----

----

**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 March 31, 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 | 12       |
|                        |                                                                                                                               |     |
| Item                3.      | Quantitative                and Qualitative Disclosures of Market                Risk                                              | 16       |
|                        |                                                                                                                               |     |
| Item                4.      | Controls                and Procedures                                                                                             | 16       |
|                        |                                                                                                                               |     |
| **PART                II.** | **OTHER                INFORMATION**                                                                                               |     |
|                        |                                                                                                                               |     |
| Item                1.      | Legal                Proceedings                                                                                                   | 17       |
|                        |                                                                                                                               |     |
| Item                1A.     | Risk                Factors                                                                                                        | 17       |
|                        |                                                                                                                               |     |
| Item                2.      | Changes                in Securities                                                                                               | 17       |
|                        |                                                                                                                               |     |
| Item                3.      | Defaults                Upon Senior Securities                                                                                     | 17       |
|                        |                                                                                                                               |     |
| Item                4.      | Submission                of Matters to a Vote of Security                Holders                                                  | 17       |
|                        |                                                                                                                               |     |
| Item                5.      | Other                Information                                                                                                   | 17       |
|                        |                                                                                                                               |     |
| Item                6.      | Exhibits                                                                                                                           | 18       |
|                        |                                                                                                                               |     |
| **SIGNATURE**               |                                                                                                                               | 19       |

----

*Index*

| ** MIDDLESEX                  WATER                  COMPANY**       |
|---------------------------------------------------------------------------------------------------------|
| **CONDENSED                  CONSOLIDATED STATEMENTS OF INCOME**                    |
| **(Unaudited)**                                                           |
| **(In                  thousands except per share amounts)**              |
|                                                                                                    |   |   |   |   |   |   |
|                                                                                                    |   | **Three                  Months Ended March 31,** |   |
|                                                                                                    |   | **2007** |   |   | **2006** |   |
|                                                                                                    |   |   |   |   |   |   |
| Operating                  Revenues                                                                     |   | **$** | **18,988** |   |   | $ | 18,230 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |
| Operating                  Expenses:                                                                    |   |   |   |   |   |   |   |   |
| Operations                                                                                              |   | ** ** | **10,192** |   |   |   | 9,646 |   |
| Maintenance                                                                                             |   | ** ** | **978** |   |   |   | 739 |   |
| Depreciation                                                                                            |   | ** ** | **1,845** |   |   |   | 1,668 |   |
| Other                  Taxes                                                                            |   | ** ** | **2,251** |   |   |   | 2,204 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |
| Total                  Operating Expenses                                                               |   | ** ** | **15,266** |   |   |   | 14,257 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |
| Operating                  Income                                                                       |   | ** ** | **3,722** |   |   |   | 3,973 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |
| Other                  Income (Expense):                                                                |   |   |   |   |   |   |   |   |
| Allowance                  for Funds Used During Construction                                           |   | ** ** | **112** |   |   |   | 113 |   |
| Other                  Income                                                                           |   | ** ** | **226** |   |   |   | 58 |   |
| Other                  Expense                                                                          |   | ** ** | **(5** | **)** |   |   | (2 | ) |
|                                                                                                    |   |   |   |   |   |   |   |   |
| Total                  Other Income, net                                                                |   | ** ** | **333** |   |   |   | 169 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |
| Interest                  Charges                                                                       |   | ** ** | **1,384** |   |   |   | 1,515 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |
| Income                  before Income Taxes                                                             |   | ** ** | **2,671** |   |   |   | 2,627 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |
| Income                  Taxes                                                                           |   | ** ** | **902** |   |   |   | 815 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |
| Net                  Income                                                                             |   | ** ** | **1,769** |   |   |   | 1,812 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |
| Preferred                  Stock Dividend Requirements                                                  |   |   |  62 |   |   |   |  62 |   |   |
| Earnings                  Applicable to Common Stock                                                    |   | **$** | **1,707** |   |   | $ | 1,750 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                   |   | **$** | **0.13** |   |   | $ | 0.15 |   |
| Diluted                                                                                                 |   | **$** | **0.13** |   |   | $ | 0.15 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |
| Average                  Number of Common Shares Outstanding:                                           |   |   |   |   |   |   |   |   |
| Basic                                                                                                   |   | ** ** | **13,176** |   |   |   | 11,594 |   |
| Diluted                                                                                                 |   | ** ** | **13,507** |   |   |   | 11,925 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |
| Cash                  Dividends Paid per Common Share                                                   |   | **$** | **0.1725** |   |   | $ | 0.1700 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |
|                                                                                                    |   |   |   |   |   |   |   |   |
| See                  Notes to Condensed Consolidated Financial Statements.                              |   |   |   |   |   |   |   |   |
|                                                                                                    |   |   |   |   |   |   |   |   |

----

*Index*

| **MIDDLESEX                  WATER COMPANY**                                                                          |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| ** CONDENSED                  CONSOLIDATED  BALANCE SHEETS**                                           |
| **(Unaudited)**                                                                                                  |
| **(In                  thousands)**                                                                              |
|                                                                                                                                                |   |   | **March                  31,** |   |   | **December                  31,** |   |
| **ASSETS**                                                                                                                                          |    | **2007** |   |   | **2006** |   |
| **UTILITY                  PLANT:**                                                                                                                 | Water                  Production |   | **$** | **96,840** |   |   | $ | 95,324 |   |
|                                                                                                                                                | Transmission                    and Distribution |   | ** ** | **247,955** |   |   |   | 243,959 |   |
|                                                                                                                                                | General  |   | ** ** | **24,154** |   |   |   | 25,153 |   |
|                                                                                                                                                | Construction                Work in Progress  | ** ** | **6,113** |   |   |   | 6,131 |   |
|                                                                                                                                                | TOTAL |   | ** ** | **375,062** |   |   |   | 370,567 |   |
|                                                                                                                                                | Less                Accumulated Depreciation  | ** ** | **61,026** |   |   |   | 59,694 |   |
|                                                                                                                                                | UTILITY                PLANT - NET |   | ** ** | **314,036** |   |   |   | 310,873 |   |
|                                                                                                                                                |        |   |   |   |
| **CURRENT                  ASSETS:**                                                                                                                | Cash                  and Cash Equivalents |   | ** ** | **5,238** |   |   |   | 5,826 |   |
|                                                                                                                                                | Accounts                  Receivable, net |   | ** ** | **9,124** |   |   |   | 8,538 |   |
|                                                                                                                                                | Unbilled                Revenues |   | ** ** | **4,078** |   |   |   | 4,013 |   |
|                                                                                                                                                | Materials                and Supplies (at average cost) |   | ** ** | **1,425** |   |   |   | 1,306 |   |
|                                                                                                                                                | Prepayments  | ** ** | **910** |   |   |   | 1,229 |   |
|                                                                                                                                                | TOTAL                  CURRENT ASSETS  |   | ** ** | **20,775** |   |   |   | 20,912 |   |
|                                                                                                                                                |                            |   |
| **DEFERRED                  CHARGES**                                                                                                               | Unamortized                  Debt Expense |   | ** ** | **2,999** |   |   |   | 3,014 |   |
| **AND                  OTHER ASSETS:**                                                                                                              | Preliminary                  Survey and Investigation Charges |   | ** ** | **4,099** |   |   |   | 3,436 |   |
|                                                                                                                                                | Regulatory                  Assets  |   | ** ** | **20,336** |   |   |   | 18,342 |   |
|                                                                                                                                                | Restricted                  Cash  |   | ** ** | **6,275** |   |   |   | 6,850 |   |
|                                                                                                                                                | Non-utility                Assets - Net |   | ** ** | **6,527** |   |   |   | 6,255 |   |
|                                                                                                                                                | Other  | ** ** | **417** |   |   |   | 585 |   |
|                                                                                                                                                | TOTAL                DEFERRED CHARGES AND OTHER ASSETS  | ** ** | **40,653** |   |   |   | 38,482 |   |
|                                                                                                                                                | TOTAL                ASSETS  | **$** | **375,464** |   |   | $ | 370,267 |   |
|                                                                                                                                                |   |   |   |   |   |   |   |   |   |
| **CAPITALIZATION                  AND LIABILITIES   **                                            |   |
| **CAPITALIZATION:**                                                                                                                                 | Common                  Stock, No Par Value |   | **$** | **104,597** |   |   | $ | 104,248 |   |
|                                                                                                                                                | Retained                Earnings |   | ** ** | **24,421** |   |   |   | 25,001 |   |
|                                                                                                                                                | Accumulated                Other Comprehensive Income (Loss), net of tax  | ** ** | **103** |   |   |   | 94 |   |
|                                                                                                                                                | TOTAL                COMMON EQUITY  | ** ** | **129,121** |   |   |   | 129,343 |   |
|                                                                                                                                                | Preferred                Stock |   | ** ** | **3,958** |   |   |   | 3,958 |   |
|                                                                                                                                                | Long-term                Debt  | ** ** | **130,270** |   |   |   | 130,706 |   |
|                                                                                                                                                | TOTAL                CAPITALIZATION |   | ** ** | **263,349** |   |   |   | 264,007 |   |
|                                                                                              |   |
| **CURRENT**                                                                                                                                         | Current                  Portion of Long-term Debt |   | ** ** | **2,553** |   |   |   | 2,501 |   |
| **LIABILITIES:**                                                                                                                                    | Accounts                  Payable |   | ** ** | **5,023** |   |   |   | 5,491 |   |
|                                                                                                                                                | Accrued                  Taxes  |   | ** ** | **9,057** |   |   |   | 6,684 |   |
|                                                                                                                                                | Accrued                Interest |   | ** ** | **896** |   |   |   | 1,880 |   |
|                                                                                                                                                | Unearned                Revenues and Advanced Service Fees |   | ** ** | **608** |   |   |   | 601 |   |
|                                                                                                                                                | Other  | ** ** | **1,240** |   |   |   | 984 |   |
|                                                                                                                                                | TOTAL                CURRENT LIABILITIES |   | ** ** | **19,377** |   |   |   | 18,141 |   |
|                                                                                                        |   |
| **COMMITMENTS                  AND CONTINGENT LIABILITIES (Note 7)**                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                        |   |
| **DEFERRED                  CREDITS**                                                                                                               | Customer                  Advances for Construction |   | ** ** | **19,671** |   |   |   | 19,246 |   |
| **AND                  OTHER LIABILITIES:**                                                                                                         | Accumulated                  Deferred Investment Tax Credits |   | ** ** | **1,793** |   |   |   | 1,813 |   |
|                                                                                                                                                | Accumulated                  Deferred Income Taxes  |   | ** ** | **17,788** |   |   |   | 15,779 |   |
|                                                                                                                                                | Employee                Benefit Plans |   | ** ** | **17,093** |   |   |   | 16,388 |   |
|                                                                                                                                                | Regulatory                  Liability - Cost of Utility Plant Removal |   | ** ** | **6,366** |   |   |   | 6,200 |   |
|                                                                                                                                                | Other   | ** ** | **538** |   |   |   | 527 |   |
|                                                                                                                                                | TOTAL                DEFERRED CREDITS AND OTHER LIABILITIES |   | ** ** | **63,249** |   |   |   | 59,953 |   |
|                                                                                                   |   |
| **CONTRIBUTIONS                  IN AID OF CONSTRUCTION**                                                                                      |   | ** ** | **29,489** |   |   |   | 28,166 |   |
|                                                                                                                                                | TOTAL                CAPITALIZATION AND LIABILITIES  | **$** | **375,464** |   |   | $ | 370,267 |   |
|                                                                                                                                                |   |   |   |   |   |   |   |   |   |
| See                  Notes to Condensed Consolidated Financial Statements.                                                                          |   |   |   |   |   |   |   |   |

----

*Index*

| **MIDDLESEX                  WATER COMPANY**                                        |
|-------------------------------------------------------------------------------------------------------------------|
| **CONDENSED                  CONSOLIDATED STATEMENTS OF CASH FLOWS**                          |
| **(Unaudited)**                                                                     |
| **(In                  thousands)**                                                 |
|                                                                                                              |   |   |   |   |   |   |
|                                                                                                              |   | **Three                  Months Ended March 31,** |   |
|                                                                                                              |   | **2007** |   |   | **2006** |   |
| CASH                  FLOWS FROM OPERATING ACTIVITIES:                                                            |   |   |   |   |   |   |
| Net                  Income                                                                                       |   | **$** | **1,769** |   |   | $ | 1,812 |   |
| Adjustments                  to Reconcile Net Income to                                                           |   |   |   |   |   |   |   |   |
| Net                  Cash Provided by Operating Activities:                                                       |   |   |   |   |   |   |   |   |
| Depreciation                  and Amortization                                                                    |   | ** ** | **1,995** |   |   |   | 1,865 |   |
| Provision                  for Deferred Income Taxes and ITC                                                      |   | ** ** | **128** |   |   |   | (44 | ) |
|                     Cash Surrender Value of Life Insurance                                              |   |   |  **(56** | **)**  |   |   |  (104 | )  |
| Equity                  Portion of AFUDC                                                                          |   | ** ** | **(54** | **)** |   |   | (52 | ) |
| Changes                  in Assets and Liabilities:                                                               |   |   |   |   |   |   |   |   |
| Accounts                  Receivable                                                                              |   | ** ** | **(209** | **)** |   |   | 1,506 |   |
| Unbilled                  Revenues                                                                                |   | ** ** | **(65** | **)** |   |   | (126 | ) |
| Materials                  & Supplies                                                                         |   | ** ** | **(119** | **)** |   |   | (110 | ) |
| Prepayments                                                                                                       |   | ** ** | **319** |   |   |   | 302 |   |
| Other                  Assets                                                                                     |   | ** ** | **(210** | **)** |   |   | (229 | ) |
| Accounts                  Payable                                                                                 |   | ** ** | **(468** | **)** |   |   | (1,938 | ) |
| Accrued                  Taxes                                                                                    |   | ** ** | **2,369** |   |   |   | 2,415 |   |
| Accrued                  Interest                                                                                 |   | ** ** | **(984** | **)** |   |   | (979 | ) |
| Employee                  Benefit Plans                                                                           |   | ** ** | **706** |   |   |   | 269 |   |
| Unearned                  Revenue & Advanced Service Fees                                                     |   | ** ** | **8** |   |   |   | 33 |   |
| Other                  Liabilities                                                                                |   | ** ** | **267** |   |   |   | 7 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
| NET                  CASH PROVIDED BY OPERATING ACTIVITIES                                                        |   | ** ** | **5,396** |   |   |   | 4,627 |   |
| CASH                  FLOWS FROM INVESTING ACTIVITIES:                                                            |   |   |   |   |   |   |   |   |
| Utility                  Plant Expenditures, Including AFUDC of $58 in 2007 and $61 in                  2006 |   | ** ** | **(3,620** | **)** |   |   | (4,610 | ) |
| Restricted                  Cash                                                                                  |   | ** ** | **599** |   |   |   | 98 |   |
| Preliminary                  Survey & Investigation Charges                                                   |   | ** ** | **(663** | **)** |   |   | (574 | ) |
|                                                                                                              |   |   |   |   |   |   |   |   |
| NET                  CASH USED IN INVESTING ACTIVITIES                                                            |   | ** ** | **(3,684** | **)** |   |   | (5,086 | ) |
| CASH                  FLOWS FROM FINANCING ACTIVITIES:                                                            |   |   |   |   |   |   |   |   |
| Redemption                  of Long-term Debt                                                                     |   | ** ** | **(425** | **)** |   |   | (343 | ) |
| Proceeds                  from Issuance of Long-term Debt                                                         |   | ** ** | **41** |   |   |   | - |   |
| Net                  Short-term Bank Borrowings (Repayments)                                                      |   | ** ** | **-** |   |   |   | 3,200 |   |
| Deferred                  Debt Issuance Expenses                                                                  |   | ** ** | **(30** | **)** |   |   | - |   |
| Common                  Stock Issuance Expense                                                                    |   | ** ** | **(15** | **)** |   |   | - |   |
| Restricted                  Cash                                                                                  |   | ** ** | **(23** | **)** |   |   | (6 | ) |
| Proceeds                  from Issuance of Common Stock                                                           |   | ** ** | **349** |   |   |   | 406 |   |
| Payment                  of Common Dividends                                                                      |   | ** ** | **(2,272** | **)** |   |   | (1,970 | ) |
| Payment                  of Preferred Dividends                                                                   |   | ** ** | **(62** | **)** |   |   | (62 | ) |
| Construction                  Advances and Contributions-Net                                                      |   | ** ** | **137** |   |   |   | (451 | ) |
|                                                                                                              |   |   |   |   |   |   |   |   |
| NET                  CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                              |   | ** ** | **(2,300** | **)** |   |   | 774 |   |
| NET                  CHANGES IN CASH AND CASH EQUIVALENTS                                                         |   | ** ** | **(588** | **)** |   |   | 315 |   |
| CASH                  AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                                 |   | ** ** | **5,826** |   |   |   | 2,984 |   |
| CASH                  AND CASH EQUIVALENTS AT END OF PERIOD                                                       |   | **$** | **5,238** |   |   | $ | 3,299 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL                  DISCLOSURE OF NON-CASH ACTIVITY:                                                    |   |   |   |   |   |   |   |   |
| Utility                  Plant received as Construction Advances and Contributions                                |   | **$** | **1,610** |   |   | $ | 1,035 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL                  DISCLOSURE OF CASH FLOWS INFORMATION:                                               |   |   |   |   |   |   |   |   |
|    Cash                  Paid During the Year for:                                                 |   |   |   |   |   |   |   |   |
| Interest                                                                                                          |   | **$** | **2,461** |   |   | $ | 2,562 |   |
| Interest                  Capitalized                                                                             |   | **$** | **(58** | **)** |   | $ | (61 | ) |
| Income                  Taxes                                                                                     |   | **$** | **15** |   |   | $ | 100 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
| See                  Notes to Condensed Consolidated Financial Statements.                                        |   |   |   |   |   |   |   |   |

----

*Index*

| **MIDDLESEX                      WATER COMPANY**                                                |
|-------------------------------------------------------------------------------------------------------------------------------|
| **CONDENSED                      CONSOLIDATED STATEMENTS OF CAPITAL STOCK**                               |
| **AND                      LONG-TERM DEBT**                                                     |
| **(Unaudited)**                                                                                 |
| **(In                      thousands except share and per share amounts)**                      |
|                                                                                                                          |
|                                                                                                                     | **March                      31,** |   |   | **December                      31,** |   |
|                                                                                                                          |   | **2007** |   |   | **2006** |   |
| Common                      Stock, No Par Value                                                                               |   |   |   |   |   |   |
|  Shares                      Authorized    -  20,000,000                                             |   |   |   |   |   |   |
| Shares                      Outstanding  -  2007 - 13,184,376                                                       |   | **$** | **104,597** |   |   | $ | 104,248 |   |
|  2006                      - 13,168,081                                                                                  |   |   |   |   |   |   |   |   |
|                                                                                                                          |   |   |   |   |   |   |   |   |
| Retained                      Earnings                                                                                        |   | ** ** | **24,421** |   |   |   | 25,001 |   |
| Accumulated                      Other Comprehensive Income (Loss), net of tax                                                |   | ** ** | **103** |   |   |   | 94 |   |
| TOTAL                      COMMON EQUITY                                                                                      |   | **$** | **129,121** |   |   | $ | 129,343 |   |
|                                                                                                                          |   |   |   |   |   |   |   |   |
| Cumulative                      Preference Stock, No Par Value:                                                               |   |   |   |   |   |   |   |   |
| Shares                      Authorized - 100,000                                                                              |   |   |   |   |   |   |   |   |
| Shares                      Outstanding - None                                                                                |   |   |   |   |   |   |   |   |
| Cumulative                      Preferred Stock, No Par Value                                                                 |   |   |   |   |   |   |   |   |
| Shares                      Authorized - 139,497                                                                              |   |   |   |   |   |   |   |   |
|    Convertible:                                                                                                |   |   |   |   |   |   |   |   |
| Shares                      Outstanding, $7.00 Series - 13,881                                                                |   | ** ** | **1,457** |   |   |   | 1,457 |   |
| Shares                      Outstanding, $8.00 Series - 12,000                                                                |   | ** ** | **1,399** |   |   |   | 1,399 |   |
|    Nonredeemable:                                                                                              |   |   |   |   |   |   |   |   |
| Shares                      Outstanding, $7.00 Series -   1,017                                                |   | ** ** | **102** |   |   |   | 102 |   |
| Shares                      Outstanding, $4.75 Series - 10,000                                                                |   | ** ** | **1,000** |   |   |   | 1,000 |   |
| TOTAL                      PREFERRED STOCK                                                                                    |   | **$** | **3,958** |   |   | $ | 3,958 |   |
|                                                                                                                          |   |   |   |   |   |   |   |   |
| Long-term                      Debt                                                                                           |   |   |   |   |   |   |   |   |
|    8.05%,                      Amortizing Secured Note, due December 20, 2021                                  |   | **$** | **2,873** |   |   | $ | 2,896 |   |
|    6.25%,                      Amortizing Secured Note, due May 22, 2028                                       |   | ** ** | **8,890** |   |   |   | 8,995 |   |
|    6.44%,                      Amortizing Secured Note, due August 25, 2030                                    |   | ** ** | **6,556** |   |   |   | 6,627 |   |
|    6.46%,                      Amortizing Secured Note, due September 19, 2031                                 |   | ** ** | **6,837** |   |   |   | 6,907 |   |
|    4.22%,                      State Revolving Trust Note, due December 31, 2022                               |   | ** ** | **723** |   |   |   | 739 |   |
|    3.30%                      to 3.60%, State Revolving Trust Note, due May 1, 2025                            |   | ** ** | **3,100** |   |   |   | 3,100 |   |
|    3.49%,                      State Revolving Trust Note, due January 25, 2027                                |   | ** ** | **603** |   |   |   | 598 |   |
|    4.03%,                      State Revolving Trust Note, due December 1, 2026                                |   | ** ** | **951** |   |   |   | 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                                                                                  |   | ** ** | **132,823** |   |   |   | 133,207 |   |
| Less:                      Current Portion of Long-term Debt                                                                  |   | ** ** | **(2,553** | **)** |   |   | (2,501 | ) |
| TOTAL                      LONG-TERM DEBT                                                                                     |   | **$** | **130,270** |   |   | $ | 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 March 31, |   |
|------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------|--------|
| **Basic:**                                                             |   | 2007                                                                                              |   |   | Shares |   |   | 2006 |   |   | Shares |   |
| Net                Income                                              |   | $                                                                                                 | 1,769  |   |   |   | 13,176 |   |   | $ | 1,812 |   |   |   | 11,594 |   |
| Preferred                Dividend                                      |   |                                                                                              | (62    | ) |   |   |   |   |   |   | (62 | ) |   |   |   |   |
| Earnings                Applicable to Common Stock                     |   | $                                                                                                 | 1,707  |   |   |   | 13,176 |   |   | $ | 1,750 |   |   |   | 11,594 |   |
|                                                                   |   |                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Basic                EPS**                                           |   | $                                                                                                 | 0.13   |   |   |   |   |   |   | $ | 0.15 |   |   |   |   |   |
|                                                                   |   |                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Diluted:**                                                           |   |                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                Applicable to Common Stock                     |   | $                                                                                                 | 1,707  |   |   |   | 13,176 |   |   | $ | 1,750 |   |   |   | 11,594 |   |
| $7.00                Series Preferred Dividend                         |   |                                                                                              | 24     |   |   |   | 167 |   |   |   | 24 |   |   |   | 167 |   |
| $8.00                Series Preferred Dividend                         |   |                                                                                              | 24     |   |   |   | 164 |   |   |   | 24 |   |   |   | 164 |   |
| Adjusted                Earnings Applicable to  Common Stock |   | $                                                                                                 | 1,755  |   |   |   | 13,507 |   |   | $ | 1,798 |   |   |   | 11,925 |   |
|                                                                   |   |                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Diluted                EPS**                                         |   | $                                                                                                 | 0.13   |   |   |   |   |   |   | $ | 0.15 |   |   |   |   |   |
|                                                                   |   |                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Index*

**Note      5 – Business Segment Data**

|                                              | (In                Thousands)Three                Months EndedMarch                31, |                                             |
|--------------------------------------------------------|----------------------------------------------------------------------------------------|--------------------------------------------------|
| Operations                by Segments:            | 2007                                                                                   |                                             |   | 2006 |   |
| Revenues:                                              |                                                                                   |                                             |   |   |   |   |
|    Regulated                            |                                                                                   | $                                                | 16,688 |   |   | $ | 16,001 |   |
|    Non                – Regulated |                                                                                   |                                             | 2,345 |   |   |   | 2,259 |   |
| Inter-segment                Elimination               |                                                                                   |                                             | (45 | ) |   |   | (30 | ) |
| Consolidated                Revenues                   |                                                                                   | $                                                | 18,988 |   |   | $ | 18,230 |   |
|  Operating                Income:                 |                                                                                   |                                             |   |   |   |   |   |   |
|    Regulated                            |                                                                                   | $                                                | 3,466 |   |   | $ | 3,703 |   |
|    Non                – Regulated |                                                                                   |                                             | 256 |   |   |   | 270 |   |
| Consolidated                Operating Income           |                                                                                   | $                                                | 3,722 |   |   | $ | 3,973 |   |
|                                                   |                                                                                   |                                             |   |   |   |   |   |   |
| Net                Income:                             |                                                                                   |                                             |   |   |   |   |   |   |
|    Regulated                            |                                                                                   | $                                                | 1,636 |   |   | $ | 1,666 |   |
|    Non                – Regulated |                                                                                   |                                             | 133 |   |   |   | 146 |   |
| Consolidated                Net Income                 |                                                                                   | $                                                | 1,769 |   |   | $ | 1,812 |   |
|                                                   |                                                                                   |                                             |   |   |   |   |   |   |
| Capital                Expenditures:                   |                                                                                   |                                             |   |   |   |   |   |   |
|    Regulated                            |                                                                                   | $                                                | 3,525 |   |   | $ | 4,591 |   |
|    Non                – Regulated |                                                                                   |                                             | 95 |   |   |   | 19 |   |
| Total                Capital Expenditures              |                                                                                   | $                                                | 3,620 |   |   | $ | 4,610 |   |
|                                                   |                                                                                   |                                             |   |   |   |   |
|                                                   |                                                                                   | As                ofMarch                31,2007 |   |   | As                ofDecember                31,2006 |   |
| Assets:                                                |                                                                                   |                                             |   |   |   |   |   |   |
|    Regulated                            |                                                                                   | $                                                | 371,182 |   |   | $ | 366,149 |   |
|    Non                – Regulated |                                                                                   |                                             | 7,105 |   |   |   | 6,808 |   |
| Inter-segment                Elimination               |                                                                                   |                                             | (2,823 | ) |   |   | (2,690 | ) |
| Consolidated                Assets                     |                                                                                   | $                                                | 375,464 |   |   | $ | 370,267 |   |

----

*Index*

**Note      6 – Short-term Borrowings**

**Note      7 – Commitments and Contingent Liabilities**

----

*Index*

|                           |   | (In                Thousands)Three                Months Ended March 31, |   |
|--------------------------------|--------|--------------------------------------------------------------------------|--------|
|                           |   | 2007                                                                     |   |   | 2006 |   |
|                           |   |                                                                     |   |   |   |   |
| Purchased                Water |   |                                                                     |   |   |   |   |
| Treated                        |   | $                                                                        | 460    |   |   | $ | 462 |   |
| Untreated                      |   |                                                                     | 598    |   |   |   | 567 |   |
| Total                Costs     |   | $                                                                        | 1,058  |   |   | $ | 1,029 |   |

**Note      8 – Employee Retirement Benefit Plans**

**Pension      – **

----

*Index*

**Postretirement      Benefits Other Than Pensions**

|                                                           |   | (In                Thousands)               |   |
|----------------------------------------------------------------|--------|---------------------------------------------|--------|
|                                                           |   | Pension                Benefits             |   |   | Other                Benefits |   |
|                                                           |   | Three                Months Ended March 31, |   |
|                                                           |   | 2007                                        |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|                                                           |   |                                        |   |   |   |   |   |   |   |   |   |   |
| Service                Cost                                    |   | $                                           | 320    |   |   | $ | 310 |   |   | $ | 185 |   |   | $ | 177 |   |
| Interest                Cost                                   |   |                                        | 453    |   |   |   | 430 |   |   |   | 212 |   |   |   | 217 |   |
| Expected                Return on Assets                       |   |                                        | (456   | ) |   |   | (415 | ) |   |   | (135 | ) |   |   | (90 | ) |
| Amortization                of Unrecognized Losses             |   |                                        | 66     |   |   |   | 57 |   |   |   | 68 |   |   |   | 129 |   |
| Amortization                of Unrecognized Prior Service Cost |   |                                        | 2      |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Amortization                of Transition Obligation           |   |                                        | -      |   |   |   | - |   |   |   | 34 |   |   |   | 34 |   |
| Net                Periodic Benefit Cost                       |   | $                                           | 385    |   |   | $ | 382 |   |   | $ | 364 |   |   | $ | 467 |   |
|                                                           |   |                                        |   |   |   |   |

**Note      9 – Stock Based Compensation**

----

*Index*

**Note      10 – Other Comprehensive Income**

|                                                                    |   | (In                Thousands)Three                Months EndedMarch                31, |   |
|-------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------|--------|
|                                                                    |   | 2007                                                                                   |   |   | 2006 |   |
|                                                                    |   |                                                                                   |   |   |   |   |
| Net                Income                                               |   | $                                                                                      | 1,769  |   |   | $ | 1,812 |   |
|                                                                    |   |                                                                                   |   |   |   |   |   |   |
| Other                Comprehensive Income:                              |   |                                                                                   |   |   |   |   |   |   |
| Change                in Value of Equity Investments, Net of Income Tax |   |                                                                                   | 8      |   |   |   | 1 |   |
|      Other                Comprehensive Income |   |                                                                                   | 8      |   |   |   | 1 |   |
|                                                                    |   |                                                                                   |   |   |   |   |   |   |
| Comprehensive                Income                                     |   | $                                                                                      | 1,777  |   |   | $ | 1,813 |   |

----

*Index*

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

**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                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                prospectus. |
|--------|---|-------------------------------------------------------------------------------------|

----

*Index*

**Overview**

----

*Index*

**Recent      Developments**

*Rate      Increases*

**Operating      Results by Segment**

**Results      of Operations – Three Months Ended March 31, 2007**

|                                               |   | (In                Thousands)Three                Months Ended March 31, |   |
|----------------------------------------------------|--------|--------------------------------------------------------------------------|--------|
|                                               |   | 2007                                                                     |   |   | 2006 |   |
|                                               |   | Regulated                                                                |   |   | Non-Regulated |   |   | Total |   |   | Regulated |   |   | Non-Regulated |   |   | Total |   |
| Revenues                                           |   | $                                                                        | 16,688 |   |   | $ | 2,300 |   |   | $ | 18,988 |   |   | $ | 16,001 |   |   | $ | 2,229 |   |   | $ | 18,230 |   |
| Operations                and maintenance expenses |   |                                                                     | 9,216  |   |   |   | 1,954 |   |   |   | 11,170 |   |   |   | 8,512 |   |   |   | 1,873 |   |   |   | 10,385 |   |
| Depreciation                expense                |   |                                                                     | 1,814  |   |   |   | 31 |   |   |   | 1,845 |   |   |   | 1,641 |   |   |   | 27 |   |   |   | 1,668 |   |
| Other                taxes                         |   |                                                                     | 2,192  |   |   |   | 59 |   |   |   | 2,251 |   |   |   | 2,145 |   |   |   | 59 |   |   |   | 2,204 |   |
| **  Operating                income**    |   |                                                                     | 3,466  |   |   |   | 256 |   |   |   | 3,722 |   |   |   | 3,703 |   |   |   | 270 |   |   |   | 3,973 |   |
|                                               |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                income                        |   |                                                                     | 333    |   |   |   | --- |   |   |   | 333 |   |   |   | 169 |   |   |   | --- |   |   |   | 169 |   |
| Interest                expense                    |   |                                                                     | 1,359  |   |   |   | 25 |   |   |   | 1,384 |   |   |   | 1,488 |   |   |   | 27 |   |   |   | 1,515 |   |
| Income                taxes                        |   |                                                                     | 804    |   |   |   | 98 |   |   |   | 902 |   |   |   | 718 |   |   |   | 97 |   |   |   | 815 |   |
| **  Net                income**          |   | $                                                                        | 1,636  |   |   | $ | 133 |   |   | $ | 1,769 |   |   | $ | 1,666 |   |   | $ | 146 |   |   | $ | 1,812 |   |

----

*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** |
|----------------------------|--------------------------------------|

| **Item1A.** | **Risk                Factors** |
|-------------|---------------------------------|

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

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

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

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

----

*Index*

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

| 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. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Index*

**SIGNATURES**

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