**4.0**

**1.5%**

**Common**

******130.1**

******49.2%**

****

**$  264.5**

**100.0%**

© Middlesex Water Company

**2007 Construction Program******

                         ($ millions)

**Delaware Water Systems**

**$12.1**

**Delaware Wastewater Systems**

**  6.0**

**MWC RENEW Program**

**3.9**

**Other Scheduled Upgrades**

**Total**

**$32.1**

**10.1**

 

**2007 Construction Funding******

                        **($ millions)**

**SRF Loans**

**Short Term**

**Reinvestment Plan**

**Common Stock Offering**

**Net Cash Flows**

**Total Funding**

**   ****6.0**

**  ****6.0**

**1.2**

**8.9**

**    10.0**

**$32.1**

**Dividends**

**Annual Rate**

**Quarterly dividends paid since 1912**

© Middlesex Water Company

**2004**

**2005**

******2006**

******$0.67**

**$0.68**

**$0.69**

 

**Dividends Paid**

**$0.69**

© Middlesex Water Company

**2007 Dividend Yield**

© Middlesex Water Company

**Connecticut Water**

**3.6%**

**Middlesex Water**

**3.6%**

**Artesian Resources**

**3.5%**

**California Water**

**2.9%**

**York Water**

**2.8%**

**Pennichuck Corp.**

**2.7%**

**American States Water**

**2.3%**

**Aqua America**

**2.0%**

**SJW Corp.**

**1.9%**

**Southwest Water**

**1.7%**

 

**2006 Total Shareholder Return***

*Dividends plus change in stock price

© Middlesex Water Company

**SJW Corp.**

**74%**

**American States Water**

**29%**

**Middlesex Water**

**12%**

**California Water**

**9%**

**York Water**

**6%**

**Artesian Resources**

**3%**

**Pennichuck Corp.**

**2%**

**Southwest Water**

**- 2%**

**Connecticut Water**

**- 4%**

**Aqua America**

**-15%**

**A Quality Investment**

**Stable customer base & excellent regulatory relations**

**+**

**Solid balance sheet & financing capability**

**+**

**Comprehensive suite of service offerings**

**+**

**Further growth and profitability**

**(expanding markets in NJ, DE and beyond)**

**+**

**Experienced management team and active industry leader**

**+**

**Reputation as honest and ethical problem-**

**solver for developers and municipalities**

**=**

**Total Shareholder Returns**

© Middlesex Water Company

 

**For Additional Information about Middlesex Water Company, visit********www.middlesexwater.com**

**For Additional Information about Tidewater Utilities, Inc., visit********www.tuiwater.com******

**QUESTIONS?**

© Middlesex Water Company

A Provider of Water, Wastewater andRelatedProducts and Services

Thank you for your interest and support!

© Middlesex Water Company