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What changed in MIDDLESEX WATER CO's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of MIDDLESEX WATER CO's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+254 added−300 removedSource: 10-K (2025-02-28) vs 10-K (2024-03-01)

Top changes in MIDDLESEX WATER CO's 2024 10-K

254 paragraphs added · 300 removed · 178 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

54 edited+33 added−44 removed32 unchanged
Biggest changeNet proceeds from the settlement of Middlesex’s 3M Company (3M) lawsuit were used to recover costs for the construction of the Park Avenue Plant PFAS treatment upgrades, including depreciation and carrying costs. The rate case settlement will result in the reclassification of $48.3 million from Regulatory Liabilities to Contributions in Aid of Construction in the March 31, 2024 balance sheet.
Biggest changeThe rate case settlement provided that the net proceeds from the 3M Settlement Agreement were to be used to mitigate the increase in customer rates and reimburse Middlesex for previously incurred costs for the construction of the Park Avenue Plant PFAS treatment upgrades, including depreciation and carrying costs.
Regulation of Rates and Services For regulated rate setting purposes, we account separately for our regulated utility operations to facilitate independent rate setting by the applicable Public Utility Commissions. In determining our regulated utility rates, the respective Public Utility Commissions consider the revenue, expenses and utility infrastructure used and useful in providing service to the public.
Regulation of Rates and Services For regulated rate setting purposes, we account separately for our regulated utility operations to facilitate independent rate setting by the applicable Public Utility Commissions. 6 In determining our regulated utility rates, the respective Public Utility Commissions consider the revenue, expenses and utility infrastructure used and useful in providing service to the public.
Our Executive Management team and our Board of Directors continually assess succession plans, leadership development progress and policies and strategies regarding recruitment, retention, career development, diversity, equity and inclusion. Formalized succession planning strategies have been developed for key leadership positions.
Our Executive Management team and our Board of Directors continually assess succession plans, leadership development progress 5 and policies and strategies regarding recruitment, retention, career development, diversity, equity and inclusion. Formalized succession planning strategies have been developed for key leadership positions.
Capko was an Audit Senior Manager with Deloitte & Touche LLP, with a focus on publicly traded regulated utilities including several regulated public utility clients subject to the jurisdiction of the NJBPU.
Capko was an Audit Senior Manager with Deloitte & Touche LLP, with a focus on publicly traded regulated utilities including several regulated public utility clients subject to the jurisdiction of the NJBPU. 11
Contract sales to the Townships of Edison and Marlboro, the City of Rahway and the Old Bridge Municipal Utilities Authority are supplemental to the water systems owned and operated by these customers. Middlesex is the sole source of water for the Borough of Highland Park and the Township of East Brunswick.
Contract sales to the Townships of Edison and Marlboro, the City of Rahway and the Old Bridge Municipal Utilities Authority are supplemental to the water systems owned and operated by these customers. Middlesex is the primary source of water for the Borough of Highland Park and the Township of East Brunswick.
Pinelands Systems Pinelands Water provides water services to approximately 2,500 residential customers in Burlington County, New Jersey. Pinelands Water is not physically interconnected with the Middlesex System. Pinelands Water produced approximately 1% of our 2023 consolidated operating revenues.
Pinelands Systems Pinelands Water provides water services to approximately 2,500 residential customers in Burlington County, New Jersey. Pinelands Water is not physically interconnected with the Middlesex System. Pinelands Water produced approximately 1% of our 2024 consolidated operating revenues.
Pinelands Wastewater provides wastewater collection and treatment services to approximately 2,500 residential customers and one municipal wastewater system in Burlington County, New Jersey. Pinelands Wastewater produced approximately 1% of our 2023 consolidated operating revenues.
Pinelands Wastewater provides wastewater collection and treatment services to approximately 2,500 residential customers and one municipal wastewater system in Burlington County, New Jersey. Pinelands Wastewater produced approximately 1% of our 2024 consolidated operating revenues.
Tidewater augments its water production with annual purchases of up to 60.0 million gallons of treated water from the City of Dover, Delaware. Tidewater does not have a central water treatment facility for the over 470 separate communities it serves.
Tidewater augments its water production with annual purchases of up to 75.0 million gallons of treated water from the City of Dover, Delaware. Tidewater does not have a central water treatment facility for the over 480 separate communities it serves.
Prior to joining Tidewater, he served as Kent County, Delaware Public Works Director and County Engineer where he had overall responsibility for the County’s regional wastewater facilities. Mr. Patrick also held prior positions with the Delaware Department of Natural Resources and Environmental Control as well as the Delaware Division of Public Health. Robert J. Capko – Mr.
Prior to joining Tidewater, he served as Kent County, Delaware Public Works Director and County Engineer where he had overall responsibility for the County’s regional wastewater facilities. Mr. Patrick also held prior positions with the Delaware Department of Natural Resources and Environmental Control as well as the Delaware Division of Public Health. Brian Hague – Mr.
USA-PA USA-PA operates the City of Perth Amboy, New Jersey’s (Perth Amboy) water and wastewater systems under a 10-year agreement, which expires in December 2028. In addition to performing day-to day operations, USA-PA is also responsible for emergency responses and management of capital projects funded by Perth Amboy. USA-PA produced approximately 4% of our 2023 consolidated operating revenues.
USA-PA USA-PA operates the City of Perth Amboy, New Jersey’s (Perth Amboy) water and wastewater systems under a ten-year agreement, which expires in December 2028. In addition to performing day-to day operations, USA-PA is also responsible for emergency responses and management of capital projects funded by Perth Amboy. USA-PA produced approximately 3% of our 2024 consolidated operating revenues.
The terms “the Company,” “we,” “our,” and “us” refer to Middlesex Water Company and its subsidiaries, including Tidewater Utilities, Inc. (Tidewater) and Tidewater’s wholly-owned subsidiaries, Southern Shores Water Company, LLC (Southern Shores) and White Marsh Environmental Systems, Inc. (White Marsh).
Item 1. Business. The terms “the Company,” “we,” “our,” and “us” collectively refer to Middlesex Water Company (Middlesex) and its subsidiaries, including Tidewater Utilities, Inc. (Tidewater) and Tidewater’s wholly-owned subsidiaries, Southern Shores Water Company, LLC (Southern Shores) and White Marsh Environmental Systems, Inc. (White Marsh).
Workforce As of December 31, 2023, the Company had 355 employees. None of our employees are subject to a collective bargaining agreement. We believe our employee relations are positive. 5 Employee Compensation and Benefits We offer comprehensive competitive employee compensation and benefit programs consistent with job functions, skill levels, experience, knowledge and geographic location.
Workforce As of December 31, 2024, the Company had 360 employees. None of our employees is subject to a collective bargaining agreement. We believe our employee relations are positive. Employee Compensation and Benefits We offer comprehensive competitive employee compensation and benefit programs consistent with job functions, skill levels, experience, knowledge and geographic location.
Olsen Surface Water Treatment Plant (CJO Plant)-10.7 billion gallons; ● Twenty-seven Company-owned wells (ground water)-2.0 billion gallons; and ● The balance purchased from a non-affiliated water utility regulated by the New Jersey Board of Public Utilities (NJBPU) under an agreement which expires February 27, 2026.
Olsen Surface Water Treatment Plant (CJO Plant)-10.3 billion gallons; ● Company-owned wells (ground water)-2.9 billion gallons; and ● The balance purchased from a non-affiliated water utility regulated by the New Jersey Board of Public Utilities (NJBPU) under an agreement which expires February 27, 2026.
The aggregate pumping capacity of the four wells is 2.2 mgd. Wastewater Facilities Pinelands Wastewater System The Pinelands Wastewater System discharges into the South Branch of the Rancocas Creek through a wastewater treatment plant that provides clarification, sedimentation, filtration and disinfection. The total capacity of the plant is 0.5 mgd, and the system treated approximately 94.8 million gallons in 2023.
The aggregate pumping capacity of the four wells is 2.2 mgd. Wastewater Facilities Pinelands Wastewater System The Pinelands Wastewater System discharges into the South Branch of the Rancocas Creek through a wastewater treatment plant that provides clarification, sedimentation, filtration and disinfection. The total capacity of the plant is 0.5 mgd, and the system treated approximately 92.6 million gallons in 2024.
As the number has grown, many of Tidewater’s individual systems have been interconnected, forming several regional systems that are served by multiple water treatment facilities owned by Tidewater. Pinelands Water System Water supply to our Pinelands Water System is derived from four wells which produced approximately 134.7 million gallons in 2023.
As the number has grown, many of Tidewater’s individual systems have been interconnected, forming several regional systems that are served by multiple water treatment facilities owned by Tidewater. 4 Pinelands Water System Water supply to our Pinelands Water System is derived from four wells which produced approximately 141.1 million gallons in 2024.
Tidewater System Tidewater, together with its wholly-owned subsidiary, Southern Shores, provides water services to approximately 59,000 retail customers for residential, commercial and fire protection purposes in over 470 separate communities 2 in New Castle, Kent and Sussex Counties, Delaware. The Tidewater System produced approximately 25% of our 2023 consolidated operating revenues.
Tidewater System Tidewater, together with its wholly-owned subsidiary, Southern Shores, provides water services to approximately 62,000 retail customers for residential, commercial and fire protection purposes in over 480 separate communities 2 in New Castle, Kent and Sussex Counties, Delaware. The Tidewater System produced approximately 24% of our 2024 consolidated operating revenues.
White Marsh produced approximately 1% of our 2023 consolidated operating revenues. 3 Financial Information Consolidated operating revenues, operating income and net income are as follows: (Thousands of Dollars) Years Ended December 31, 2023 2022 2021 Operating Revenues $ 166,274 $ 162,434 $ 143,141 Operating Income $ 39,223 $ 47,333 $ 33,211 Net Income $ 31,524 $ 42,429 $ 36,543 Operating revenues were earned from the following sources: Years Ended December 31, 2023 2022 2021 Residential 52.1% 52.3% 54.3% Commercial 14.4 14.0 11.7 Industrial 7.0 6.9 6.3 Fire Protection 7.6 7.8 8.8 Contract Sales 11.5 11.6 10.2 Contract Operations 7.4 7.4 8.6 Other 0.0 0.0 0.1 Total 100.0% 100.0% 100.0% Water Supplies and Contracts Our New Jersey and Delaware water supply systems are physically separate and are not interconnected.
Financial Information Consolidated operating revenues, operating income and net income are as follows: (Thousands of Dollars) Years Ended December 31, 2024 2023 2022 Operating Revenues $ 191,877 $ 166,274 $ 162,434 Operating Income $ 53,210 $ 39,223 $ 47,333 Net Income $ 44,351 $ 31,524 $ 42,429 3 Operating revenues were earned from the following sources: Years Ended December 31, 2024 2023 2022 Residential 51.0 % 52.1 % 52.3 % Commercial 16.6 14.4 14.0 Industrial 7.2 7.0 6.9 Fire Protection 7.4 7.6 7.8 Contract Sales 11.0 11.5 11.6 Contract Operations 6.8 7.4 7.4 Total 100.0 % 100.0 % 100.0 % Water Supplies and Contracts Our New Jersey and Delaware water supply systems are physically separate and are not interconnected.
In addition to the enhanced groundwater treatment process for PFOA, we treat the groundwater supplies in our Middlesex System with chlorination for primary disinfection purposes and use air stripping for removal of volatile organic compounds. Surface water treatment in our Middlesex System is by conventional treatment; coagulation, sedimentation and filtration.
We treat the groundwater supplies in our Middlesex System with chlorination for primary disinfection purposes and use air stripping for removal of volatile organic compounds. Surface water treatment in our Middlesex System is by conventional treatment; coagulation, sedimentation and filtration. The treatment process includes pH adjustment, ozone and chlorination for disinfection, and corrosion control for the distribution system.
In the event that temperatures during the typically warmer months are cooler than normal, or if there is more rainfall than normal, the customer demand for our water may decrease and therefore, adversely affect our revenues. Management In May 2023, President and Chief Executive Officer, Dennis W. Doll announced a plan to retire upon turning age 65.
In the event that temperatures during the typically warmer months are cooler than normal, or if there is more rainfall than normal, the customer demand for our water may decrease and therefore, adversely affect our revenues. 9 Management Upon the retirements of President and Chief Executive Officer Dennis W.
In New Jersey, the Pinelands System and Fortescue System are not interconnected with the Middlesex System or each other. We believe we have adequate sources of water supply to meet the current service requirements of our present customers in New Jersey and Delaware. Middlesex System Our Middlesex System produced approximately 13.8 billion gallons in 2023 from: ● The Carl J.
In New Jersey, the Pinelands System is not interconnected with the Middlesex System. We believe we have adequate sources of water supply to meet the current service requirements of our present customers in New Jersey and Delaware. Middlesex System Our Middlesex System produced approximately 14.3 billion gallons in 2024 from: ● The Carl J.
In November 2021, the PAPUC issued an Order affirming the ALJ’s Recommended Decision, ordering the Receiver Utility to acquire the Twin Lakes water system and for Middlesex, the parent company of Twin Lakes, to submit $1.7 million into an escrow account within 30 days.
In November 2021, the PAPUC issued an Order ordering the Receiver Utility to acquire the Twin Lakes water system and for Middlesex, the parent company of Twin Lakes, to submit $1.7 million into an escrow account within 30 days. In January 2025, the United States Court of Appeals for the Third Circuit (Third Circuit Court) upheld the PAPUC Order.
The Middlesex System produced approximately 66% of our 2023 consolidated operating revenues.
The Middlesex System produced approximately 67% of our 2024 consolidated operating revenues.
Patrick, a licensed professional engineer, joined Tidewater in February 2002 as Vice President of Engineering. He was promoted to Vice President and General Manager in April 2012, Executive Vice President in April 2023, and President in December 2023. Mr. Patrick has extensive experience in regulatory compliance, permitting, planning and design.
He was promoted to Vice President and General Manager in April 2012, Executive Vice President in April 2023, and President in December 2023. Mr. Patrick has extensive experience in regulatory compliance, permitting, planning and design.
Capko, a Certified Public Accountant, joined the Company in 2009 as Corporate Controller. On March 28, 2023, Mr. Capko was appointed Principal Accounting Officer of Middlesex. Mr. Capko is also a Director and Treasurer of Tidewater and White Marsh and Controller of USA, USA-PA, Pinelands Water and Pinelands Wastewater. Prior to joining Middlesex, Mr.
Capko was appointed Principal Accounting Officer of Middlesex. Mr. Capko is also a Director and Treasurer of Tidewater and White Marsh and Controller of USA, USA-PA, Pinelands Water and Pinelands Wastewater. Prior to joining Middlesex, Mr.
USA produced approximately 2% of our 2023 consolidated operating revenues. White Marsh White Marsh operates or maintains water and/or wastewater systems that serve approximately 4,300 service connections under 31 separate contracts. White Marsh also owns two commercial properties that are leased to Tidewater for its administrative office campus and its field operations center.
White Marsh White Marsh operates or maintains water and/or wastewater systems that serve approximately 4,300 service connections under 28 separate contracts, primarily in New Castle, Kent and Sussex Counties, Delaware. White Marsh also owns two commercial properties that are leased to Tidewater for its administrative office campus and its field operations center.
The NJDEP and DEDPH monitor our activities and review the results of water quality tests that are performed for adherence to applicable regulations. Other applicable regulations include the Lead, Copper and Lead Service Line Rules, the Federal Surface Water Treatment Rule and the Federal Total Coliform Rule and regulations for maximum contaminant levels established for various volatile organic compounds.
Other applicable regulations include the Lead, Copper and Lead Service Line Rules, the Federal Surface Water Treatment Rule and the Federal Total Coliform Rule and regulations for maximum contaminant levels established for various volatile organic compounds.
The financial results, total assets and financial obligations of Twin Lakes are not material to Middlesex. Water and Wastewater Quality and Environmental Regulations Government environmental regulatory agencies regulate our operations in New Jersey and Delaware with respect to water supply, treatment and distribution systems and the quality of the water.
Water and Wastewater Quality and Environmental Regulations Government environmental regulatory agencies regulate our operations in New Jersey and Delaware with respect to water supply, treatment and distribution systems and the quality of the water. They also regulate our operations with respect to wastewater collection, treatment and disposal.
Regulation Our rates charged to customers for utility services, the quality of the services we provide and certain other matters are regulated by the NJBPU and DEPSC (collectively, the Public Utility Commissions). Our USA, USA-PA and White Marsh subsidiaries are not regulated public utilities as related to rates and service quality.
Regulation Our rates charged to customers for utility services, the quality of the services we provide and certain other matters are regulated by the state public utility commissions in the states where we operate, including the NJBPU and the DEPSC (collectively, the Public Utility Commissions).
Kooper joined the Company in 2014 as Vice President and General Counsel and serves as Secretary for the Company and all subsidiaries. Prior to joining the Company, Mr.
Ginegaw serves as a volunteer director on the Board of the New Jersey Utilities Association. Jay L. Kooper – Mr. Kooper joined the Company in 2014 as Vice President and General Counsel and serves as Secretary for the Company and all subsidiaries. Prior to joining the Company, Mr.
However, they are subject to federal and state environmental regulations with respect to water quality and wastewater effluent quality to the extent such services are provided.
Our USA, USA-PA and White Marsh subsidiaries are not regulated public utilities as related to rates and service quality. However, they are subject to federal and state environmental regulations with respect to water quality and wastewater effluent quality to the extent such services are provided.
Middlesex Rate Matters In February 2024, Middlesex’s petition to the NJBPU, filed in May 2023, seeking permission to increase its base water rates was concluded, based on a negotiated settlement that is expected to increase annual operating revenues by $15.4 million effective March 1, 2024.
Middlesex Rate Matters The approval by the NJBPU in February 2024 of the negotiated settlement of the Middlesex 2023 base rate case is expected to increase annual operating revenues by $15.4 million, effective March 1, 2024.
Water supply to customers of the Fortescue System is derived from two wells, which produced approximately 6.7 million gallons in 2023. Tidewater System Our Tidewater System produced approximately 2.9 billion gallons in 2023, primarily from 175 wells. Tidewater expects to submit applications to Delaware regulatory authorities for the approval of additional wells as growth, customer demand and water quality warrant.
Tidewater System Our Tidewater System, together with our wholly-owned subsidiary, Southern Shores, produced approximately 3.3 billion gallons in 2024, primarily from 172 wells. Tidewater expects to submit applications to Delaware regulatory authorities for the approval of additional wells as growth, customer demand and water quality warrant.
The treatment process includes pH adjustment, ozone and chlorination for disinfection, and corrosion control for the distribution system. 10 Treatment of groundwater in our Tidewater System is by chlorination for disinfection purposes and, in some cases, pH adjustment and filtration for nitrate and iron removal and granular activated carbon filtration for organics removal.
Treatment of groundwater in our Tidewater System is by chlorination for disinfection purposes and, in some cases, pH adjustment and filtration for nitrate and iron removal and granular activated carbon filtration for organics removal. Chloramination is used for final disinfection at Southern Shores. Treatment of groundwater in the Pinelands Water System (primary disinfection only) is performed at individual well sites.
Fullagar – Mr. Fullagar, a licensed professional engineer, joined the Company in 1997, was named Assistant Vice President-Operations in January 2019 and promoted to Vice President-Operations in July 2019. He is President and a Director of USA-PA, USA and Twin Lakes. Mr.
Fullagar, a licensed professional engineer, joined the Company in 1997, was named Assistant Vice President-Operations in January 2019 and promoted to Vice President-Operations in July 2019. In 10 February 2025, Mr. Fullagar was promoted to President-New Jersey Operations. Mr. Fullagar attended the New Jersey Institute of Technology, where he received a Bachelor of Science Degree in Civil Engineering. Mr.
On January 23, 2024, the Company named Nadine Leslie as its new President and Chief Executive Officer effective March 1, 2024. Ms. Leslie will also be appointed to the Board of Directors effective March 1, 2024. Mr.
Doll, and Senior Vice President, Treasurer and Chief Financial Officer Bruce O’Connor, the Company named Nadine Leslie its new President and Chief Executive Officer effective March 1, 2024 and Mohammed G. Zerhouni its new Senior Vice President, Chief Financial Officer and Treasurer effective June 24, 2024. Ms. Leslie was also appointed to the Board of Directors effective March 1, 2024.
Under a marketing agreement with HomeServe USA Corp. (HomeServe) expiring in 2031, USA offers residential customers in New Jersey and Delaware various water and wastewater related home maintenance programs. HomeServe is a leading national provider of such home maintenance service programs. USA receives a service fee for the billing, cash collection and other administrative matters associated with HomeServe’s service contracts.
HomeServe is a leading national provider of such home maintenance service programs. USA receives a service fee for the billing, cash collection and other administrative matters associated with HomeServe’s service contracts. USA produced approximately 3% of our 2024 consolidated operating revenues.
This agreement provides for minimum purchases of 3.0 million gallons per day (mgd) of treated water with provisions for additional purchases.
This agreement provides for minimum purchases of 3.0 million gallons per day (mgd) of treated water with provisions for additional purchases. The Middlesex System’s distribution storage facilities are used to supply water to customers at times of peak demand, outages and emergencies.
The Company is focused on recruitment and/or development of both external and internal candidates so that all prospective and current employees are provided an opportunity to advance their careers. We are intentional in our efforts to attract candidates from historically marginalized groups and seek a diverse pool of candidates for apprenticeships and internship opportunities.
Belonging & Inclusion The Company is committed to fostering a workplace where employees feel valued, respected, and empowered to contribute their unique perspectives. The Company is focused on recruitment and/or development of both external and internal candidates so that all prospective and current employees are provided an opportunity to advance their careers.
We participate in industry-related research to identify technologies that may reduce the level of organic, inorganic and synthetic compounds found in water. The cost to water utilities to comply with any proposed water quality standards depends in part on the limits set in the regulations and on the method selected to treat the water to the required standards.
The cost to water utilities to comply with any proposed water quality standards depends in part on the limits set in the regulations and on the method selected to treat the water to the required standards. We regularly test our water to determine compliance with government environmental regulatory agencies’ water quality standards.
As part of this legal proceeding the PAPUC also issued an Order in January 2021 appointing a large Pennsylvania based investor-owned water utility as the receiver (the Receiver Utility) of the Twin Lakes system until the petition is fully adjudicated by the PAPUC.
In January 2021, the Pennsylvania Public Utility Commission (PAPUC) appointed a large Pennsylvania based investor-owned utility as the receiver (the Receiver Utility) of the Twin Lakes system.
Statements on DEI and our Human Rights Policy can be found on our website. We continue to monitor the results of our DEI efforts and continually explore opportunities to further engage our employees and customers. 6 Competition Our business in our franchised service areas is substantially free from direct competition for growth with other public utilities, municipalities and other entities.
Statements on belonging and inclusion can be found on our website and are not part of this Annual Report on Form 10-K. Competition Our business in our franchised service areas is substantially free from direct competition for growth with other public utilities, municipalities and other entities.
The Company’s other subsidiaries are Pinelands Water Company (Pinelands Water) and Pinelands Wastewater Company (Pinelands Wastewater) (collectively, Pinelands), Utility Service Affiliates, Inc. (USA) and Utility Service Affiliates (Perth Amboy) Inc., (USA-PA). The Company’s principal executive offices are located at 485C Route 1 South, Suite 400, Iselin, New Jersey 08830. Our telephone number is (732) 634-1500. Our website address is http://www.middlesexwater.com.
Our principal executive offices are located at 485C Route 1 South, Suite 400, Iselin, New Jersey 08830. Our telephone number is (732) 634-1500. Our website address is www.middlesexwater.com. Information contained on our website is not part of this Annual Report on Form 10-K.
Item 1. Business. Overview Middlesex Water Company (Middlesex) was incorporated as a water utility company in 1897 and owns and operates regulated water utility and wastewater systems primarily in New Jersey and Delaware. Middlesex also operates water and wastewater systems under contract on behalf of municipal and private clients primarily in New Jersey and Delaware.
Middlesex also operates water and wastewater systems under contract on behalf of municipal and private clients primarily in New Jersey and Delaware. Across our regulated utility systems, we serve approximately 128,000 customers. We operate water and wastewater systems under unregulated contracts for governmental entities and private entities.
In September 2022, the NJBPU approved Middlesex's Emergency Relief Motion to reset its Purchased Water Adjustment Clause (PWAC) tariff rate to recover additional costs of $2.7 million for the purchase of treated water from a non-affiliated water utility. A PWAC is a rate mechanism that allows for recovery of increased purchased water costs between base rate case filings.
Middlesex expects to file for an additional DSIC rate increase in April 2025. In February 2025, the NJBPU approved Middlesex’s petition to reset its Purchased Water Adjustment Clause (PWAC) tariff rate to recover additional annual costs of $0.5 million, primarily for the purchase of treated water from a non-affiliated water utility regulated by the NJBPU.
Doll 65 President, Chief Executive Officer and Chairman of the Board of Directors A. Bruce O’Connor 65 Senior Vice President, Treasurer and Chief Financial Officer G. Christian Andreasen, Jr. 64 Vice President-Enterprise Engineering Robert K. Fullagar 57 Vice President-Operations Lorrie B. Ginegaw 48 Vice President-Human Resources Jay L. Kooper 51 Vice President-General Counsel and Secretary Georgia M.
Zerhouni 49 Senior Vice President, Chief Financial Officer and Treasurer Gregory Sorensen 54 Vice President and Chief Operating Officer Robert K. Fullagar 58 President – New Jersey Operations Lorrie B. Ginegaw 49 Vice President - Human Resources Jay L. Kooper 52 Vice President - General Counsel and Secretary Georgia M.
USA operates the Borough of Highland Park, New Jersey’s (Highland Park) water utility and sewer utility under a ten-year operations and maintenance contract expiring in 2030. USA also provides water and wastewater services to several other New Jersey municipalities under contracts that are not regulated by a public utility commission as to rates and service.
USA operates the Borough of Highland Park, New Jersey’s (Highland Park) water utility and sewer utility under a ten-year operations and maintenance contract expiring in 2030. Under a marketing agreement with HomeServe USA Corp. (HomeServe) expiring in 2031, USA offers residential customers in New Jersey and Delaware various water and wastewater related home maintenance programs.
Under the agreement, current rates were to remain in effect until December 31, 2024, unless there are unanticipated capital expenditures or regulatory related changes in operating expenses exceeding certain thresholds during this time period. In 2022, capital expenditures did exceed the established threshold and rates were increased by 5.39%, effective January 1, 2023.
Under the agreement, rates are increased when there are unanticipated capital expenditures or regulatory related changes in operating expenses exceed certain thresholds. In 2024, capital expenditures did exceed the established threshold. In addition, rates are increased annually by the lesser of the regional Consumer Price Index or 3%.
In January 2024, the NJBPU approved Middlesex’s petition for the proposed cost recovery of its Lead Service Line Replacement (LSLR) Plan and cost recovery of project costs associated with replacing Middlesex customer-owned lead service lines. Replacement of Middlesex and Middlesex customer-owned lead service lines is required by the New Jersey LSLR Law.
The Middlesex Lead Service Line Replacement (LSLR) Plan, which was approved by the NJBPU in January 2024, has commenced and Middlesex is currently recovering $1.2 million of costs for replacing customer-owned lead service lines incurred through June 2024, which are being recovered between September 2024 and February 2025.
Simpson held various Information Technology positions and has gained an extensive array of technical and business computer certifications. Ms. Simpson serves as a member of the Delaware Cyber Security Advisory Council, the Society for Information Management, New Jersey chapter and the Project Management Institute, New Jersey chapter. Bernadette M. Sohler – Ms.
Simpson held various Information Technology positions and has gained an extensive array of technical and business computer certifications. Ms. Simpson graduated from Monroe College in New York with a Bachelor’s Degree in Information Systems. Ms.
Simpson 50 Vice President-Information Technology and Chief Technology Officer Bernadette M. Sohler 63 Vice President-Corporate Affairs Bruce E. Patrick 55 President-Tidewater Robert J. Capko 50 Corporate Controller and Principal Accounting Officer Dennis W. Doll – Mr.
Simpson 51 Vice President -Information Technology and Chief Technology Officer Bruce E. Patrick 56 President- Delaware Operations Brian Hague 52 Vice President - Communications and Corporate Affairs Robert J. Capko 51 Corporate Controller and Principal Accounting Officer Nadine Leslie – Ms. Leslie joined the Company as President and Chief Executive Officer in March 2024. Ms.
Southern Shores Rate Matters Effective January 1, 2020, the DEPSC approved the renewal of a multi-year agreement for water service to a 2,200 unit condominium community we serve in Sussex County, Delaware.
Tidewater currently provides water service to most residents of Ocean View other that the 900 customers currently served by Ocean View. Closing on this purchase is expected by April 2025. Southern Shores Rate Matters Southern Shores provides water service to a 2,200 unit condominium community in Sussex County, Delaware under a DEPSC-approved agreement expiring December 31, 2029 .
They also regulate our operations with respect to wastewater collection, treatment and disposal. Regulations relating to water quality require us to perform tests to ensure our water meets state and federal quality requirements. In addition, government environmental regulatory agencies continuously review current regulations governing the limits of certain organic compounds found in the water as byproducts of the treatment process.
Regulations relating to water quality require us to perform tests to ensure our water meets state and federal quality requirements. We participate in industry-related research to identify technologies that may reduce the level of 8 organic, inorganic and synthetic compounds found in water.
Under this legislation, the costs associated with replacing customer-owned lead service lines are recoverable through future customer surcharges. Cost recovery for replacing Company-owned lead service lines are recoverable through traditional base rate case filings. The current estimates for replacement of Middlesex and Middlesex customer-owned lead service lines are approximately $46 million to $77 million over a nine-year period.
Cost recovery for replacing Company-owned lead service lines are recoverable through traditional rate making in connection with general rate case filings.
Prior to joining the Company, Ms. Ginegaw worked in various human resources positions in the healthcare and transportation/logistics industries. Ms. Ginegaw serves as a volunteer director on the Board of the New Jersey Utilities Association. Jay L. Kooper – Mr.
Prior to joining the Company, Ms. Ginegaw worked in various human resources positions in the healthcare and transportation/logistics industries and is a Society for Human Resource Management Certified Professional. Ms. Ginegaw attended Wichita State University, where she received a Bachelor of Arts in Field Studies, Business and Psychology, and Wilmington University, where she received a Master’s in Business Administration. Ms.
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Information contained on our website is not part of this Annual Report on Form 10-K.
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The Company’s other subsidiaries are Pinelands Water Company (Pinelands Water) and Pinelands Wastewater Company (Pinelands Wastewater) (collectively, Pinelands), Utility Service Affiliates, Inc. (USA) and Utility Service Affiliates (Perth Amboy) Inc. (USA-PA). Overview Middlesex was incorporated as a water utility company in 1897 and owns and operates regulated water utility and wastewater systems primarily in New Jersey and Delaware.
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Middlesex provides water service to approximately 300 customers in Cumberland County, New Jersey. This system is referred to as the Fortescue System, and is not physically interconnected with the Middlesex System. The Fortescue System produced less than 0.1% of our 2023 consolidated operating revenues.
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We also periodically provide certain information for investors on our website, and our investor relations website, investors.middlesexwater.com. This includes press releases and other information about dividends on the Company’s equity securities.
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In November 2021, Middlesex temporarily ceased pumping from its Company-owned wells at the Park Avenue Wellfield Treatment Plant (Park Avenue Plant) in South Plainfield, New Jersey and alternate sources of supply were obtained in order to comply with new State of New Jersey water quality regulations relative to poly- and perfluoroalkyl substances, collectively referred to as PFAS, that became effective in 2021. 4 Prior to 2021, the Company began design for construction of an enhanced treatment process at the Park Avenue Plant to meet the expected PFAS water quality standards anticipated to be enacted by the State of New Jersey, which at that time were unknown as to their timing and extent.
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White Marsh produced approximately 1% of our 2024 consolidated operating revenues.
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In June 2022, a portion of the enhanced treatment process was completed, placed into service and effectively treated the ground water in compliance with all state and federal drinking water standards.
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In August 2023, Middlesex and 3M Company (3M) executed a settlement agreement (Settlement Agreement) to resolve a lawsuit Middlesex previously initiated claiming 3M introduced Perfluoroalkyl Substances (PFAS) into the Company’s water supply for its Park Avenue Wellfield Treatment Plant (Park Avenue Plant).
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In June 2023, the Company completed the permanent construction of the entire Park Avenue Plant treatment upgrades and placed the upgrades into operation in full compliance with the new State of New Jersey PFAS water quality regulations. The Middlesex System’s distribution storage facilities are used to supply water to customers at times of peak demand, outages and emergencies.
Added
This resulted in the reclassification of $48.3 million from Regulatory Liabilities to Contributions in Aid of Construction from the December 31, 2023 balance sheet.
Removed
In response to the Coronavirus (COVID-19) pandemic, the Company continues to implement changes it determines are in the best interest of our employees and customers, as well as required to comply with government emergency orders and regulations.
Added
In 2024, the Company also recognized the recovery of $0.9 million for depreciation and $4.1 million for carrying costs associated with the Park Avenue Plant PFAS treatment upgrades, as well as the recovery of $2.6 million of previously incurred operating treatment costs while the Park Avenue Plant PFAS treatment upgrades were in process.
Removed
While the nature of our utility services business requires portions of our workforce to operate in the field and at treatment facilities, we employ and maintain a variety of processes to help ensure the safety of those employees and the public in light of the pandemic.
Added
Costs of $0.6 million for replacing customer-owned lead service lines incurred between July 2024 through December 2024 will be recovered beginning in March 2025 through August 2025. The LSLR surcharge is required to be reset every six months over the life of the LSLR Plan.
Removed
Diversity, Equity & Inclusion (DEI) The Company is committed to DEI based upon our belief that embracing DEI is consistent with our Company culture and benefits all stakeholders by maintaining a workforce with a variety of skills and perspectives as a result of their diverse backgrounds and experiences.
Added
In May 2024, the NJBPU approved a DSIC rate, effective May 26, 2024, that is expected to result in $0.5 million of annual revenue. In November 2024, the NJBPU approved a DSIC rate, effective November 26, 2024, that is expected to result in an additional $0.6 million of annual revenue.
Removed
The Company remains a signatory to CEO Action for Diversity and Inclusion, a business led initiative which encourages companies to cultivate environments that support dialogue on DEI, implement and expand bias education and training and engage boards of directors in the development and evaluation of inclusion and diversity strategies.
Added
A PWAC is a rate mechanism that allows for the 7 recovery of increased purchased water costs between base rate case filings. The PWAC is reset to zero once those increased costs are included in base rates. The new PWAC rate will be effective March 1, 2025.
Removed
The Company will also record in the first quarter of 2024 the recovery of $0.7 million and $2.4 million of prior year depreciation and carrying costs, respectively, as well as the recovery of $1.4 million of prior year costs which were associated with the interim solution to comply with the Notice, all of which were approved in the rate case settlement. 7 For further information on the 3M settlement agreement, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , Regulatory Notice of Non-Compliance and Regulatory Matters .
Added
Tidewater Rate Matters In September 2024, the DEPSC approved Tidewater’s petition to recover up to $2.1 million of costs associated with Tidewater’s obligation to identify and inventory lead service lines throughout Tidewater’s service area, as required by federal law and Delaware regulations. Recovery of these costs began February 1, 2025 and is expected to continue through January 2028.
Removed
The increase, effective October 1, 2022, was on an interim basis and subject to refund with interest, pending final resolution of this matter, which the NJBPU provided in August 2023. In connection with the full recovery of the $2.7 million of additional costs, Middlesex reset its PWAC rate to zero in October 2023.
Added
Through December 31, 2024, Tidewater has spent $1.8 million, which is included in Regulatory Assets. In August 2024, Tidewater filed an application with the DEPSC to increase its general rates for water service. In the application, Tidewater seeks an overall increase in annual operating revenue of $10.3 million or 25.66% over current revenue.
Removed
In December 2021, Middlesex’s petition to the NJBPU seeking permission to increase its base water rates was concluded, based on a negotiated settlement, resulting in an expected increase in annual operating revenues of $27.7 million.
Added
The request for rate increases will allow Tidewater to recover prudently incurred investments made in the last ten years to support continued regulatory compliance, enhanced water quality, service reliability, security and resiliency of the water utility infrastructure assets.
Removed
The approved tariff rates were designed to recover increased operating costs, as well as a return on invested capital of $513.5 million, based on an authorized return on common equity of 9.6%. The increase was implemented in two phases with $20.7 million of the increase effective January 1, 2022 and the remaining $7.0 million effective January 1, 2023.
Added
Effective October 30, 2024, Tidewater received approval of the DEPSC to suspend its DSIC rate and implement an interim rate increase, which is expected to result in approximately $2.5 million of annual revenues, subject to refund pending the outcome of the rate case application.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe face risks of competition from other utilities or other entities authorized by federal, state or local agencies to expand rate-regulated or contracted utility services. Once a state utility regulator grants a franchise to a public utility to serve a specific territory, that utility effectively has an exclusive right to service that territory.
Biggest changeWe face competition from other utilities and service providers which might hinder our growth opportunities and mitigate our future profitability. We face risks of competition from other utilities or other entities authorized by federal, state or local agencies to expand rate-regulated or contracted utility services.
The NJBPU regulates our public utility companies in New Jersey with respect to rates and charges for service, classification of accounts, awards of new service territory, acquisitions, financings and other matters. That means, for example, that we cannot raise the utility rates we charge to our customers without first petitioning the NJBPU and navigating a lengthy administrative process.
The NJBPU regulates our public utility companies in New Jersey with respect to rates and charges for service, classification of accounts, awards of new service territory, acquisitions, financings and other matters. That means, for example, that we cannot raise the utility rates we charge to our customers without first petitioning the NJBPU for approval and navigating a lengthy administrative process.
Losses under these contracts, or our failure or inability to perform or renew such agreements, may have a material adverse effect on our financial condition and results of operations. Capital market conditions and key assumptions may adversely impact the value of our postretirement benefit plan assets and liabilities.
Losses under these contracts, or our failure or inability to perform or renew such agreements, may have a material adverse effect on our financial condition and results of operations. 14 Capital market conditions and key assumptions may adversely impact the value of our postretirement benefit plan assets and liabilities.
Contamination of the water supply or the water service provided to our customers could result in substantial injury or damage to our customers, employees or others and we could be exposed to substantial claims and litigation, which are inherently subject to uncertainties and are potentially subject to unfavorable regulatory and/or legal 13 actions.
Contamination of the water supply or the water service provided to our customers could result in substantial injury or damage to our customers, employees or others and we could be exposed to substantial claims and litigation, which are inherently subject to uncertainties and are potentially subject to unfavorable regulatory and/or legal actions.
We are subject to USEPA regulations under the Federal Safe Drinking Water Act and under the Federal Clean Water Act regarding 14 wastewater services. Regulations under the Safe Drinking Water Act include the Lead and Copper Rule, the maximum contaminant levels established for various volatile organic compounds, the Federal Surface Water Treatment Rule and the Total Coliform Rule.
We are subject to USEPA regulations under the Federal Safe Drinking Water Act and under the Federal Clean Water Act regarding wastewater services. Regulations under the Safe Drinking Water Act include the Lead and Copper Rule, the maximum contaminant levels established for various volatile organic compounds, the Federal Surface Water Treatment Rule and the Total Coliform Rule.
Our computer and communications systems and operations could be damaged or interrupted by natural disasters, cyber-attacks, power loss and internet, telecommunications or data network failures or acts of war or terrorism or similar events or disruptions.
Our computer and communications systems and operations 16 could be damaged or interrupted by natural disasters, cyber-attacks, power loss and internet, telecommunications or data network failures or acts of war or terrorism or similar events or disruptions.
We cannot raise utility rates in our regulated businesses without petitioning the appropriate Public Utility Commissions. If these agencies modify, delay or deny our petition, our revenues will not increase and our earnings will decline unless we are able to reduce costs without degrading service quality.
We cannot raise utility rates in our regulated businesses without petitioning and receiving approval from the appropriate Public Utility Commissions. If these agencies modify, delay or deny our petition, our revenues will not increase and our earnings will decline unless we are able to reduce costs without degrading service quality.
Our regulated utility companies cannot issue debt or equity securities without prior regulatory approval. We require financing from external sources to fund the ongoing capital program for the improvement in our utility system assets and for planned expansion of those systems. We expect to spend approximately $226 million for capital projects through 2026.
Our regulated utility companies cannot issue debt or equity securities without prior regulatory approval. We require financing from external sources to fund the ongoing capital program for the improvement in our utility system assets and for planned expansion of those systems. We expect to spend approximately $387 million for capital projects through 2027.
In addition, we could be subject to claims for damages arising from government enforcement actions or legal actions arising out of interruption of service or perceived human exposure to hazardous substances in our drinking water and water supplies. Such costs could adversely affect our financial results.
In addition, we could be subject to claims for damages arising from government enforcement actions or legal actions arising out of interruption of service or actual or perceived human exposure to contaminants in our drinking water and water supplies. Such costs could adversely affect our financial results.
Government environmental regulatory agencies also regulate our operations in New Jersey and Delaware with respect to wastewater collection, treatment and disposal. Government environmental regulatory agencies’ regulations relating to water quality require us to perform expanded types of testing to ensure our water meets state and federal water quality requirements.
Government environmental regulatory agencies also regulate our operations in New Jersey and Delaware with respect to wastewater collection, treatment and disposal. Government environmental regulatory agencies’ regulations relating to water quality require us to perform additional testing to ensure our water meets state and federal water quality requirements.
This may cause disruption in services and impose operational and regulatory enforcement costs upon us to restore the water to required levels of quality as well as may damage our reputation and cause private litigation claims against us . Our sources of water or water in our distribution systems may become contaminated by naturally-occurring or man-made compounds or other events.
Our water sources or water service provided to customers may become contaminated by naturally-occurring or man-made compounds and events. This may cause disruption in services and impose operational and regulatory enforcement costs upon us to restore the water to required levels of quality as well as may damage our reputation and cause private litigation claims against us .
We are also subject to regulations related to fire protection services in New Jersey and Delaware. In New Jersey there is no state-wide fire protection regulatory agency. However, New Jersey regulations exist as to the size of piping required regarding the provision of fire protection services. In Delaware, fire protection is regulated statewide by the Office of State Fire Marshal.
We are also subject to regulations related to fire protection services in New Jersey and Delaware. In New Jersey there is no state-wide fire protection regulatory agency. However, New Jersey regulations exist as to the size of piping required regarding the provision of fire protection services.
Our revenues and operating results are therefore subject to local regulatory, economic, demographic, competitive and weather conditions in a relatively concentrated geographic area. A change in any of these conditions could make it more costly for us to conduct our business.
Our revenues and operating results are therefore subject to local regulatory, economic, demographic, competitive and weather conditions in a relatively concentrated geographic area. A change in any of these conditions could make it more costly for us to conduct our business or reduce the revenue earned in conducting our business.
Increased climate variability may cause increased precipitation and flooding, increased frequency and severity of storms and other weather events, potential degradation of water quality, decreases in available water supply, changes in water usage patterns and disruptions in service.
Increased climate variability may cause increased precipitation and flooding, increased frequency and severity of storms and droughts and other weather events, any of which may result in degradation of water quality, decreases in available water supply, changes in water usage patterns and disruptions in service.
If, however, we do not generate sufficient cash, we may be required to refinance our obligations or sell additional equity, which may be on terms that are less favorable than we desire. No assurance can be given that any refinancing or sale of equity will be possible when needed, or that we will be able to negotiate acceptable terms.
If, however, we do not generate sufficient cash, we may be required to attempt to refinance our obligations or sell additional equity. 15 No assurance can be given that any refinancing or sale of equity will be possible when needed, or that we will be able to negotiate favorable terms.
Our success depends significantly on the continued individual and collective contributions of our team. If we lose the services of certain members of our team, or are unable to attract and retain qualified personnel in key roles, our operating results could be negatively impacted.
If we lose the services of certain members of our team, or are unable to attract and retain qualified personnel in key roles, our operating results could be negatively impacted.
If water demand by our commercial and industrial customers in our Middlesex System decreases, our financial condition and results of operations could be negatively impacted until completion of a subsequent base rate filing.
If water demand by our commercial and industrial customers in our Middlesex System decreases, our financial condition and results of operations could be negatively impacted until completion of a subsequent base rate filing. We rely on our information technology systems to help manage our operations.
In addition, our failure to comply with certain provisions contained in our trust indentures and loan agreements relating to our outstanding indebtedness could lead to a default under these documents, which could result in an acceleration of our indebtedness. Our business is subject to seasonal fluctuations, which could affect demand for our water service and our revenues.
In addition, our failure to comply with certain provisions contained in our trust indentures and loan agreements relating to our outstanding indebtedness could lead to a default under these documents, which could result in an acceleration of our indebtedness.
Our performance is affected by many factors, some of which are beyond our control. 16 We believe cash generated from operations and, if necessary, borrowings under existing credit facilities, will be sufficient to enable us to make our debt payments as they become due.
We believe cash generated from operations and, if necessary, borrowings under existing credit facilities, will be sufficient to enable us to make our debt payments as they become due.
The cost of compliance with the water and wastewater effluent quality standards depends in part on the limits set in the regulations and on the methods selected to comply with these standards.
In Delaware, fire protection is regulated statewide by the Office of State Fire Marshal. 13 The cost of compliance with the water and wastewater effluent quality standards depends in part on the limits set in the regulations and on the methods selected to comply with these standards.
Climate variability may cause weather volatility in the future, which may impact water usage and related revenue or, may require additional expenditures to reduce risk associated with any increasing storm, flood, drought or other weather occurrences.
We have incurred, and will continue to incur, costs for security measures in efforts to protect against such risks. 12 Climate variability may cause weather volatility in the future, which may impact water usage and related revenue or, may require additional expenditures to reduce risk associated with any increasing storm, flood, drought or other weather occurrences.
Possible impacts associated with a cyber-incident may include remediation costs related to lost, stolen, or compromised data, repairs to data processing systems, increased cyber security protection costs, adverse effects on our compliance with regulatory and environmental laws and regulations, including standards for drinking water, litigation and reputational damage. 18 We depend significantly on the technical and management services of our team, and the departure of any of certain persons could cause our operating results to temporarily be short of our expectations.
Possible impacts associated with a cyber-incident may include remediation costs related to lost, stolen, or compromised data, repairs to data processing systems, increased cyber security protection costs, adverse effects on our compliance with regulatory and environmental laws and regulations, including standards for drinking water, litigation and reputational damage.
Our ability to pay the principal and interest on our indebtedness as it comes due will depend upon our current and future performance.
Our ability to pay the principal and interest on our indebtedness as it comes due will depend upon our current and future performance. Our performance is affected by many factors, some of which are beyond our control.
We expect our revenues to increase from customer growth for our regulated water operations as a result of anticipated construction, sale and close of new housing units.
New housing starts and home sale closings are one element that impacts our rate of growth and therefore, may not meet our expectations. We expect our revenues to increase from customer growth for our regulated water operations as a result of anticipated construction, sale and close of new housing units.
Also, third parties entering into agreements to operate municipal utility systems may adversely affect the management of our long-term agreements to supply water or wastewater services on a contract basis to those municipalities, which could adversely affect our financial results. 15 We have short-term and long-term contractual obligations for water, wastewater and storm water system operation and maintenance under which we may incur costs in excess of payments received.
Competing entities have challenged, and may challenge in the future, our applications for new franchises. Also, third parties entering into agreements to operate municipal utility systems may adversely affect the management of our long-term agreements to supply water or wastewater services on a contract basis to those municipalities, which could adversely affect our financial results.
Negative impacts to our profitability and/or our reputation may occur even if we are not responsible for the contamination or the consequences arising out of human exposure to contamination or hazardous substances in the water supplies. Pending or future claims against us could have a material adverse impact on our financial condition, results of operations and cash flows.
Previously, claims have been brought against us alleging our customers received contaminated water. Negative impacts to our profitability and/or our reputation may occur even if we are not responsible for the contamination or the consequences arising out of human exposure to contamination or hazardous substances in the water supplies.
An element of our growth strategy is the acquisition of water and wastewater assets, operations, contracts or companies. Any pending or future acquisitions we decide to undertake will involve risks. The acquisition and/or operation of water and wastewater systems is an element of our growth strategy.
Any negative impact to these factors, either individually or a combination thereof, may have a material adverse effect on our financial condition and results of operations. An element of our growth strategy is the acquisition of water and wastewater assets, operations, contracts or companies. Any pending or future acquisitions we decide to undertake will involve risks.
USA-PA and USA operate and maintain water and wastewater systems for three New Jersey municipalities under 10-year contracts expiring in 2028, 2030 and 2032, respectively. These contracts do not protect us against incurring costs in excess of revenues we earn pursuant to the contracts. There can be no absolute assurance we will not experience losses resulting from these contracts.
These contracts do not protect us against incurring costs in excess of revenues we earn pursuant to the contracts. There can be no assurance we will not experience losses resulting from these contracts.
We provide ongoing training and communications to our employees about threats to our water supply, our assets and related systems and our employees’ personal safety. We have incurred, and will continue to incur, costs for security measures in efforts to protect against such risks.
We provide ongoing training and communications to our employees about threats to our water supply, our assets and related systems and our employees’ personal safety.
This may result in the imposition of fines from environmental regulators or restrictions on our operations which could curtail our ability to upgrade or replace utility system assets. We face competition from other utilities and service providers which might hinder our growth opportunities and mitigate our future profitability.
This may result in the imposition of fines from environmental regulators or restrictions on our operations which could curtail our ability to upgrade or replace utility system assets and have a material adverse effect on our financial condition and results of operations.
Market factors can adversely affect the rate of return on assets held in trusts to satisfy our future postretirement benefit obligations, as well as negatively affect interest rates, which impacts the discount rates used in the determination of our postretirement benefit actuarial valuations.
Market factors can adversely affect (1) the rate of return on assets held in trusts to satisfy our future postretirement benefit obligations and (2) interest rates. Reduced rates of return can increase the level of contributions required by us to satisfy future postretirement benefit obligations.
The necessity for ongoing physical and technological security has resulted, and may continue to result, in increased operating costs. Because of physical and technological threats to the health and security of the United States of America, we employ procedures to review and modify security measures.
Because of physical and technological threats to the health and security of the United States of America, we employ physical and technological security measures to guard against such threats and have implemented procedures to review and modify security measures.
Although a new franchise offers some protection against competitors, the pursuit of franchises is often competitive, particularly in Delaware, where new franchises may be awarded to utilities based upon competitive negotiation. Competing entities have challenged, and may challenge in the future, our applications for new franchises.
Once a state utility regulator grants a franchise to a public utility to serve a specific territory, that utility effectively has an exclusive right to service that territory. Although a new franchise offers some protection against competitors, the pursuit of franchises is often competitive, particularly in Delaware, where new franchises may be awarded to utilities based upon competitive negotiation.
This strategy depends on identifying suitable opportunities that meet our risk/reward profile and reaching mutually agreeable terms with acquisition candidates or contract parties. Further, acquisitions may result in dilution in the value of our equity securities, incurrence of debt and contingent liabilities and fluctuations in financial results.
The acquisition and/or operation of additional water and wastewater systems is an element of our growth strategy. This strategy depends on identifying suitable opportunities that meet our risk and reward profile and reaching mutually agreeable terms with acquisition candidates or contract parties.
These factors may adversely affect our ability to supply water in sufficient quantities to our customers. Governmental drought restrictions may result in decreased customer demand for water services and can adversely affect our revenue and earnings. Our water sources or water service provided to customers may become contaminated by naturally-occurring or man-made compounds and events.
These factors may adversely affect our ability to supply water in sufficient quantities to our customers. Governmental drought restrictions, heightened levels of rainfall and temperatures during the typically warmer months that are cooler than normal may result in decreased customer demand for water services and can adversely affect our revenue and earnings.
In addition, the assets, operations, contracts or companies we acquire may not achieve the revenues and profitability projected. Our ability to achieve organic customer growth in our market area is dependent on the residential building market. New housing starts and home sale closings are one element that impacts our rate of growth and therefore, may not meet our expectations.
Even if an acquisition is successfully consummated, or we enter into an agreement to operate additional water or wastewater systems, the assets, operations, contracts or companies we acquire may not achieve the projected revenues and profitability. Our ability to achieve organic customer growth in our market area is dependent on the residential building market.
This could be used by the Board of Directors to discourage, delay or prevent an acquisition the Board of Directors determines is not in the best interest of the common shareholders. 17 We identified material weaknesses in our internal controls which, if not remediated appropriately or timely, could result in loss of investor confidence and adversely impact our stock price.
This could be used by the Board of Directors to discourage, delay or prevent an acquisition the Board of Directors determines is not in the best interest of the common shareholders. General Risks General economic conditions may materially and adversely affect our financial condition and results of operations.
In addition, changes in demographics, such as increases in life expectancy assumptions, can increase future postretirement benefit obligations. Any negative impact to these factors, either individually or a combination thereof, may have a material adverse effect on our financial condition and results of operations.
Changes in interest rates impact the discount rates used in the determination of our postretirement benefit actuarial valuations. In addition, changes in demographics, such as increases in life expectancy assumptions, can increase future postretirement benefit obligations.
Removed
Demand for our water during the warmer months is generally greater than during colder months due primarily to additional consumption of water in connection with irrigation systems, swimming pools, cooling systems and other outdoor water use. Throughout the year, and particularly during typically warmer months, demand may vary with temperature and rainfall levels.
Added
Our sources of water or water in our distribution systems have in the past and in the future may again become contaminated by naturally-occurring or man-made compounds or other contaminants.
Removed
In the event that temperatures during the typically warmer months are cooler than normal, or if there is more rainfall than normal, the demand for our water may decrease and adversely affect our revenues. General economic conditions may materially and adversely affect our financial condition and results of operations.
Added
Pending or future claims against us could have a material adverse impact on our financial condition, results of operations and cash flows. The necessity for ongoing physical and technological security has resulted, and may continue to result, in increased operating costs.
Removed
Internal controls related to the operation of technology systems are critical to maintaining adequate internal control over financial reporting.
Added
We have short-term and long-term contractual obligations for water, wastewater and storm water system operation and maintenance under which we may incur costs in excess of payments received. USA-PA and USA operate and maintain water and wastewater systems for three New Jersey municipalities under 10-year contracts expiring in 2028, 2030 and 2032, respectively.
Removed
During the fourth quarter of 2023, management identified a material weakness in internal control related to ineffective information technology general controls (ITGCs) in the areas of user access and change management over certain information technology (IT) systems that support the Company’s financial reporting processes.
Added
Acquisitions may result in dilution in the value of our equity securities, incurrence of debt and contingent liabilities and fluctuations in financial results. In addition, identifying suitable opportunities, negotiating terms, and integrating operations may require management attention without any assurance of achieving a projected outcome.
Removed
Certain of those controls were found to be deficient because of a lack of sufficient IT control processes designed to prevent or detect unauthorized changes in applications and data in selected IT environments. In December 2023, management implemented various auditing and monitoring solutions that provide greater transparency into changes made within our IT systems.
Added
We depend significantly on the technical and management services of our team, and the departure of any of certain persons could cause our operating results to temporarily be short of our expectations. Our success depends significantly on the continued individual and collective contributions of our team.
Removed
These control solutions are supported by a timely review process that focuses on the proper authorization and approval of IT system changes. Due to the timing of implementing the solutions, the controls implemented did not operate over a sufficient time period to adequately test and validate the remediation and reassess other ITGCs, which may require further remediation actions.
Removed
In addition, there were ineffective controls related to income tax accounting for a non-routine transaction, which management has identified as a material weakness in internal controls over financial reporting. Therefore, management concluded that our internal control over financial reporting was not effective as of December 31, 2023.
Removed
Until remediation measures are completed, fully tested and determined effective, we will not be able to conclude that the material weaknesses have been remediated.
Removed
If we are unable to determine that our remediation measures are effective or otherwise remediate the material weaknesses, or are otherwise unable to maintain effective internal control over financial reporting or disclosure controls and procedures, our ability to record, process and report financial information accurately, and to prepare financial statements within required time periods, could be adversely affected, which could subject us to litigation or investigations requiring management resources and payment of legal and other expenses, negatively affecting investor confidence in our financial statements and adversely impacting our stock price.
Removed
General Risks We rely on our information technology systems to help manage our operations.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn connection with these relationships, we perform due diligence, cyber risk scoring, cybersecurity related contractual obligations, and periodic reviews of third-party control environments to ensure alignment with the Company's risk exposure, business requirements, and risk tolerances. We extend our cybersecurity focus to third-party service providers by evaluating and monitoring their cybersecurity risks.
Biggest changeThird-Party Relationships The Company utilizes partners and third-party service providers to help deliver safe and reliable water and wastewater services across its regulated operations. In connection with these relationships, we perform due diligence, cyber risk scoring, cybersecurity related contractual obligations, and periodic reviews of third-party control environments to ensure alignment with the Company's risk exposure, business requirements, and risk tolerances.
All employees participate in required periodic training with respect to cybersecurity risk and risk mitigation. Our Chief Technology Officer (CTO), with over 25 years of experience in various disciplines of information technology, oversees the cybersecurity program.
All employees participate in required periodic training with respect to cybersecurity risk and risk mitigation. 17 Our Chief Technology Officer (CTO), with over 25 years of experience in various disciplines of information technology, oversees the cybersecurity program.
ITEM 1C. CYBERSECURITY Cybersecurity Program The Company’s cybersecurity program is an integral element of the Company's overarching strategic plan. The robustness of the cybersecurity initiatives directly impact the realization of the Company's mission, vision, and goals.
ITEM 1C. CYBERSECURITY Cybersecurity Program The Company’s cybersecurity program is an integral element of the Company's overarching strategic plan and risk management system. The robustness of the cybersecurity initiatives directly impact the realization of the Company's mission, vision, and goals.
Key elements of our cybersecurity risk mitigation approach are comprised of: ● A dedicated cybersecurity team; ● Collaboration with a third-party managed detection and response company for 24/7 monitoring and response; ● Cybersecurity insurance to cover a portion of losses and damages resulting from cyber-attacks or security breaches; ● An incident response team that is comprised of various departments required for an effective response; ● Conducting periodic drills and exercises, including industry collaborations and participation from the executive team; ● Continuous information security awareness training and phishing simulation exercises; ● Regular security assessments to address evolving risks and threats; ● Deployment of automation solutions to strengthen detection and response capabilities; and ● Utilizing services offered by the United States Department of Homeland Security to assist with resiliency planning. 20 Third-Party Relationships The Company utilizes partners and third-party service providers to help deliver safe and reliable water and wastewater services across its regulated operations.
Key elements of our cybersecurity risk mitigation approach are comprised of: ● A dedicated cybersecurity team; ● Collaboration with a third-party managed detection and response company for 24/7 monitoring and response; ● Cybersecurity insurance to cover a portion of losses and damages resulting from cyber-attacks or security breaches; ● An incident response team that is comprised of various departments required for an effective response; 18 ● Conducting periodic drills and exercises, including industry collaborations and participation from the executive team; ● Continuous information security awareness training and phishing simulation exercises; ● Regular security assessments to address evolving risks and threats; ● Deployment of automation solutions to strengthen detection and response capabilities; and ● Utilizing services offered by the United States Department of Homeland Security to assist with resiliency planning.
Regular assessments, conducted both internally and by third parties, evaluate our program against industry standards, including the National Institute of Standards and Technology Cybersecurity Standard and the Risk Management Framework.
Our cybersecurity program aims to protect the uninterrupted availability of critical information technology resources. Regular assessments, conducted both internally and by third parties, evaluate our program against industry standards, including the National Institute of Standards and Technology Cybersecurity Standard and the Risk Management Framework.
Leveraging information technology systems, we collect, process and safeguard sensitive data and utilize automated tools to operate our plants. Identified as a critical risk factor, cybersecurity threats encompass potential hazards such as malicious code, employee misconduct, advanced persistent threats, fraud, and phishing attacks.
Leveraging information technology systems, we collect, process and safeguard sensitive data and utilize automated tools to operate our plants. Cybersecurity threats encompass potential hazards such as malicious code, employee misconduct, advanced persistent threats, fraud, and phishing attacks. These risks have the potential to lead to information technology system failures, threat to water supply, or compromise of sensitive information.
High-risk vendors undergo continuous monitoring, and we maintain contractual agreements that mandate our third-party providers’ commitment to managing cybersecurity risks, providing incident notifications, and being subject to cybersecurity audits. Cybersecurity Governance The Corporate Governance and Nominating Committee of the Board is tasked with overseeing cybersecurity risk.
We extend our cybersecurity focus to third-party service providers by evaluating and monitoring their cybersecurity risks. High-risk vendors undergo continuous monitoring, and we maintain contractual agreements that mandate our third-party providers’ commitment to managing cybersecurity risks, providing incident notifications, and being subject to cybersecurity audits.
Removed
These risks have the potential to lead to information technology system failures, threat to water supply, or compromise of sensitive information. 19 Our cybersecurity program aims to protect the uninterrupted availability of critical information technology resources.
Added
Cybersecurity Governance The Corporate Governance and Nominating Committee of the Board is tasked with serving as the Board of Director’s primary body to oversee management’s risk identification, management and mitigation strategies related to, among other risks, information technology, cybersecurity and data security risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe our water and wastewater utility plant facilities are sufficient for the operations of the Company. Middlesex System The Middlesex System’s principal source of surface supply is the Delaware & Raritan Canal owned by the State of New Jersey and operated as a water resource by the NJWSA.
Biggest changeMiddlesex System The Middlesex System’s principal source of surface supply is the Delaware & Raritan Canal owned by the State of New Jersey and operated as a water resource by the NJWSA. Water is withdrawn from the Delaware & Raritan Canal at New Brunswick, New Jersey through our intake and pumping station, located on state-owned land bordering the canal.
Water is transported to our customers through 917 miles of transmission and distribution mains. Storage facilities include 48 tanks, with an aggregate capacity of 9.9 million gallons. The Delaware office property, located on an eleven-acre parcel owned by White Marsh, consists of two office buildings totaling approximately 17,000 square feet.
Water is transported to our customers through 938 miles of transmission and distribution mains. Storage facilities include 48 tanks, with an aggregate capacity of 9.9 million gallons. The Delaware office property, located on an eleven-acre parcel owned by White Marsh, consists of two office buildings totaling approximately 17,000 square feet.
The leased space, which is under contract through 2028, houses our corporate administrative functions including executive, accounting, customer service and billing, engineering, human resources, information technology and legal. Tidewater System The Tidewater System is comprised of 85 production plants that vary in pumping capacity from 46,000 gallons per day to 4.4 mgd.
The leased space, which is under contract through December 2029, houses our corporate administrative functions including executive, accounting, communications, customer service and billing, engineering, human resources, information technology and legal. Tidewater System The Tidewater System is comprised of 85 production plants that vary in pumping capacity from 46,000 gallons per day to 4.4 mgd.
It has a dedicated substation and emergency power supply provided by a diesel-driven generator. It pumps from the 10 million gallon distribution storage reservoir directly into the distribution system.
In addition, there is a 15 mgd auxiliary pumping station on-site at the CJO Plant location. It has a dedicated substation and emergency power supply provided by a diesel-driven generator. It pumps from the 10 million gallon distribution storage reservoir directly into the distribution system.
Also included are a 58,600 foot transmission main and a 38,800 foot transmission main, augmented with a long-term, non-exclusive agreement with East Brunswick to transport water through the East Brunswick system to several of our other contract customers. 21 The Middlesex System’s storage facilities consist of a 10 million gallon reservoir at the CJO Plant, 5 million gallon and 2 million gallon reservoirs in Edison and a 2 million gallon reservoir at the Park Avenue Plant.
Also included are a 58,600 foot transmission main and a 38,800 foot transmission main, augmented with a long-term, non-exclusive agreement with East Brunswick to transport water through the East Brunswick system to several of our other contract customers.
USA-PA, USA and White Marsh Our non-regulated subsidiaries, namely USA-PA, USA and White Marsh, do not own utility plant property.
Its wastewater collection system is comprised of approximately 24 miles of sewer lines. USA-PA, USA and White Marsh Our non-regulated subsidiaries, namely USA-PA, USA and White Marsh, do not own utility plant property.
Water is withdrawn from the Delaware & Raritan Canal at New Brunswick, New Jersey through our intake and pumping station, located on state-owned land bordering the canal. Water is transported through two raw water pipelines for treatment and distribution at our CJO Plant in Edison, New Jersey.
Water is transported through two raw water pipelines for treatment and distribution at our CJO Plant in Edison, New Jersey.
The firm design capacity of the CJO Plant is 55 mgd (60 mgd maximum capacity). The five electric motor-driven, vertical turbine pumps presently installed have an aggregate capacity of 85 mgd. In addition, there is a 15 mgd auxiliary pumping station on-site at the CJO Plant location.
There is a State of New Jersey certified on-site laboratory capable of performing bacteriological, chemical, process control and advanced instrumental chemical sampling and analysis. 19 The design capacity of the CJO Plant is 55 mgd (60 mgd maximum capacity). The five electric motor-driven, vertical turbine pumps presently installed have an aggregate capacity of 85 mgd.
The CJO Plant also includes a computerized Supervisory Control and Data Acquisitions system to monitor and control the CJO Plant and the water supply and distribution system in the Middlesex System. There is a State of New Jersey certified on-site laboratory capable of performing bacteriological, chemical, process control and advanced instrumental chemical sampling and analysis.
The CJO Plant also includes a computerized Supervisory Control and Data Acquisitions system to monitor and control the CJO Plant and the water supply and distribution system in the Middlesex System.
Removed
Its wastewater collection system is comprised of approximately 24 miles of sewer lines. Fortescue System The Fortescue System includes two well sites, which are located in Downe Township, Cumberland County, New Jersey. Water is transported to its customers through our 4.2 mile distribution system.
Added
The Middlesex System’s storage facilities consist of a 10 million gallon reservoir at the CJO Plant, 5 million gallon and 2 million gallon reservoirs in Edison and a 2 million gallon reservoir at the Park Avenue Plant.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn 2021, the Company was served with two PFOA-related class action lawsuits seeking restitution for medical, water filter replacement and other claimed related costs. These lawsuits are in the early stages of the legal process and their ultimate resolution cannot be predicted at this time.
Biggest changeIn 2021, the Company was served with two PFOA-related class action lawsuits seeking restitution for medical, water filter replacement and other claimed related costs. On August 30, 2024, the parties to the Vera et al. v. Middlesex Water Company and Lonsk et al v.
However, Middlesex was required to notify its affected customers and the Company complied in due course. Water currently being delivered to customers is in compliance with all USEPA and NJDEP drinking water standards, including the newly established water quality standard for PFOA.
However, Middlesex was required to notify its affected customers and the Company 20 complied in due course. Water currently being delivered to customers is in compliance with all USEPA and NJDEP drinking water standards, including the newly established water quality standard for PFOA.
ITEM 3. LEGAL PROCEEDINGS. In September 2021, the NJDEP issued a Notice to Middlesex based on self-reporting by Middlesex that the level of PFOA in water treated at its Park Avenue Plant in New Jersey exceeded a recently promulgated NJDEP standard effective in 2021. Neither the NJDEP nor Middlesex characterized this exceedance as an acute health emergency.
ITEM 3. LEGAL PROCEEDINGS. In September 2021, the NJDEP issued a Notice to Middlesex based on self-reporting by Middlesex that the level of Perfluorooctanoic Acid (PFOA) in water treated at its Park Avenue Plant in New Jersey exceeded a recently promulgated NJDEP standard effective in 2021. Neither the NJDEP nor Middlesex characterized this exceedance as an acute health emergency.
Removed
The following summarizes the legal complaints brought against Middlesex related to this matter: 22 Vera et al. v.
Added
Middlesex Water Company litigations entered into a signed Settlement Term Sheet (Term Sheet) in a step towards resolution of both matters. The parties are in the process of memorializing the settlement into a Settlement Agreement that is expected to be completed by the parties in the first quarter of 2025.
Removed
Middlesex Water Company - On October 29, 2021, a complaint was filed in the Superior Court of New Jersey, Middlesex County seeking restitution, equitable and injunctive relief for the costs of (1) seeking medical advice; (2) installing home water filters; (3) purchasing bottled water; and (4) court-supervised medical monitoring/testing going forward.
Added
The Company does not believe that the Term Sheet and the anticipated Settlement Agreement, once executed, will have any material financial or operational impact to Middlesex. The Company is a defendant in other lawsuits in the normal course of business.
Removed
On November 19, 2021, a first amended complaint was filed together with motions for Class Certification and Injunctive Relief. On December 17, 2021, the parties entered into a Stipulation where it was agreed that Plaintiff’s motion for injunctive relief would be withdrawn.
Removed
On February 16, 2022, Middlesex filed a Motion To Dismiss Plaintiffs’ complaint for: (1) failure to include an indispensable party, 3M, whom Middlesex claims is the source of the PFOA in the Company’s wells; and (2) failure to state legally cognizable claims in support of all of the counts set forth in the complaint.
Removed
Plaintiff’s motion for Class Certification and further discovery was postponed pending the outcome of Middlesex’s Motion To Dismiss. On April 21, 2022, the Judge granted Vera’s Motion for Class Certification and granted in part and denied in part Middlesex’s Motion to Dismiss. On May 4, 2022, the Company impleaded 3M as a third-party defendant in this lawsuit.
Removed
On July 6, 2022, the Company filed a Motion to Remove this case from New Jersey Superior Court to the United States District Court for the District of New Jersey.
Removed
Vera challenged Middlesex’s Motion To Remove at the United States District Court for the District of New Jersey in an attempt to remand the case back to the Superior Court of New Jersey.
Removed
On March 21, 2023, the United States District Court for the District of New Jersey issued an order remanding the case back to the Superior Court of New Jersey. Discovery is underway in this matter.
Removed
On August 29, 2023, the Company executed a settlement agreement with 3M to resolve a lawsuit related to perfluoroalkyl substances in which Middlesex and 3M agreed to enter into joint mediation to resolve this and another PFOA-related class action lawsuit against Middlesex and 3M seeking restitution for medical, water replacement and other claimed related costs.
Removed
A mediation session among the parties was held on November 17, 2023. The Superior Court of New Jersey has set a deadline of February 29, 2024 for the parties to submit a final settlement agreement with the Court should the parties be able to reach a settlement. Lonsk et al. v.
Removed
Middlesex Water Company and 3M Company - On November 9, 2021, a complaint was filed in the United States District Court, District of New Jersey seeking Class Certification and restitution, equitable and injunctive relief for the costs of (1) seeking medical advice; (2) installing home water filters; (3) purchasing bottled water; and (4) all other claimed related costs.
Removed
On December 23, 2021, the parties agreed to postpone the filing date of Middlesex’s and 3M’s answers to the complaint to January 14, 2022 at the earliest. This filing date was subsequently further postponed to March 1, 2022. On March 4, 2022, Middlesex filed a Motion to Dismiss Plaintiffs’ complaint. On April 15, 2022, Plaintiffs filed an Amended Complaint.
Removed
On July 7, 2022, this case was reassigned to a new trial judge at the United States District Court for the District of New Jersey. On October 31, 2022, the trial judge in this matter dismissed Middlesex’s and 3M’s motions to dismiss the Plaintiffs’ complaint and Middlesex and 3M filed answers to Plaintiffs’ amended complaint on November 21, 2022.
Removed
On August 29, 2023 the Company executed a settlement agreement with 3M to resolve a lawsuit related to perfluoroalkyl substances in which Middlesex and 3M agreed to enter into a joint mediation, scheduled for November 2023, to resolve this and another PFOA-related class action lawsuit against Middlesex and 3M seeking restitution for medical, water replacement and other claimed related costs.
Removed
Discovery in this case is currently underway and continues. A mediation session among the parties was held on November 17, 2023. The Superior Court of New jersey has set a deadline of March 4, 2024 for the parties to submit a final settlement agreement with the Court should the parties be able to reach a settlement.
Removed
For further discussion of the 3M settlement and the case above, see Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations, Regulatory Notice of Non-Compliance. The Company is a defendant in other lawsuits in the normal course of business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe Company maintains a long-term incentive compensation plan for certain management employees where awards are made in the form of restricted common stock.
Biggest changeSince the inception of the Investment Plan and its predecessor plan, the Company has periodically replenished the level of authorized shares in the plans. The Company maintains a long-term incentive compensation plan for certain management employees where awards are made in the form of restricted common stock.
Set forth below is a graph comparing the yearly change in the cumulative total return (which includes reinvestment of dividends) of a $100 investment for the Company’s common stock, a peer group of investor-owned water utilities, and the S&P 500 Stock Index for the period of five years commencing December 31, 2018.
Set forth below is a graph comparing the yearly change in the cumulative total return (which includes reinvestment of dividends) of a $100 investment for the Company’s common stock, a peer group of investor-owned water utilities, and the S&P 500 Stock Index for the period of five years commencing December 31, 2019.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. The Company’s common stock is traded on the NASDAQ Stock Market, LLC, under the symbol MSEX. As of December 31, 2023, there were 1,717 holders of record. The Company has paid dividends on its common stock each year since 1912.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. The Company’s common stock is traded on the NASDAQ Stock Market, LLC, under the symbol MSEX. As of December 31, 2024, there were 1,631 holders of record. The Company has paid dividends on its common stock each year since 1912.
The maximum number of shares authorized for award under this plan is 0.3 million shares, of which approximately 75% remain available for future issuance. The Company maintains a stock plan for its independent members of the Board of Directors as a component of their compensation.
The maximum number of shares authorized for award under this plan is 0.3 million shares, of which approximately 70% remain available for future issuance as of December 31, 2024. The Company maintains a stock plan for its independent members of the Board of Directors as a component of their compensation.
In 2023, shares of the Company’s common stock valued at $0.4 million were granted and issued to the Independent Directors. The maximum number of shares authorized for grant under this plan is 0.1 million. Approximately 42% of the authorized shares remain available for future issuance.
In 2024, shares of the Company’s common stock valued at $0.4 million were granted and issued to the Independent Directors. The maximum number of shares authorized for grant under this plan is 0.1 million. Approximately 34% of the authorized shares remain available for future issuance as of December 31, 2024.
The S&P 500 Stock Index measures the stock performance of 500 large companies listed on stock exchanges in the United States. 24 COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Middlesex Water Company, the S&P 500 Stock Index and a Peer Group* * Peer group includes American States Water Company, Artesian Resources Corp., California Water Service Group, Global Water Resources Inc, SJW Corp., York Water Company and Middlesex. 2018 2019 2020 2021 2022 2023 Middlesex Water Company 100.00 121.14 140.27 235.68 156.10 132.41 S&P 500 Stock Index 100.00 131.49 155.68 200.37 164.08 207.21 Peer Group 100.00 123.86 126.00 164.71 148.74 127.88
The S&P 500 Stock Index measures the stock performance of 500 large companies listed on stock exchanges in the United States. 22 COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Middlesex Water Company, the S&P 500 Stock Index and a Peer Group* * Peer group includes American States Water Company, Artesian Resources Corp., California Water Service Group, Global Water Resources Inc, SJW Corp., York Water Company and Middlesex. 2019 2020 2021 2022 2023 2024 Middlesex Water Company 100.00 115.79 194.55 128.86 109.30 89.61 S&P 500 Stock Index 100.00 118.40 152.39 124.79 157.59 197.02 Peer Group 100.00 101.73 132.98 120.09 103.25 91.21
Removed
Since the inception of the Investment Plan and its predecessor plan, the Company has periodically replenished the level of authorized shares in the plans. Currently, 0.7 million shares remain registered with the SEC and available for issuance to participants under the Investment Plan. The Company raised approximately $12.1 million through the issuance of shares under the Investment Plan during 2023.
Added
The conversion feature of the Company’s no par $7.00 Series Cumulative and Convertible Preferred Stock allows each security holder to convert one convertible preferred share for twelve shares of the Company's common stock.
Removed
On March 1, 2023, the Company began offering shares of its common stock for purchase at a 3% discount to participants in the Investment Plan. The discount offering ended December 1, 2023. The discount applied to all common stock purchases made under the Investment Plan during that time period, whether by optional cash payment or by dividend reinvestment.
Added
In 2024, 4,275 shares of the Company’s no par $7.00 Series Cumulative and Convertible Preferred Stock were converted into 51,300 shares (approximately $0.4 million) of the Company’s common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations for 2023 as Compared to 2022 (In Millions) Years Ended December 31, 2023 2022 Regulated Non- Regulated Total Regulated Non- Regulated Total Revenues $ 154.0 $ 12.3 $ 166.3 $ 150.6 $ 11.8 $ 162.4 Operations and maintenance expenses 74.8 8.4 83.2 70.8 8.3 79.1 Depreciation expense 24.9 0.3 25.2 22.8 0.2 23.0 Other taxes 18.5 0.2 18.7 18.0 0.2 18.2 Gain on Sale of Subsidiary — — — 5.2 — 5.2 Operating income 35.8 3.4 39.2 44.2 3.1 47.3 Other income (expense), net 6.3 0.2 6.5 7.4 0.3 7.7 Interest expense 13.1 — 13.1 9.4 — 9.4 Income taxes (0.1 ) 1.1 1.0 2.0 1.2 3.2 Net income $ 29.1 $ 2.5 $ 31.6 $ 40.2 $ 2.2 $ 42.4 30 Operating Revenues Operating revenues for the year ended December 31, 2023 increased $3.8 million from the same period in 2022 due to the following factors: ● Middlesex System revenues increased by $4.2 million due to the implementation of the final phase of the 2021 base rate case increase on January 1, 2023 and the PWAC rate increase offset by lower weather-driven demand across all customer classes (for further discussion of Middlesex’s 2021 base and PWAC rate increases, see Rates, Middlesex above); ● Tidewater System revenues decreased by $0.9 million due to a DEPSC ordered rate reduction in September 2022, lower customer connection fees and lower weather-driven customer demand partially offset by an increase in customers (for further information on the Tidewater rate reduction, see Rates, Tidewater above ) ; ● Pinelands System revenues increased $0.2 million due to the implementation of a base rate increase effective April 15, 2023 (for further discussion of Pinelands 2023 base rate increase, see Rates, Pinelands above) ; and ● Non-regulated revenues increased $0.3 million, primarily due to higher supplemental contract services.
Biggest changeResults of Operations for 2023 as Compared to 2022 (In Millions) Years Ended December 31, 2023 2022 Regulated Non- Regulated Total Regulated Non- Regulated Total Revenues $ 154.0 $ 12.3 $ 166.3 $ 150.6 $ 11.8 $ 162.4 Operations and maintenance expenses 74.8 8.4 83.2 70.8 8.3 79.1 Depreciation expense 24.9 0.3 25.2 22.8 0.2 23.0 Other taxes 18.5 0.2 18.7 18.0 0.2 18.2 Gain on sale of subsidiary — — — 5.2 — 5.2 Operating income 35.8 3.4 39.2 44.2 3.1 47.3 Other income (expense), net 6.3 0.2 6.5 7.4 0.3 7.7 Interest expense 13.1 — 13.1 9.4 — 9.4 Income taxes (0.1 ) 1.1 1.0 2.0 1.2 3.2 Net income $ 29.1 $ 2.5 $ 31.6 $ 40.2 $ 2.2 $ 42.4 Operating Revenues Operating revenues for the year ended December 31, 2023 increased $3.8 million from the same period in 2022 due to the following factors: ● Middlesex System revenues increased by $4.2 million due to the implementation of the final phase of the 2021 base rate case increase on January 1, 2023 and the PWAC rate increase offset by lower weather-driven demand across all customer classes; ● Tidewater System revenues decreased by $0.9 million due to a DEPSC ordered rate reduction in September 2022, lower customer connection fees and lower weather-driven customer demand partially offset by an increase in customers; ● Pinelands System revenues increased $0.2 million due to the implementation of a base rate increase effective April 15, 2023; and ● Non-regulated revenues increased $0.5 million, primarily due to higher supplemental contract services. 29 Operation and Maintenance Expense Operation and maintenance expenses for the year ended December 31, 2023 increased $4.0 million from the same period in 2022 due to increased variable production costs due to weather-driven changes in water quality and higher chemical prices, higher outside service costs due to production instrumentation calibration activities, increases in labor costs due to wage increases and higher bad debt expense due to higher anticipated customer receivable write-offs.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion should be read in conjunction with the Company’s consolidated financial statements and related notes. Operations Middlesex Water Company (Middlesex or the Company) has operated as a water utility in New Jersey since 1897 and in Delaware through our wholly-owned subsidiary, Tidewater Utilities, Inc.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion should be read in conjunction with the consolidated financial statements and related notes. Operations Middlesex Water Company (Middlesex or the Company) has operated as a water utility in New Jersey since 1897 and in Delaware through our wholly-owned subsidiary, Tidewater Utilities, Inc.
In October 2023, the NJBPU approved Middlesex’s petition for a Distribution System Improvement Charge (DSIC) Foundation Filing, which is a prerequisite to implementing a DSIC rate that allows water utilities to recover 28 investments in, and generate a return on, qualifying capital improvements to their water distribution system made between base rate proceedings.
In October 2023, the NJBPU approved Middlesex’s petition for a Distribution System Improvement Charge (DSIC) Foundation Filing, which is a prerequisite to implementing a DSIC rate that allows water utilities to recover investments in, and generate a return on, qualifying capital improvements to their water distribution system made between base rate proceedings.
We have no reason to believe any of the deferred items that are recorded will be treated differently by the regulators in the future. 38 Revenues Revenues from our regulated customers, which include amounts billed quarterly to residential customers and monthly to industrial, commercial, fire-protection and wholesale customers, also include unbilled amounts based upon estimated usage from the date of the last meter reading to the end of the accounting period.
We have no reason to believe any of the deferred items that are recorded will be treated differently by the regulators in the future. 34 Revenues Revenues from our regulated customers, which include amounts billed quarterly to residential customers and monthly to industrial, commercial, fire-protection and wholesale customers, also include unbilled amounts based upon estimated usage from the date of the last meter reading to the end of the accounting period.
Changes in customer water usage habits, as well as increases in capital expenditures and operating costs, are significant factors in determining the timing and extent of rate increase requests. Our investments in system infrastructure continue to grow significantly and our operating costs are anticipated to increase in 2024 and 2025 in a variety of categories.
Changes in customer water usage habits, as well as increases in capital expenditures and operating costs, are significant factors in determining the timing and extent of rate increase requests. Our investments in system infrastructure continue to grow significantly and our operating costs are anticipated to increase in 2025 and 2026 in a variety of categories.
The primary assumptions used for determining future retirement benefit plans’ obligations and costs, which are reviewed and revised as needed each year, are as follows: ● Discount Rate - calculated based on market rates for long-term, high-quality corporate bonds specific to the expected duration of our Pension Plan and Other Benefits Plan’s liabilities; ● Compensation Increase - based on management projected future employee compensation increases; ● Long-Term Rate of Return - determined based on expected returns from our asset allocation for our Pension Plan and Other Benefits Plan assets; ● Mortality - The Company utilizes the Society of Actuaries’ mortality table (Pri-2012) (Mortality Improvement Scale MP-2021); and ● Healthcare Cost Trend Rate - based on management projected future healthcare costs.
The primary assumptions used for determining future retirement benefit plans’ obligations and costs, which are reviewed and revised as needed each year, are as follows: ● Discount Rate - calculated based on market rates for long-term, high-quality corporate bonds specific to the expected duration of our Pension Plan and Other Benefits Plan’s liabilities; ● Compensation Increase - based on management projected future employee compensation increases; ● Long-Term Rate of Return - determined based on expected returns from our asset allocation for our Pension Plan and Other Benefits Plan assets; ● Mortality - The Company utilizes the Society of Actuaries’ mortality table (Pri-2012) (Fully Generational, IRS Adjusted, Mortality Improvement Scale MP-2021); and ● Healthcare Cost Trend Rate - based on management projected future healthcare costs.
Our other New Jersey subsidiaries, Pinelands Water Company (Pinelands Water) and Pinelands Wastewater Company (Pinelands Wastewater) (collectively, Pinelands), provide water and wastewater services to approximately 2,500 customers in Southampton Township, New Jersey. Our Delaware subsidiaries, Tidewater and Southern Shores Water Company, LLC (Southern Shores), provide water services to approximately 59,000 retail customers in New Castle, Kent and Sussex Counties, Delaware.
Our other New Jersey subsidiaries, Pinelands Water Company (Pinelands Water) and Pinelands Wastewater Company (Pinelands Wastewater) (collectively, Pinelands), provide water and wastewater services to approximately 2,500 customers in Southampton Township, New Jersey. Our Delaware subsidiaries, Tidewater and Southern Shores Water Company, LLC (Southern Shores), provide water services to approximately 61,000 retail customers in New Castle, Kent and Sussex Counties, Delaware.
The effect on the timing and amount of these payments resulting from potential changes in actuarial assumptions and returns on plan assets cannot be estimated. In 2023, the Company contributed $1.3 million to its retirement benefit plans and expects to contribute approximately $1.8 million in 2024.
The effect on the timing and amount of these payments resulting from potential changes in actuarial assumptions and returns on plan assets cannot be estimated. In 2024, the Company contributed $3.7 million to its retirement benefit plans and expects to contribute approximately $1.8 million in 2025.
Our principal New Jersey water utility system (the Middlesex System) provides water services to approximately 61,000 retail customers, primarily in central New Jersey. The Middlesex System also provides water sales under contract to municipalities in central New Jersey with a total population of over 0.2 million. Our Fortescue System provides water services in Downe Township, New Jersey.
Our principal New Jersey water utility system (the Middlesex System) provides water services to approximately 61,000 retail customers, primarily in central New Jersey. The Middlesex System also provides water sales under contract to municipalities in central New Jersey with a total population of over 0.2 million.
Some result in direct obligations on the Company’s balance sheet while others are commitments, some firm and some based on uncertainties, which are disclosed in the Company’s consolidated financial statements. 37 The table below presents our known contractual obligations for the periods specified as of December 31, 2023.
Some result in direct obligations on the Company’s balance sheet while others are commitments, some firm and some based on uncertainties, which are disclosed in the Company’s consolidated financial statements. 33 The table below presents our known contractual obligations for the periods specified as of December 31, 2024.
Capital Expenditures and Commitments To fund our capital program, we use internally generated funds, short-term and long-term debt borrowings, proceeds from sales of common stock under the Investment Plan and, when market conditions are favorable, proceeds from sales to the public of our common stock. 34 The table below summarizes our estimated capital expenditures for the years 2024-2026.
Capital Expenditures and Commitments To fund our capital program, we use internally generated funds, short-term and long-term debt borrowings, proceeds from sales of common stock under the Investment Plan and, when market conditions are favorable, proceeds from sales to the public of our common stock. The table below summarizes our estimated capital expenditures for the years 2025-2027.
In April 2023, Middlesex received approval from the NJBPU to borrow up to $300.0 million from the New Jersey SRF Program, the New Jersey Economic Development Authority, private placement and other financial institutions as needed through December 31, 2025.
Middlesex has received approval from the NJBPU to borrow up to $300.0 million from the New Jersey SRF Program, the New Jersey Economic Development Authority, private placement and other financial institutions as needed through December 31, 2025.
Operating Results by Segment The Company has two operating segments, Regulated and Non-Regulated. Our Regulated segment contributed approximately 93%, 93% and 91% of total revenues for the years ended December 31, 2023, 2022 and 2021, respectively, and approximately 92%, 93% and 93% of net income for the years ended December 31, 2023, 2022 and 2021, respectively .
Operating Results by Segment The Company has two operating segments, Regulated and Non-Regulated. Our Regulated segment contributed approximately 93% of total revenues for the years ended December 31, 2024, 2023 and 2022, respectively, and approximately 94%, 92% and 93% of net income for the years ended December 31, 2024, 2023 and 2022, respectively.
Interest Charges Interest charges for the year ended December 31, 2022 increased $1.3 million from the same period in 2021 due to higher average debt outstanding and higher average interest rates in 2022 as compared to 2021 .
Interest Charges Interest charges for the year ended December 31, 2023 increased $3.8 million from the same period in 2022 due to higher average debt outstanding and higher average interest rates in 2023 as compared to 2022.
The weighted average daily amounts of borrowings outstanding under the credit lines and the weighted average interest rates on those amounts were $35.7 million and $28.9 million at 6.13% and 3.34 % for the years ended December 31, 2023 and 2022, respectively. 35 Long-term Debt - Subject to regulatory approval, the Company periodically issues long-term debt to fund investments in utility plant.
The weighted average daily amounts of borrowings outstanding under the credit lines and the weighted average interest rates on those amounts were $38.7 million and $35.7 million at 6.33% and 6.13% for the years ended December 31, 2024 and 2023, respectively. Long-term Debt - Subject to regulatory approval, the Company periodically issues long-term debt to fund investments in utility plant.
To the extent possible and fiscally prudent, the Company finances qualifying capital projects under SRF loan programs in New Jersey and Delaware. These government programs provide financing at interest rates typically below rates available in the broader financial markets. A portion of the borrowings under the New Jersey SRF is interest-free.
To the extent possible and fiscally prudent, the Company finances qualifying capital projects under SRF loan programs in New Jersey and Delaware. These government programs provide financing at interest rates typically below rates available in the broader financial markets.
As of December 31, 2023, $42.8 million was outstanding under these lines of credit (see discussion under “ Sources of Liquidity-Short-term Debt ” below); ● Proceeds from the Delaware State Revolving Fund (SRF) Program.
As of December 31, 2024, $23.0 million was outstanding under these lines of credit (see discussion under “ Sources of Liquidity-Short-term Debt ” below); ● Proceeds from the Delaware State Revolving Fund (SRF) Program.
(Tidewater), since 1992. We are in the business of collecting, treating and distributing water for domestic, commercial, municipal, industrial and fire protection purposes. We operate water and wastewater systems under contract for governmental entities and private entities primarily in New Jersey and Delaware and also provide regulated wastewater services in New Jersey.
(Tidewater), since 1992. We are in the business of providing an essential water utility service for domestic, commercial, municipal, industrial and fire protection purposes. We operate water and wastewater systems under contract for governmental entities and private entities primarily in New Jersey and Delaware and also provide regulated wastewater services in New Jersey.
The Company is in compliance with all of its mortgage covenants Common Stock - The Company issues shares of its common stock in connection with the Investment Plan, a direct share purchase and dividend reinvestment plan for the Company’s common stock. The Company raised approximately $12.1 million through the issuance of shares under the Investment Plan during 2023.
Common Stock - The Company issues shares of its common stock in connection with the Investment Plan, a direct share purchase and dividend reinvestment plan for the Company’s common stock. The Company raised approximately $1.0 million through the issuance of shares under the Investment Plan during 2024.
SRF programs provide low cost financing for projects meeting certain water quality and system improvement benchmarks (see discussion under “ Sources of Liquidity-Long-term Debt ” below); ● Proceeds from other long-term borrowings (see discussion under “ Sources of Liquidity-Long-term Debt ” below); and ● Proceeds from common stock sales through the Middlesex Water Company Investment Plan (the Investment Plan) (see discussion under “ Sources of Liquidity-Common Stock ” below).
SRF programs provide lower cost financing for projects meeting certain water quality and system improvement benchmarks (see discussion under “ Sources of Liquidity-Long-term Debt ” below); ● Proceeds from other long-term borrowings (see discussion under “ Sources of Liquidity-Long-term Debt ” below); and ● Proceeds from common stock sales through the Investment Plan and proceeds from sales to the public of our common stock when market conditions are favorable (see discussion under “ Sources of Liquidity-Common Stock ” below).
The agreement expires on December 31, 2029. 29 Outlook Our ability to increase operating income and net income is based significantly on four factors: weather, adequate and timely rate relief, effective cost management and customer growth (which are evident in comparison discussions in the Results of Operations section below).
Outlook Our ability to increase operating income and net income is based significantly on four factors: weather, adequate and timely rate relief, effective cost management and customer growth (which are evident in comparison discussions in the Results of Operations section below). Weather patterns which can result in lower customer demand for water may occur in 2025.
Other Income, net Other Income, net for the year ended December 31, 2023 decreased $1.2 million from the same period in 2022 primarily due to lower actuarially-determined retirement benefit plans non-service benefit. 31 Interest Charges Interest charges for the year ended December 31, 2023 increased $3.8 million from the same period in 2022 due to higher average debt outstanding and higher average interest rates in 2023 as compared to 2022.
Other Income, net Other Income, net for the year ended December 31, 2023 decreased $1.2 million from the same period in 2022 primarily due to lower actuarially-determined retirement benefit plans non-service benefit.
In April 2023, Tidewater closed on three DEPSC-approved Delaware SRF loans totaling $10.2 million, all at interest rates of 2.0% with maturity dates in 2043 and 2044. These loans are for the construction, relocation, improvement, and/or interconnection of transmission mains.
In May 2024, Tidewater closed on four DEPSC-approved Delaware SRF loans totaling $5.6 million, all at interest rates of 2.0% with expected maturity dates in 2044. These loans are for the construction, relocation, improvement, and/or interconnection of transmission mains and construction of a water treatment facility.
Proceeds from the loan were used to pay off its outstanding balances under its bank lines of credit. In July 2023, Pinelands Water and Pinelands Wastewater closed on $3.9 million and $3.6 million CoBank amortizing mortgage type loans, respectively, with an interest rate of 6.17% and a final maturity date of 2043 for each loan.
In July 2023, Pinelands Water and Pinelands Wastewater closed on $3.9 million and $3.6 million CoBank, ACB (CoBank) amortizing mortgage type loans, respectively, with an interest rate of 6.17% and a final maturity date of 2043 for each loan.
These lawsuits remain in the legal process and their ultimate resolution is not known at this time. 27 Capital Construction Program The Company’s multi-year capital construction program encompasses numerous projects designed to upgrade and replace utility infrastructure as well as enhance the integrity and reliability of assets to better serve the current and future generations of water and wastewater customers.
Capital Construction Program The Company’s multi-year capital construction program encompasses numerous projects designed to upgrade and replace utility infrastructure as well as enhance the integrity and reliability of assets to better serve the current and future generations of water and wastewater customers.
The increase in cash flows provided by financing activities is due to an increase in net borrowings and higher proceeds from the issuance of common stock under the Investment Plan partially offset by increased common stock dividend payments. For further discussion on the Company’s short-term and long-term debt, see “ Sources of Liquidity ” below.
The decrease in cash flows provided by financing activities is due to lower proceeds from the issuance of common stock under the Middlesex Water Company Investment Plan (Investment Plan) and long-term debt offset by proceeds received from a litigation settlement. For further discussion on the Company’s short-term and long-term debt, see “ Sources of Liquidity ” below.
The discount rate, compensation increase rate and long-term rate of return used to determine future obligations of our retirement benefit plans as of December 31, 2023 are as follows: Pension Plan Other Benefits Plan Discount Rate 4.79% 4.79% Compensation Increase 3.00% 3.00% Long-term Rate of Return 7.00% 7.00% For the 2023 valuation, costs and obligations for our Other Benefits Plan assumed an 7.5% annual rate of increase in the per capita cost of covered healthcare benefits in 2024 with the annual rate of increase declining 0.5% per year for 2025-2030, resulting in an annual rate of increase in the per capita cost of covered healthcare benefits of 4.5% by year 2030. 39 The following is a sensitivity analysis for certain actuarial assumptions used in determining projected benefit obligations (PBO) and expenses for our retirement benefit plans: Pension Plan Actuarial Assumptions Estimated Increase/ (Decrease) on PBO (000s) Estimated Increase/ (Decrease) on Expense (000s) Discount Rate 1% Increase $ (9,903 ) $ (604 ) Discount Rate 1% Decrease 12,086 992 Other Benefits Plan Actuarial Assumptions Estimated Increase/ (Decrease) on PBO (000s) Estimated Increase/ (Decrease) on Expense (000s) Discount Rate 1% Increase $ (3,440 ) $ (552 ) Discount Rate 1% Decrease 4,286 180 Healthcare Cost Trend Rate 1% Increase 3,264 499 Healthcare Cost Trend Rate 1% Decrease (2,676 ) (696 ) Recent Accounting Standards See Note 1(r) of the Notes to Consolidated Financial Statements for a discussion of recent accounting pronouncements. 40
The discount rate, compensation increase rate and long-term rate of return used to determine future obligations of our retirement benefit plans as of December 31, 2024 are as follows: Pension Plan Other Benefits Plan Discount Rate 5.47% 5.49% Compensation Increase 3.00% 3.00% Long-term Rate of Return 7.00% 7.00% For the 2024 valuation, costs and obligations for our Other Benefits Plan assumed an 8.0% annual rate of increase in the per capita cost of covered healthcare benefits in 2025 with the annual rate of increase declining 0.15% per year for 2026-2045, resulting in an annual rate of increase in the per capita cost of covered healthcare benefits of 5.0% by year 2045. 35 The following is a sensitivity analysis for certain actuarial assumptions used in determining projected benefit obligations (PBO) and expenses for our retirement benefit plans: Pension Plan Actuarial Assumptions Estimated Increase/ (Decrease) on PBO (000s) Estimated Increase/ (Decrease) on Expense (000s) Discount Rate 1% Increase $ (8,940 ) $ (38 ) Discount Rate 1% Decrease 10,814 1,338 Other Benefits Plan Actuarial Assumptions Estimated Increase/ (Decrease) on PBO (000s) Estimated Increase/ (Decrease) on Expense (000s) Discount Rate 1% Increase $ (3,299 ) $ (454 ) Discount Rate 1% Decrease 4,075 551 Healthcare Cost Trend Rate 1% Increase 3,434 673 Healthcare Cost Trend Rate 1% Decrease (2,824 ) (549 ) Recent Accounting Standards See Note 1(q) of the Notes to Consolidated Financial Statements for a discussion of recent accounting pronouncements. 36
In May 2023, Tidewater closed on a $20.0 million loan from CoBank, ACB (CoBank) with an interest rate of 5.71% and a 2033 maturity date and fully drew all funds by June 30, 2023. Proceeds from the loan were used to pay off Tidewater’s outstanding balances under its bank lines of credit and for other general corporate purposes.
Proceeds were used to pay off outstanding intercompany loans with Middlesex and for ongoing capital projects. 32 In May 2023, Tidewater closed on a $20.0 million loan from CoBank with an interest rate of 5.71% and a 2033 maturity date and fully drew all funds by June 30, 2023.
Payment Due by Period (Millions of Dollars) Total Less than 1 Year 2-3 Years 4-5 Years More than 5 Years Long-term Debt $ 365 $ 8 $ 15 $ 14 $ 328 Note Payable 43 43 — — — Interest on Long-Term Debt 260 12 24 23 201 Purchased Water Contracts 97 7 11 7 72 Commercial Office Leases 6 1 2 2 1 TOTAL $ 771 $ 71 $ 52 $ 46 $ 602 The table above does not reflect any anticipated cash payments for retirement benefit plan obligations.
Payment Due by Period (Millions of Dollars) Total Less than 1 Year 2-3 Years 4-5 Years More than 5 Years Long-term Debt $ 359 $ 8 $ 15 $ 14 $ 322 Note Payable 23 23 — — — Interest on Long-Term Debt 247 12 23 22 190 Purchased Water Contracts 90 7 8 7 68 Commercial Office Leases 5 1 2 2 — TOTAL $ 724 $ 51 $ 48 $ 45 $ 580 The table above does not reflect any anticipated cash payments for retirement benefit plan obligations.
(Millions) 2024 2025 2026 2024-2026 Distribution/Network System $ 43 $ 55 $ 50 $ 148 Production System 23 18 11 52 Information Technology (IT) Systems 3 2 3 8 Other 6 6 6 18 Total Estimated Capital Expenditures $ 75 $ 81 $ 70 $ 226 Our estimated capital expenditures for the items listed above are primarily comprised of the following: ● Distribution/Network System - Includes projects associated with replacement, installation and relocation of water mains and service lines and wastewater collection systems, construction of water storage tanks, installation and replacement of hydrants, meters and meter pits and the RENEW Program.
(In Millions) 2025 2026 2027 2025-2027 Distribution/Network System $ 56 $ 70 $ 62 $ 188 Production System 27 53 89 169 Information Technology (IT) Systems 3 5 2 10 Other 7 5 8 20 Total Estimated Capital Expenditures $ 93 $ 133 $ 161 $ 387 Our estimated capital expenditures for the items listed above are primarily comprised of the following: ● Distribution/Network System - Includes projects associated with replacement, installation and relocation of water mains and service lines and wastewater collection systems, construction of water storage tanks, installation and replacement of hydrants, meters and meter pits and the RENEW Program.
In connection with RENEW, we expect to spend approximately $11 million in each of 2024 and 2025, and $12 million in 2026. ● Production System - Includes projects associated with our treatment plants, including approximately $2.0 million of expenditures for PFAS treatment upgrades and $6.8 million for replacement of existing motor control center and electrical distribution equipment in our Middlesex system, and $3.6 million of various treatment projects in our Tidewater system in 2024. ● Information Technology (IT) Systems - Includes further upgrade of our enterprise resource planning system and hardware and software purchases for other IT systems. ● Other - Includes purchase of transportation equipment, tools, furniture, laboratory equipment, security systems and other general infrastructure needs including improvements to field and inventory management facilities in Iselin, New Jersey.
In addition, we expect to invest $2 million and $10 million in 2025 and 2026, respectively, for elevated storage tanks in our Tidewater System. ● Production System - Includes projects associated with our treatment plants, including approximately $3 million, $25 million and $77 million of expenditures in 2025, 2026 and 2027, respectively to install PFAS treatment at our CJO Plant. ● Information Technology (IT) Systems - Includes further upgrade of our enterprise resource planning system and hardware and software purchases for other IT systems, including approximately $2 million in both 2026 and 2027 for upgrades of our customer information system. ● Other - Includes purchase of transportation equipment, tools, furniture, laboratory equipment, security systems and other general infrastructure needs including improvements to field and inventory management facilities in Iselin, New Jersey.
Weather patterns which can result in lower customer demand for water may occur in 2024. As operating costs are anticipated to increase in 2024 in a variety of categories, we continue to implement plans to further streamline operations and further reduce, and mitigate increases in, operating costs.
As operating costs are anticipated to increase in 2025 in a variety of categories, we continue to implement plans to further streamline operations and further reduce and mitigate increases in operating costs.
Depreciation Depreciation expense for the year ended December 31, 2023 increased $2.2 million from the same period in 2022 due to a higher level of utility plant in service.
Partially offsetting these increases was lower weather-related main break activity in our Middlesex System during the winter months. Depreciation Depreciation expense for the year ended December 31, 2023 increased $2.2 million from the same period in 2022 due to a higher level of utility plant in service.
Proceeds were used to reduce the Company’s outstanding balances under its bank lines of credit. In May 2022, Middlesex repaid its two outstanding NJIB construction loans by issuing FMBs to the NJIB under two loan agreements. The total amount of FMBs issued is $52.2 million and designated as Series 2022A ($16.2 million) and Series 2022B ($36.0 million).
Proceeds were used to reduce the Company’s outstanding balances under its bank lines of credit. In May 2022, Middlesex repaid its two outstanding New Jersey Infrastructure Bank (NJIB) construction loans by issuing FMBs to the NJIB under two loan agreements.
Sources of Liquidity Short-term Debt - In January 2022, the Company increased available lines of credit from $110 million to $140 million. The outstanding borrowings under the credit lines at December 31, 2023 were $42.8 million, at a weighted average interest rate of 6.50%.
Sources of Liquidity Short-term Debt - The Company has available lines of credit of $140 million. The outstanding borrowings under the credit lines at December 31, 2024 were $23.0 million, at a weighted average interest rate of 5.63%.
The Company had previously initiated a lawsuit against 3M Company (3M), in connection with the Company’s claim that 3M introduced perfluoroalkyl substances (commonly known as “PFAS”), which include PFOA, into the Company’s water supply at its Park Avenue Plant. On August 29, 2023, Middlesex and 3M executed a settlement agreement (the Settlement Agreement) to resolve the lawsuit.
In August 2023, Middlesex and 3M Company (3M) executed a settlement agreement (Settlement Agreement) to resolve a lawsuit Middlesex previously initiated claiming 3M introduced Perfluoroalkyl Substances (PFAS) into the Company’s water supply for its Park Avenue Wellfield Treatment Plant (Park Avenue Plant).
To pay for our capital program in 2024, we estimate we will utilize some or all of the following: ● Internally generated funds; ● Short-term borrowings, as needed, through $140 million of available lines of credit with several financial institutions.
The actual amount and timing of capital expenditures is dependent on the need for replacement of existing infrastructure, customer growth, residential new home construction and sales, project scheduling and continued refinement of project scope and costs. 31 To fund our capital program in 2025, we estimate we will utilize some or all of the following: ● Internally generated funds; ● Short-term borrowings, as needed, through $140 million of available lines of credit with several financial institutions.
Depreciation Depreciation expense for the year ended December 31, 2022 increased $1.9 million from the same period in 2021 due to a higher level of utility plant in service.
Depreciation Depreciation expense for the year ended December 31, 2024 decreased $0.8 million from the same period in 2023 due to recovery of prior year depreciation related to upgrades at the Park Avenue Plant partially offset by a higher level of utility plant in service.
The Company plans to invest approximately $75 million in 2024 in connection with this plan for projects that include, but are not limited to: ● Replacement of approximately 17,200 linear feet of cast iron 6" water main in the Port Reading and Carteret sections of Woodbridge, New Jersey; ● Replacement of control room and electrical distribution equipment at our The Carl J.
The Company plans to invest approximately $93 million in 2025 in connection with this plan for projects that include, but are not limited to: ● Replacement of 19,550 linear feet of cast iron main in Woodbridge Township in our Middlesex System; ● Construction of new elevated water tanks in Delaware; and ● Various water main replacements and improvements.
Strategy for Growth Our strategy for profitable growth is focused on the following key areas: ● Invest in projects, products and services that complement our core water and wastewater competencies; ● Timely and adequate recovery of infrastructure investments and other costs to maintain service quality; ● Prudent acquisitions of investor and municipally-owned water and wastewater utilities; and ● Operation of municipal and industrial water and wastewater systems on a contract basis which meet our risk profile.
Strategy for Growth Our strategy for selective and sustainable growth is focused on the following key areas: ● Invest in our utility infrastructure to build system resiliency and meet compliance requirements; ● Timely and adequate recovery of infrastructure investments and other costs to maintain and continually improve service quality; ● Selective acquisitions of investor and municipally-owned water and wastewater utilities; and ● Operation of municipal and industrial water and wastewater systems on a contract basis which meet our risk profile. 25 Rates Middlesex - The approval by the NJBPU in February 2024 of the negotiated settlement of the Middlesex 2023 base rate case is expected to increase annual operating revenues by $15.4 million, effective March 1, 2024.
Net proceeds from the 3M Settlement Agreement were used to recover costs for the construction of the Park Avenue Plant PFAS treatment upgrades, including depreciation and carrying costs. The rate case settlement will result in the reclassification of $48.3 million from Regulatory Liabilities to Contributions in Aid of Construction in the March 31, 2024 balance sheet.
The rate case settlement provided that the net proceeds from the 3M Settlement Agreement were to be used to mitigate the increase in customer rates and reimburse Middlesex for previously incurred costs for the construction of the Park Avenue Plant PFAS treatment upgrades, including depreciation and carrying costs.
The Company may issue debt securities in a series of one or more transaction offerings to help fund Middlesex’s multi-year capital construction program. In March 2023, Middlesex closed on a $40.0 million, 5.24% private placement of First Mortgage Bonds (FMBs) with a 2043 maturity date designated as Series 2023A.
The Company expects to issue debt securities in a series of one or more transaction offerings to help fund Middlesex’s multi -year capital construction program. In September 2024, Tidewater closed on a $2.2 million Delaware SRF loan with a 0.0% interest rate with an expected maturity date in 2044.
Proceeds were used to pay off outstanding intercompany loans with Middlesex and for ongoing capital projects. Substantially all of the utility plant of the Company is subject to the lien of its mortgage, which includes debt service and capital ratio covenants.
The final maturity date for both FMBs is August 1, 2056, with scheduled debt service payments over the life of these loans. Substantially all of the utility plant of the Company is subject to the lien of its mortgage, which includes debt service and capital ratio covenants. The Company is in compliance with all of its mortgage covenants.
On January 23, 2024, the Company named Nadine Leslie as its new President and Chief Executive Officer effective March 1, 2024. Ms. Leslie will also be appointed to the Board of Directors effective March 1, 2024. Mr.
Zerhouni its new Senior Vice President, 24 Treasurer and Chief Financial Officer effective June 24, 2024. Ms. Leslie was also appointed to the Board of Directors effective March 1, 2024. In December 2024, the Company named Gregory Sorensen its new Vice President and Chief Operating Officer.
For the year ended December 31, 2023, cash flows from operating activities decreased $8.6 million to $52.8 million. The decrease in cash flows from operating activities primarily resulted from lower net income and higher interest payments. Increases in certain operating costs impact our liquidity and capital resources.
For the year ended December 31, 2024, cash flows from operating activities increased $5.9 million to $58.7 million. The increase in cash flows from operating activities primarily resulted from the impact of higher weather-driven customer demand and Middlesex’s approved base rate increase effective March 1, 2024. Increases in certain operating costs impact our liquidity and capital resources.
RENEW is our ongoing initiative to replace water mains in the Middlesex System.
RENEW is our ongoing initiative to replace water mains in the Middlesex System. In connection with RENEW, we expect to spend approximately $11 million in each of 2025 and 2026, and $12 million in 2027.
The discussion of the Company’s results of operations is on a consolidated basis and includes significant factors by subsidiary. The segments in the tables included below are comprised of the following companies: Regulated- Middlesex, Tidewater, Pinelands and Southern Shores; Non-Regulated- USA, USA-PA, and White Marsh.
The discussion of the Company’s results of operations is on a consolidated basis and includes significant factors by subsidiary.
Other Income, net Other Income, net for the year ended December 31, 2022 increased $1.8 million from the same period in 2021 primarily due to higher actuarially-determined retirement benefit plans non-service benefit partially offset by lower AFUDC resulting from a reduced level of capital projects under construction.
Other Taxes Other taxes for the year ended December 31, 2024 increased $3.1 million from the same period in 2023 primarily due to higher gross receipts taxes on higher revenue in Middlesex and higher payroll related taxes on increased labor costs. 28 Other Income, net Other Income, net for the year ended December 31, 2024 increased $5.6 million from the same period in 2023 primarily due to the recovery of carrying costs on the PFAS treatment upgrades at the Park Avenue Plant and higher actuarially-determined retirement benefit plans non-service benefit offset by lower allowance for funds used during construction on capital projects in construction.
In September 2022, the NJBPU approved Middlesex's Emergency Relief Motion to reset its Purchased Water Adjustment Clause (PWAC) tariff rate to recover additional costs of $2.7 million for the purchase of treated water from a non-affiliated water utility. A PWAC is a rate mechanism that allows for recovery of increased purchased water costs between base rate case filings.
Middlesex expects to file for an additional DSIC rate increase in April 2025. In February 2025, the NJBPU approved Middlesex’s petition to reset its Purchased Water Adjustment Clause (PWAC) tariff rate to recover additional annual costs of $0.5 million, primarily for the purchase of treated water from a non-affiliated water utility regulated by the NJBPU.
The Company has projected to spend approximately $226 million for the 2024-2026 capital investment program, including approximately $15 million for replacement of a thirty inch main in our Middlesex System, $9 million for LSLR compliance in the Middlesex System, $34 million on the RENEW Program, which is our ongoing initiative to replace water mains in the Middlesex System, $6 million for evaluation of PFAS treatment at our CJO Plant and $7 million for control room and electrical distribution equipment at our CJO Plant.
Olson Surface Water Treatment Plant (CJO Plant) to integrate PFAS removal from source water, $34 million on the RENEW Program, which is our ongoing initiative to replace water mains in the Middlesex System, $15 million for replacement of a transmission main in Metuchen in our Middlesex System and $12 million for elevated storage tanks in our Tidewater System.
The interest rate on the Series 2022A bond is zero and the interest rate on the Series 2022B bond ranges between 2.7% and 3.0%. The final maturity date for both FMBs is August 1, 2056, with scheduled debt service payments over the life of these loans.
The total amount of FMBs issued is $52.2 million and designated as Series 2022A ($16.2 million) and Series 2022B ($36.0 million). The interest rate on the Series 2022A bond is zero and the interest rate on the Series 2022B bond ranges between 2.7% and 3.0%.
Partially offsetting these increases were greater income tax benefits associated with increased repair expenditures on tangible property in the Middlesex system. 33 Net Income and Earnings Per Share Net income for the year ended December 31, 2022 increased $5.9 million as compared with the same period in 2021.
Income Taxes Income taxes for the year ended December 31, 2024 increased by $5.9 million from the same period in 2023, primarily due to higher pre-tax income and lower income tax benefits associated with decreased repair expenditures on tangible property in the Middlesex System offset by the recovery of income taxes on the taxable portion of the proceeds from the 3M Settlement Agreement .
Tidewater has drawn a total of $6.1 million through December 31, 2023 and expects that the requisitions will continue through mid-2025. 36 In December 2021, Tidewater closed on a DEPSC-approved $5.0 million Delaware SRF loan at an interest rate of 2.0%. The loan was for construction of a one million gallon elevated storage tank.
These loans are for the construction of a one-million gallon elevated storage tank and construction, relocation, improvement, and interconnection of transmission mains. Tidewater has drawn a total of $4.9 million through December 31, 2024 and expects that the requisitions will continue through the second quarter of 2025.
Under the agreement, current rates were to remain in effect until December 31, 2024, unless there are unanticipated capital expenditures or regulatory related changes in operating expenses exceeding certain thresholds during this time period. In 2022, capital expenditures did exceed the established threshold and rates were increased by 5.39% effective January 1, 2023.
Southern Shores - Southern Shores provides water service to a 2,200 unit condominium community in Sussex County, Delaware under a DEPSC-approved agreement expiring December 31, 2029. Under the agreement, rates are increased when there are unanticipated capital expenditures or regulatory related changes in operating expenses exceed certain thresholds. In 2024, capital expenditures did exceed the established threshold.
Replacement of Middlesex and Middlesex customer-owned lead service lines is required by the New Jersey LSLR Law. Under this legislation, the costs associated with replacing customer-owned lead service lines are recoverable through future customer surcharges. Cost recovery for replacing Company-owned lead service lines are recoverable through traditional base rate case filings.
Cost recovery for replacing Company-owned lead service lines are recoverable through traditional rate making in connection with general rate case filings.
Cash Flows from Investing Activities For the year ended December 31, 2023, cash flows used in investing activities increased $2.0 million to $90.2 million, which was attributable to cash received from the sale of Middlesex’s regulated wastewater subsidiary in January 2022 partially offset by lower utility plant expenditures.
Cash Flows from Investing Activities For the year ended December 31, 2024, cash flows used in investing activities decreased $15.6 million to $74.6 million due to decreased utility plant expenditures in 2024.
The Company will also record in the first quarter of 2024 the recovery of $0.7 million and $2.4 million of prior year depreciation and carrying costs, respectively, as well as the recovery of $1.4 million of prior year costs which were associated with the interim solution to comply with the Notice, all of which were approved in the rate case settlement.
In 2024, the Company also recognized the recovery of $0.9 million for depreciation and $4.1 million for carrying costs associated with the Park Avenue Plant PFAS treatment upgrades, as well as the recovery of $2.6 million of previously incurred operating treatment costs while the Park Avenue Plant PFAS treatment upgrades were in process.
Removed
USA also provides unregulated water and wastewater services under contract with several New Jersey municipalities. Middlesex President and Chief Executive Officer Retirement Announcement and Replacement In May 2023, President and Chief Executive Officer, Dennis W. Doll announced a plan to retire upon turning age 65.
Added
Management Update Upon the retirements of President and Chief Executive Officer Dennis W. Doll, and Senior Vice President, Treasurer and Chief Financial Officer A. Bruce O’Connor, the Company named Nadine Leslie its new President and Chief Executive Officer effective March 1, 2024 and Mohammed G.
Removed
Doll 26 will remain Chairman of the Company’s Board of Directors through the expiration of his current term as a Director as of the May 21, 2024 Annual Meeting of Shareholders.
Added
His responsibilities include water and wastewater operations, capital program planning and delivery, safety and security, sustainability, and growth initiatives.
Removed
Regulatory Notice of Non-Compliance In September 2021, the New Jersey Department of Environmental Protection (NJDEP) issued a Notice of Non-Compliance (Notice) to Middlesex based on self-reporting by Middlesex that the level of Perfluorooctanoic Acid (PFOA) in water treated at its Park Avenue Wellfield Treatment Plant (Park Avenue Plant) in South Plainfield, New Jersey exceeded a standard promulgated in a NJDEP regulation that became effective in 2021.
Added
Tidewater Acquisition of the Water Utility Assets of the Town of Ocean View, Delaware In February 2025, Tidewater and the Town of Ocean View, Delaware’s (Ocean View) joint application for Tidewater’s purchase of all of the rights, title, and interest in the water utility assets of Ocean View for $4.6 million was approved by the Delaware Public Service Commission (DEPSC).
Removed
Middlesex was required by the regulation to notify its affected customers and complied within the required Notice period in November 2021. The Notice further required the Company to take any action necessary to comply with the new standard by September 7, 2022.
Added
Ocean View serves approximately 900 customers in Sussex County, Delaware. Tidewater currently provides water service to most residents of Ocean View other that the 900 customers currently served by Ocean View. Closing on this purchase is expected by April 2025.
Removed
Consequently, in November 2021, the Company implemented an interim solution to meet the Notice requirements, which included putting the Park Avenue Wellfield Treatment Plant in off-line status and obtaining alternate sources of supply.
Added
United States Environmental Protection Agency (USEPA) Issues Final Perfluoroalkyl (PFAS) Regulations In April 2024, the USEPA finalized drinking water regulations for PFAS, establishing maximum contaminant levels (MCLs) for three PFAS compounds (Regulated PFAS) that are lower than the current New Jersey Department of Environmental Protection MCLs adhered to by the Company.
Removed
In June 2022, the Company accelerated the in-service date for a portion of the enhanced treatment project based on engineering analysis that allowed a restart of the Park Avenue Wellfield Treatment Plant to ensure continued compliance with all state and federal drinking water standards.
Added
Under the new USEPA regulations effective April 2024, water systems must monitor for Regulated PFAS and have three years to complete initial monitoring (by April 2027), followed by ongoing compliance monitoring. Water systems must also provide the public with information on the levels of Regulated PFAS in their drinking water beginning in 2027.
Removed
In September 2022, the Company entered into an Administrative Consent Order (ACO) with the NJDEP, which required the Company to take whatever actions necessary to achieve and maintain compliance with applicable regulations. As prescribed in the ACO, the Company was to issue periodic public notifications until the ACO was closed.
Added
Water systems have five years (by April 2029) to implement solutions that reduce Regulated PFAS if monitoring shows that drinking water levels exceed these MCLs.
Removed
In June 2023, the Company completed the permanent construction of the entire Park Avenue Plant treatment upgrades and placed the upgrades into operation in full compliance with the NJDEP PFOA standards. In October 2023, the Company received confirmation from the NJDEP that it has complied with all requirements of the ACO and consequently, the ACO has been closed.
Added
Beginning in April 2029, water systems that have Regulated PFAS in drinking water which exceeds one or more of these MCLs must take action to reduce levels of these PFAS compounds in their drinking water and must provide notification to the public of the violation.
Removed
The Settlement Agreement provides that: ● 3M will pay $93.2 million in two installments, one payment of $23.3 million received in December 2023 and one payment of $69.9 million in July 2024.
Added
In anticipation of these new USEPA standards, in 2023, the Company began implementing its strategy to meet these lower MCLs for Regulated PFAS and is currently performing preliminary engineering studies to ensure that effective PFAS treatment approaches are implemented.
Removed
Middlesex is obligated to pay 30% of the proceeds received plus reimbursable out-of-pocket legal expenses to its lawyers as legal fees, or $29.5 million in total; ● Proceeds received from the Settlement Agreement are being used to mitigate the impact of the increase in Middlesex’s customer rates approved by the NJBPU and to be implemented March 1, 2024 (for further discussion of Middlesex’s base rate increase, see Rates, Middlesex below); ● Middlesex, by nature of its status as a U.S. water purveyor impacted by PFAS, was automatically included in a Multi-District Litigation Settlement before the United States District Court for the District of South Carolina in which 3M and other companies (Non-3M Companies) are participants.
Added
This resulted in the reclassification of $48.3 million from Regulatory Liabilities to Contributions in Aid of Construction from the December 31, 2023 balance sheet.
Removed
Middlesex agreed as part of the Settlement Agreement to remain a member of the plaintiff class in order to be eligible to obtain future additional compensation from 3M and the Non-3M Companies for any future remediation which may be required of its water treatment facilities; and ● Middlesex and 3M agreed to enter into a joint mediation, which occurred in November 2023, to resolve two PFOA-related class action lawsuits against Middlesex seeking restitution for medical, water replacement and other claimed related costs.
Added
The Middlesex Lead Service Line Replacement (LSLR) Plan, which was approved by the NJBPU in January 2024, has commenced and Middlesex is currently recovering $1.2 million of costs for replacing customer-owned lead service lines incurred through June 2024, which are being recovered between September 2024 and February 2025.
Removed
Both Middlesex and 3M are defendants in these lawsuits.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur risks associated with commodity price increases for chemicals, electricity and other commodities are reduced through contractual arrangements and the ability to recover price increases through rates. Non-performance by these commodity suppliers could have a material adverse impact on our results of operations, financial position and cash flows.
Biggest changeFixed rate long-term debt and variable rate short-term debt agreements were not entered into for trading purposes. Our risks associated with commodity price increases for chemicals, electricity and other commodities are reduced through contractual arrangements and the ability to recover price increases through rates.
The Company’s interest rate risk related to existing fixed rate, long-term debt is not material due to the term of the majority of our First Mortgage Bonds, which have final maturity dates ranging from 2024 to 2059. Over the next twelve months, approximately $7.8 million of the current portion of existing long-term debt instruments will mature.
The Company’s interest rate risk related to existing fixed rate, long-term debt is not material due to the term of the majority of our First Mortgage Bonds, which have final maturity dates ranging from 2026 to 2059. Over the next twelve months, approximately $7.7 million of the current portion of existing long-term debt instruments will mature.
Changes to the Company's retirement benefit plan assets’ value can impact the Company's retirement benefit plan expense, funded status and future minimum funding requirements. Risk is mitigated through our ability to recover retirement benefit plan costs through customer rates. 41
Changes to the Company's retirement benefit plan assets’ value can impact the Company's retirement benefit plan expense, funded status and future minimum funding requirements. Our exposure to market price risk in our retirement benefit plan assets is managed through our ability to recover retirement benefit plan costs through customer rates.
We are exposed to credit risk for both our Regulated and Non-Regulated business segments. Our Regulated operations serve residential, commercial, industrial and municipal customers while our Non-Regulated operations engage in business activities with developers, government entities and other customers.
Non-performance by these commodity suppliers could have a material adverse impact on our results of operations, financial position and cash flows. We are exposed to credit risk for both our Regulated and Non-Regulated business segments. Our Regulated operations serve residential, commercial, industrial and municipal customers while our Non-Regulated operations engage in business activities with developers, government entities and other customers.
Added
There were no material changes to our primary market risk exposures or how such exposures are managed in 2024 nor are there expected to be in the future. 37

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