UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

~~(Mark One)~~
☒	☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

~~For the quarterly period ended~~ ~~September 30, 2022~~

OR

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

	~~For the transition period from ___________to ___________~~

For the transition period from _________________ to______________________

Commission File Number 0-422

MIDDLESEX WATER COMPANY

(Exact name of registrant as specified in its charter)

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

485C Route One South,, Iselin,, New Jersey08830

(Address of principal executive offices, including zip code)

(~~732~~)

(732) 634-1500

(~~Registrant’s~~Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)	Name of each exchange on which registered
Common Stock	MSEX	~~MSEX~~NASDAQ	~~NASDAQ~~

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit and post files).

Yes ☒ ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, non-accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ☒ ☑	Accelerated filer ☐	Non-accelerated filer ☐
	Smaller reporting company ☐		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐ No ☒☑

The number of shares outstanding of each of the registrant's classes of ~~Common Stock,~~common stock, as of ~~October~~July 28, ~~2022:~~2023: Common Stock, No Par Value: ~~17,638,595~~17,747,758 shares outstanding.

INDEX

	~~PAGE~~
PART I.		FINANCIAL INFORMATION	PAGE

Item 1.	Financial Statements (Unaudited):

	Condensed Consolidated Statements of Income	1

	Condensed Consolidated Balance Sheets	2

	Condensed Consolidated Statements of Cash Flows	3

	Condensed Consolidated Statements of Capital Stock and Long-Term Debt	4

	Condensed Consolidated Statements of Common Stockholders’ Equity	5

	Notes to Unaudited Condensed Consolidated Financial Statements	6

Index

MIDDLESEX WATER COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands except per share amounts)

Three Months Ended September 30,
Nine Months Ended September 30,
2022
2021
2022
2021

Operating Revenues
$
47,732
$
39,874
$
123,611
$
109,117

Operating Expenses:
Operations and Maintenance
20,312
18,950
59,007
55,265
Depreciation
5,814
5,504
17,107
15,523
Other Taxes
5,031
3,996
13,543
11,456
Total Operating Expenses
31,157
28,450
89,657
82,244
Gain on Sale of Subsidiary
-
-
5232
-
Operating Income
16,575
11,424
39,186
26,873

Other Income (Expense):
Allowance for Funds Used During Construction
627
344
1,553
2,376
Other Income (Expense), net
1,412
744
4,185
2,308

Total Other Income, net
2,039
1,088
5,738
4,684

Interest Charges
2,355
2,101
6,574
5,910

Income before Income Taxes
16,259
10,411
38,350
25,647

Income Taxes
1,968

(1,065
)
3,092

(3,658
)

Net Income
14,291
11,476
35,258
29,305

Preferred Stock Dividend Requirements
30
30
90
90

Earnings Applicable to Common Stock
$
14,261
$
11,446
$
35,168
$
29,215

Earnings per share of Common Stock:
Basic
$
0.81
$
0.65
$
2
$
1.67
Diluted
$
0.8
$
0.65
$
1.99
$
1.66

Average Number of Common Shares Outstanding:
Basic
17,628
17,491
17,583
17,485
Diluted
17,743
17,606
17,698
17,600

	Three Months Ended June 30,					Six Months Ended June 30,
	2023			2022		2023		2022

Operating Revenues	$	42,801		$	39,683	$	80,957	$	75,879

Operating Expenses:
Operations and Maintenance		21,204			19,557		41,462		38,695
Depreciation		6,184			5,670		12,170		11,292
Other Taxes		4,744			4,368		9,168		8,512

Total Operating Expenses		32,132			29,595		62,800		58,499

Gain on Sale of Subsidiary		—			—		—		5,232

Operating Income		10,669			10,088		18,157		22,612

Other Income:
Allowance for Funds Used During Construction		852			548		1,665		926
Other Income		1,290			1,396		2,188		2,773

Total Other Income		2,142			1,944		3,853		3,699

Interest Charges		3,251			2,369		5,846		4,219

Income before Income Taxes		9,560			9,663		16,164		22,092

Income Taxes Expense (Benefit)		(341	)		795		397		1,124

Net Income		9,901			8,868		15,767		20,968

Preferred Stock Dividend Requirements		30			30		60		60

Earnings Applicable to Common Stock	$	9,871		$	8,838	$	15,707	$	20,908

Earnings per share of Common Stock:
Basic	$	0.56		$	0.50	$	0.89	$	1.19
Diluted	$	0.55		$	0.50	$	0.88	$	1.18

Average Number of
Common Shares Outstanding :
Basic		17,713			17,583		17,683		17,560
Diluted		17,828			17,698		17,798		17,675

See Notes to Condensed Consolidated Financial Statements.

Index

MIDDLESEX WATER COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

September 30,
December 31,
ASSETS
2022
2021
UTILITY PLANT:
Water Production
$
246,426

$
247,286
Transmission and Distribution

709,748

697,200
General

96,433

95,658
Construction Work in Progress

59,152

24,947
TOTAL

1,111,759

1,065,091
Less Accumulated Depreciation

211,902

199,723
UTILITY PLANT - NET

899,857

865,368

CURRENT ASSETS:
Cash and Cash Equivalents

2,908

3,533
Accounts Receivable, net of allowance for uncollectible accounts of $2,593 and $2,574, respectively

18,081

15,311
Unbilled Revenues

11,022

7,273
Materials and Supplies (at average cost)

5,792

5,358
Prepayments

3,669

2,880
TOTAL CURRENT ASSETS

41,472

34,355

OTHER ASSETS:
Operating Lease Right of Use Asset

3,992

4,503
Preliminary Survey and Investigation Charges

3,244

3,540
Regulatory Assets

104,903

100,738
Non-utility Assets - Net

11,096

11,428
Other

105

83
TOTAL OTHER ASSETS

123,340

120,292
TOTAL ASSETS
$
1,064,669

$
1,020,015

CAPITALIZATION AND LIABILITIES

CAPITALIZATION:
Common Stock, No Par Value
$
232,423

$
221,919
Retained Earnings

165,652

145,807
TOTAL COMMON EQUITY

398,075

367,726
Preferred Stock

2,084

2,084
Long-term Debt

301,238

306,520
TOTAL CAPITALIZATION

701,397

676,330

CURRENT
Current Portion of Long-term Debt

7,567

6,731
LIABILITIES:
Notes Payable

40,500

13,000
Accounts Payable

25,873

21,125
Accrued Taxes

12,585

8,621
Accrued Interest

2,174

1,986
Unearned Revenues and Advanced Service Fees

1,477

1,330
Other

2,791

3,826
TOTAL CURRENT LIABILITIES

92,967

56,619

COMMITMENTS AND CONTINGENT LIABILITIES (Note 7)

OTHER LIABILITIES:
Customer Advances for Construction

22,425

23,529
Lease Obligations - Operating

3,871

4,367
Accumulated Deferred Income Taxes

76,979

69,500
Employee Benefit Plans

8,062

11,290
Regulatory Liabilities

46,693

49,431
Other

1,004

1,086
TOTAL OTHER LIABILITIES

159,034

159,203

CONTRIBUTIONS IN AID OF CONSTRUCTION

111,271
127,863
TOTAL CAPITALIZATION AND LIABILITIES
$
1,064,669

$
1,020,015

		June 30,		December 31,
ASSETS		2023		2022
UTILITY PLANT:	Water Production	$	287,871	$	249,153
	Transmission and Distribution		768,138		735,138
	General		99,587		97,581
	Construction Work in Progress		36,792		53,570
	TOTAL		1,192,388		1,135,442
	Less Accumulated Depreciation		225,281		214,891
	UTILITY PLANT - NET		967,107		920,551

CURRENT ASSETS:	Cash and Cash Equivalents		4,377		3,828
	Accounts Receivable, net of allowance for uncollectible accounts of $1,889 and $2,326, respectively		15,230		16,018
	Unbilled Revenues		11,067		8,659
	Materials and Supplies (at average cost)		6,426		6,177
	Prepayments		3,470		2,624
	TOTAL CURRENT ASSETS		40,570		37,306

OTHER ASSETS:	Operating Lease Right of Use Asset		3,499		3,826
	Preliminary Survey and Investigation Charges		2,270		2,806
	Regulatory Assets		92,772		90,046
	Non-utility Assets - Net		11,449		11,207
	Employee Benefit Plans		9,898		8,689
	Other		21		19
	TOTAL OTHER ASSETS		119,909		116,593
	TOTAL ASSETS	$	1,127,586	$	1,074,450

CAPITALIZATION AND LIABILITIES
CAPITALIZATION:	Common Stock, No Par Value	$	239,545		233,054
	Retained Earnings		171,932		167,274
	TOTAL COMMON EQUITY		411,477		400,328
	Preferred Stock		2,084		2,084
	Long-term Debt		350,446		290,280
	TOTAL CAPITALIZATION		764,007		692,692

CURRENT	Current Portion of Long-term Debt		17,460		17,462
LIABILITIES:	Notes Payable		23,500		55,500
	Accounts Payable		28,265		24,847
	Accrued Taxes		10,339		12,162
	Accrued Interest		3,098		2,535
	Unearned Revenues and Advanced Service Fees		1,476		1,365
	Other		3,425		3,988
	TOTAL CURRENT LIABILITIES		87,563		117,859

COMMITMENTS AND CONTINGENT LIABILITIES (Note 7)

OTHER LIABILITIES:	Customer Advances for Construction		21,032		21,382
	Lease Obligations		3,382		3,706
	Accumulated Deferred Income Taxes		85,196		77,783
	Regulatory Liabilities		47,400		46,734
	Other		758		919
	TOTAL OTHER LIABILITIES		157,768		150,524

CONTRIBUTIONS IN AID OF CONSTRUCTION			118,248		113,375
	TOTAL CAPITALIZATION AND LIABILITIES	$	1,127,586	$	1,074,450

See Notes to Condensed Consolidated Financial Statements.

Index

MIDDLESEX WATER COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

Nine Months Ended September 30,
2022
2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income
$
35,258
$
29,305
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation and Amortization
20,135
17,253
Provision for Deferred Income Taxes
(4,312
)
(11,801
)
Equity Portion of Allowance for Funds Used During Construction (AFUDC)
(914
)
(1,356
)
Cash Surrender Value of Life Insurance
474
(97
)
Stock Compensation Expense
1,270
1,033
Gain on Sale of Subsidiary
(5,232
)
-
Changes in Assets and Liabilities:
Accounts Receivable
(2,770
)
(2,459
)
Unbilled Revenues
(3,749
)
(2,009
)
Materials and Supplies
(434
)
(44
)
Prepayments
(789
)
(1,141
)
Accounts Payable
4,748
(13,103
)
Accrued Taxes
3,964
2,550
Accrued Interest
188
(943
)
Employee Benefit Plans
(1,973
)
1,187
Unearned Revenue & Advanced Service Fees
146
139
Other Assets and Liabilities
(1,769
)
124

NET CASH PROVIDED BY OPERATING ACTIVITIES
44,241
18,638
CASH FLOWS FROM INVESTING ACTIVITIES:
Utility Plant Expenditures, Including AFUDC of $639 in 2022 and $1,020 in 2021
(65,939
)
(61,245
)
Proceeds from Sale of Subsidiary
3,122
-

NET CASH USED IN INVESTING ACTIVITIES
(62,817
)
(61,245
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Redemption of Long-term Debt
(6,397
)
(28,655
)
Proceeds from Issuance of Long-term Debt
2,663
21,595
Net Short-term Bank Borrowings
27,500
48,000
Deferred Debt Issuance Expense
(612
)
(35
)
Common Stock Issuance Expense
(25
)
-
Proceeds from Issuance of Common Stock
10,064

885
Payment of Common Dividends
(15,298
)
(14,294
)
Payment of Preferred Dividends
(90
)
(90
)
Construction Advances and Contributions-Net
146

10,079

NET CASH PROVIDED BY FINANCING ACTIVITIES
17,951
37,485
NET CHANGES IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(625
)
(5,122
)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD
3,533

10,404
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD
$
2,908
$
5,282

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY:
Utility Plant received as Construction Advances and Contributions
$
5,705
$
4,279
Non-Cash Consideration for Sale of Subsidiary
2,100
-

SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash Paid During the Year for:
Interest
$
6,793
$
7,091
Interest Capitalized
$
639
$
1,020
Income Taxes
$
2,125
$
3,235

	Six Months Ended June 30,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	15,767		$	20,968
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation and Amortization		14,543			13,401
Provision for Deferred Income Taxes and Investment Tax Credits		(2,993	)		(3,256	)
Equity Portion of Allowance for Funds Used During Construction (AFUDC)		(1,014	)		(532	)
Cash Surrender Value of Life Insurance		(207	)		445
Stock Compensation Expense		1,366			909
Gain on Sale of Subsidiary		—			(5,232	)
Changes in Assets and Liabilities:
Accounts Receivable		788			682
Unbilled Revenues		(2,408	)		(3,016	)
Materials & Supplies		(249	)		(349	)
Prepayments		(846	)		(1,195	)
Accounts Payable		3,418			3,124
Accrued Taxes		843			3,893
Accrued Interest		563			170
Employee Benefit Plans		(975	)		(1,310	)
Unearned Revenue & Advanced Service Fees		111			165
Other Assets and Liabilities		580			(2,006	)

NET CASH PROVIDED BY OPERATING ACTIVITIES		29,287			26,861
CASH FLOWS FROM INVESTING ACTIVITIES:
Utility Plant Expenditures, Including AFUDC of $651 in 2023 and $394 in 2022		(50,635	)		(39,343	)
Proceeds from Sale of Subsidiary		—			3,122

NET CASH USED IN INVESTING ACTIVITIES		(50,635	)		(36,221	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Redemption of Long-term Debt		(2,553	)		(2,162	)
Proceeds from Issuance of Long-term Debt		62,880			2,287
Net Short-term Bank Borrowings		(32,000	)		14,500
Deferred Debt Issuance Expense		(107	)		(82	)
Proceeds from Issuance of Common Stock		5,745			7,039
Payment of Common Dividends		(11,049	)		(10,184	)
Payment of Preferred Dividends		(60	)		(60	)
Construction Advances and Contributions-Net		(959	)		(1,191	)

NET CASH PROVIDED BY FINANCING ACTIVITIES		21,897			10,147
NET CHANGES IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		549			787
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD		3,828			3,533
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	4,377		$	4,320


SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY:
Utility Plant received as Construction Advances and Contributions	$	4,219		$	4,321
Non-Cash Consideration for Sale of Subsidiary	$	—		$	2,100

SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash Paid During the Year for:
Interest	$	5,491		$	4,245
Interest Capitalized	$	651		$	394
Income Taxes	$	260		$	575

See Notes to Condensed Consolidated Financial Statements.

Index

Common
Common
Stock
Stock
Retained
Shares
Amount
Earnings
Total

For the Three Months Ended September 30, 2021
Balance at July 1, 2021
17,490
$
218,100
$
136,998
$
355,098
Net Income
-
-
11,476
11,476
Middlesex Water Company Invesment Plan
3
289
-
289
Restricted Stock Award - Net - Employees
-
273
-
273
Cash Dividends on Common Stock ($0.2725 per share)
-
-
(4,766
)
(4,766
)
Cash Dividends on Preferred Stock
-
-
(30
)
(30
)
Balance at September 30, 2021
17,493

$
218,662

$
143,678

$
362,340

For the Nine Months Ended September 30, 2021
Balance at January 1, 2021
17,473
$
217,451
$
128,757
$
346,208
Net Income
-
-
29,305
29,305
Middlesex Water Company Invesment Plan
11
885
-
885
Restricted Stock Award - Net - Employees
6
81

-
81
Restricted Stock Award - Board of Directors
3
245
-
245
Cash Dividends on Common Stock ($0.8175 per share)
-
-
(14,294
)
(14,294
)
Cash Dividends on Preferred Stock
-
-
(90
)
(90
)
Balance at September 30, 2021
17,493
$
218,662
$
143,678
$
362,340

For the Three Months Ended September 30, 2022
Balance at July 1, 2022
17,604
$
229,037
$
156,530
$
385,567
Net Income
-
-
14,291
14,291
Middlesex Water Company Invesment Plan
34
3,025
-
3,025
Restricted Stock Award - Net - Employees
-
361
-
361
Cash Dividends on Common Stock ($0.2900 per share)
-
-
(5,114
)
(5,114
)
Cash Dividends on Preferred Stock
-
-
(30
)
(30
)
Common Stock Expenses
-
-
(25
)
(25
)
Balance at September 30, 2022
17,638

$
232,423

$
165,652

$
398,075

For the Nine Months Ended September 30, 2022
Balance at January 1, 2022
17,522
$
221,919
$
145,807
$
367,726
Net Income
-
-
35,258
35,258
Middlesex Water Company Invesment Plan
110
10,064
-
10,064
Restricted Stock Award - Net - Employees
3
160

-
160
Restricted Stock Award - Board of Directors
3
280
-
280
Cash Dividends on Common Stock ($0.8700 per share)
-
-
(15,298
)
(15,298
)
Cash Dividends on Preferred Stock
-
-
(90
)
(90
)
Common Stock Expenses
-
-
(25
)
(25
)
Balance at September 30, 2022
17,638
$
232,423
$
165,652
$
398,075

Middlesex Water Company (Middlesex or the Company) is the parent company and sole shareholder of Tidewater Utilities, Inc. (Tidewater), 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). Southern Shores Water Company, LLC (Southern Shores) and White Marsh Environmental Systems, Inc. (White Marsh) are wholly-owned subsidiaries of Tidewater. The financial statements for Middlesex and its wholly-owned subsidiaries are reported on a consolidated basis. All significant intercompany accounts and transactions have been eliminated.

The consolidated notes within the ~~2021~~2022 Annual Report on Form 10-K (the ~~2021~~2022 Form 10-K) are applicable to these financial statements and, in the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary (including normal recurring accruals) to present fairly the financial position as of ~~September~~June 30, ~~2022,~~2023, the results of operations for the three ~~month~~ and ~~nine~~six month periods ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022 and cash flows for the ~~nine~~six month periods ended ~~September~~June 30, ~~2022~~2023 and ~~2021.~~2022. Information included in the Condensed Consolidated Balance Sheet as of December 31, ~~2021,~~2022, has been derived from the Company’s December 31, ~~2021~~2022 audited financial statements included in the ~~2021~~2022 Form 10-K.

Middlesex President and Chief Executive Officer Retirement Announcement - On May 16, 2023, President and Chief Executive Officer, Dennis W. Doll announced a plan to retire upon turning age 65. Mr. Doll’s retirement is planned for the later of December 31, 2023 or, the date when a successor is duly named and effectively transitioned into the position. Mr. Doll will remain a member of the Middlesex Board of Directors (Board) through the expiration of his current term in May 2024. A search for Mr. Doll’s successor is being led by the Compensation Committee of the Board in collaboration with a nationally-recognized executive search firm.

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 in South Plainfield, New Jersey exceeded a ~~recently~~standard promulgated in a NJDEP ~~standard~~regulation that became effective in 2021. The NJDEP standard for PFOA was developed based on a Health-based Maximum Contaminant Level of 14 parts per trillion. Neither the NJDEP nor Middlesex ~~has~~had characterized this exceedance as an acute health threat. However, Middlesex was required by the regulation to notify its affected customers and complied in November ~~2021 as required by the regulation.~~2021.

The Notice further required the Company to take any action necessary to comply with the new standard by September 7, 2022. ~~The~~Prior to 2021, the Company began design for construction of an enhanced treatment process at the Park Avenue Wellfield Treatment Plant to comply with the new standard prior to the regulation being enacted. ~~Since~~At that time, the completion isof enhanced treatment process was not expected until ~~mid-2023,~~mid-2023. Consequently, in ~~December~~November 2021, the Company implemented an interim solution to meet the Notice ~~requirements. The~~requirements, which included putting the Park Avenue Wellfield Treatment Plant ~~was taken~~in off-line status and obtaining alternate sources of ~~supply have been obtained. Simultaneously,~~supply. In June 2022, the Company accelerated the in-service date for a portion of the enhanced treatment project ~~to allow~~that allowed a restart of the Park Avenue Wellfield Treatment Plant ~~ahead of historical higher water demand periods during the summer months.~~

~~In June 2022, construction of the accelerated portion was completed and the Park Avenue Wellfield Treatment Plant is effectively treating ground water~~ to ensure compliance with all state and federal drinking water standards. Working in coordination with the NJDEP, the Company successfully restarted the Park Avenue Wellfield Treatment Plant and introduced wellfield water into the distribution system. Water being delivered to customers is in compliance with all United States Environmental Protection Agency and NJDEP drinking water standards, including the newly established water quality standard for PFOA.

On September 13, 2022, the Company entered into an Administrative Consent Order (ACO) with the NJDEP, which requires the Company to take whatever actions ~~are~~ necessary to achieve and maintain compliance with the Safe Drinking Water Act, N.J.S.A, 58:12A-1 et seq., and the Safe Drinking Water Act regulations N.J.A.C. 7:10-1 et seq., including applicable public notifications. The Company’s agreement to enter into an ACO avoided any further Notice regarding the fact that the permanent treatment solution was not in service by September 7, 2022. ~~The Company must issue the public notifications by February 22, 2023 and continue to complete and distribute public information as~~As prescribed in the ~~ACO.~~ACO, the Company will issue periodic public notifications until the ACO is closed. In addition, in accordance with the ACO:

In June 2023, the Company ~~shall complete~~completed the permanent construction of the Park Avenue Wellfield treatment upgrades, ~~place~~placed the treatment upgrades into operation, and the Company believes all water at the Park Avenue Wellfield Treatment Plant ~~shall be treated to comply~~complies with the NJDEP PFOA ~~NJDEP~~ standards.

The Company ~~must perform required sample testing and reporting for PFOA subsequent to completion of the Park Avenue Wellfield treatment upgrades.~~

~~The Company shall submit to the NJDEP quarterly progress reports detailing the Company’s compliance~~believes it has complied with ~~the ACO.~~

~~The Company’s failure to comply with the compliance schedule and/or progress reporting~~all current requirements of the ACO ~~could lead to penalties up to $500~~ ~~per day. In addition,~~and is awaiting the ~~NJDEP could penalize the Company for other violations, if any, of the ACO.~~NJDEP’s confirmation.

In November 2021, the Company was served with two PFOA-related class action lawsuits seeking restitution for medical, water 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. The Company’s insurance provider has acknowledged coverage of potential liability which may result from these lawsuits. In May 2022, the Company impleaded 3M Company (3M) as a third-party defendant in one of these class action lawsuits. The Company ~~has taken this action in addition to~~had previously initiated a separate lawsuit against the ~~Company initiated against~~claimed polluter, 3M, seeking to hold 3M accountable for ~~introduction of~~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 Wellfield facility. A trial date is set for October 2, 2023 in the United States District Court for the District of New Jersey in Newark, New Jersey.

In January 2022, the Company filed a petition with the New Jersey Board of Public Utilities (NJBPU) seeking to establish a regulatory asset and deferred accounting treatment until its next base rate setting proceeding for all costs associated with the interim solution to comply with the Notice. The Company is currently awaiting a decision on this matter from the NJBPU.

~~Sale of Subsidiary~~ – In January 2022, Middlesex closed on the Delaware Public Service Commission (DEPSC) approved sale of 100% of the common stock of its subsidiary Tidewater Environmental Services, Inc. to Artesian Wastewater Management, Inc. for $6.4 million in cash and other consideration, resulting in a $5.2 million pre-tax gain. The Company will continue to own and operate its non-regulated water and wastewater contract operations business in Delaware.

~~Borough of Avalon, New JerseyContract Renewal~~ – In August 2022, USA, Middlesex’s non-regulated subsidiary, was awarded a competitively-bid 10-year operations and maintenance contract with the Borough of Avalon, New Jersey (Avalon) under which USA will continue to operate Avalon’s water utility, sewer utility and storm water system. USA is also required to manage capital projects funded by Avalon. USA previously operated Avalon’s water utility, sewer utility and storm water system under a 10-year contract that expired in August 2022. The new contract commenced September 1, 2022.

Coronavirus (COVID-19) Pandemic– On ~~October 13, 2022,~~May 11, 2023, the United States ~~Secretary~~Department of Health and Human Services ~~renewed~~declared the ~~determination that a nationwide health emergency exists as a result~~end of the COVID-19 ~~Pandemic.~~Pandemic nationwide health emergency. While the Company’s operations and capital construction program have not been materially disrupted to date from the pandemic, the COVID-19 impact on economic conditions nationally continues to be uncertain and could affect the Company’s results of operations, financial condition and liquidity in the future. In New Jersey, the declared COVID-19 State of Emergency ended in March 2022. In Delaware, the declared COVID-19 State of Emergency Order ended in July 2021.

The NJBPU ~~and the DEPSC have~~has approved the tracking of COVID-19 related incremental costs for potential recovery in customer rates in future rate proceedings. ~~Neither jurisdiction has established~~In May 2023, Middlesex filed a ~~timetable or definitive formal procedures for seeking cost recovery.~~petition to defer consideration of rate recovery of COVID-19 related incremental costs incurred until its next base rate case. The Company has increased its allowance for doubtful accounts for expected ~~increases in~~higher accounts receivable write-offs due to the financial impact of COVID-19 on customers. Since the ultimate rate treatment to be determined by the NJBPU and the DEPSC regarding incremental costs related to COVID-19 is not definitively known at this time, the Company has not deferred any such costs. We will continue to monitor the effects of COVID-19 and evaluate its impact on the Company’s results of operations, financial condition and liquidity.

There is no new adopted or proposed accounting guidance that the Company is aware of that could have a material impact on the Company’s financial statements.

Middlesex - – In ~~December 2021, Middlesex’s~~May 2023, Middlesex filed a petition towith the NJBPU seeking permission to increase ~~its~~annual base water ~~rates was concluded, based on a negotiated settlement, resulting in an expected increase in annual operating~~ revenues ~~of $27.7~~by approximately $34 million. The ~~approved tariff rates were designed~~request was necessitated predominantly by capital infrastructure investments Middlesex has made, or has committed to make, to ensure proper maintenance, development and improvement of its utility assets to support continued regulatory compliance and overall quality of service. We cannot predict when and whether the NJBPU will ultimately approve, deny, or reduce the amount of the request. Under New Jersey statute, the NJPBU must render a decision within nine months of filing a base rate change petition.

Replacement of Middlesex and Middlesex customer-owned lead service lines is required by the New Jersey Lead Service Line Replacement Law. In May 2023, Middlesex filed a petition seeking NJBPU approval of Middlesex’s proposed cost recovery of its Lead Service Line Replacement Plan and cost recovery of project costs associated with replacing Middlesex customer-owned lead service lines. Under this legislation, these costs would be recovered through future customer surcharges. Middlesex currently estimates that replacement of Middlesex and Middlesex customer-owned lead service lines will be approximately $57 million to $95 million over a nine-year period. We cannot predict when and whether the NJBPU will ultimately approve, deny, or amend this petition.

In May 2023, Middlesex filed a petition with the NJBPU seeking approval of a Distribution System Improvement Charge (DSIC) Foundation Filing, which is a prerequisite to implementing a DSIC rate that allows water utilities to recover ~~increased operating costs as well as~~investments in, and generate a return on, ~~invested~~qualifying capital of $513.5 million, based on an authorized return on common equity of 9.6%. The increase is being 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. As part of the negotiated settlement, the Purchased Water Adjustment Clause (PWAC), which is a rate mechanism that allows for recovery of increased purchasedimprovements to their water ~~costs~~distribution system made between base rate ~~case filings, was reset to zero.~~proceedings. We cannot predict when and whether the NJBPU will ultimately approve, deny, or amend this petition.

In September 2022, the NJBPU approved Middlesex's Emergency Relief Motion to reset its ~~PWAC~~Purchased Water Adjustment Clause tariff rate to recover additional costs of $~~2.7~~$2.7 million for the purchase of treated water from a non-affiliated ~~regulated~~ water utility. The increase, effective October 1, 2022, is on an interim basis and subject to refund with interest, pending final resolution of this ~~matter.~~

~~Tidewater -~~ On August 31, 2022, DEPSC issued an Order requiring Tidewater to reduce its base rates charged to general metered and private fire customers by 6%, effective for service rendered on and after September 1, 2022. In June 2022, the Delaware Division of the Public Advocate filed a petition with the DEPSC requesting that Tidewater’s rates be reduced based on the claim that Tidewater had been earning above its authorized rate of return. The rate reductionmatter, which is expected ~~to reduce annual revenues by approximately $2.2million.~~

~~In June 2022, Tidewater notified the DEPSC of its intention to likely file for a base water rate increase~~ in the ~~first~~third quarter of ~~2023 based on projected increases in operational expenses and capital construction expenditures.~~2023.

Pinelands - ~~In September 2022,~~– On April 12, 2023, Pinelands Water and Pinelands Wastewater ~~filed separate petitions with~~concluded their base rate case matters when the NJBPU ~~seeking permission to~~approved a combined $1.0 million increase in annual base rates, ~~by approximately $0.6 million and $0.4 million per year, respectively. These~~effective April 15, 2023. The requests were necessitated by capital infrastructure investments ~~both~~the companies have made ~~or have committed to make, and~~as well as increased operations and maintenance costs. ~~We cannot predict whether the NJBPU will ultimately approve, deny, or reduce the amount of the requests. A decision by the NJBPU in either matter is not expected before the first quarter of 2023.~~

Twin Lakes Utilities, Inc. (Twin Lakes) - –Twin Lakes provides water services to approximately 115 residential customers in Shohola, Pennsylvania. Pursuant to the Pennsylvania Public Utility Code, Twin Lakes filed a petition requesting the Pennsylvania Public Utilities Commission (PAPUC) to order the acquisition of Twin Lakes by a capable public utility. The PAPUC assigned an Administrative Law Judge (ALJ) to adjudicate the matter and submit a recommended decision (Recommended Decision) to the PAPUC. 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 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. Twin Lakes immediately filed a Petition For Review (PFR) with the Commonwealth Court of Pennsylvania (the Commonwealth Court) seeking reversal and vacation of the escrow requirement on the grounds that it violates the Pennsylvania Public Utility Code as well as the United States Constitution. In addition, Twin Lakes filed an emergency petition for stay of the PAPUC Order pending the Commonwealth Court’s review of the merits arguments contained in Twin Lakes’ PFR. In December 2021, the Commonwealth Court granted Twin Lakes’ emergency petition, pending its review. In August 2022, the Commonwealth Court issued an opinion upholding PAPUC’s November 2021 Order in its entirety. In September 2022, Twin Lakes filed a Petition For Allowance of Appeal (Appeal Petition) to the Supreme Court of Pennsylvania seeking reversal of the Commonwealth Court’s decision to uphold the escrow requirement on the grounds that the Commonwealth Court erred in failing to address Twin Lakes’ claims that because the $1.7 million escrow requirement placed on Middlesex violated Middlesex’s constitutional ~~claims. The timing~~rights, Middlesex’s refusal to submit this escrow payment would jeopardize the relief Twin Lakes was otherwise entitled to in the appointment of the ~~final decision by~~Receiver Utility. In March 2023, the Supreme Court of Pennsylvania ~~and~~issued a decision denying Twin Lakes’ Appeal Petition without addressing this claim on the ~~final adjudication~~merits. As a result of ~~this matter cannot be predicted at this time.~~the Pennsylvania Courts’ failure to address Twin Lakes’ claim, Middlesex has subsequently filed a Complaint with the United States District Court for the Middle District of Pennsylvania to address the issue of whether the PAPUC’s Order violated Middlesex’s rights under the United States Constitution. We are currently awaiting the Court’s decision.

The financial results, total assets and financial obligations of Twin Lakes are not material to Middlesex.

Common Stock - – During the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, there were ~~110,614~~75,764 common shares (approximately ~~$10.1~~$5.7 million) and ~~10,641~~76,547 common shares (approximately ~~$0.9~~$7.0 million) respectively, issued under the Middlesex Water Company Investment Plan (the Investment Plan).

In April 2023, Middlesex received approval from the NJBPU to issue and sell up to 1.0 million shares of its common stock, without par value, through December 31, 2025. Sales of additional shares of common stock are part of the Company’s comprehensive financing plan to fund its multi-year utility plant infrastructure investment program. As described below in “Long-term Debt”, the NJBPU also approved the debt funding component of the financing plan.

In March 2023, the Company began offering shares of its common stock for purchase at a 3% discount to participants in the Investment Plan. The ~~3% purchase~~ discount offering ~~period on~~will continue until 200,000 shares are purchased at the ~~Company’s~~discounted price or December 1, 2023, whichever event occurs first. The discount applies to all common stock ~~through~~purchases made under the Investment Plan, ~~expired on August 1, 2022.~~whether by optional cash payment or by dividend reinvestment.

In May 2023, Middlesex received approval from the NJBPU to increase the number of authorized shares under the Investment Plan by 0.7 million shares.

Long-term Debt - ~~In May 2022, Middlesex repaid~~– Subject to regulatory approval, the Company periodically issues long-term debt to fund its ~~two outstanding~~investments in utility plant. To the extent possible and fiscally prudent, the Company finances qualifying capital projects under State Revolving Fund (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.

Under the New Jersey SRF program, borrowers first enter into a construction loan agreement with the New Jersey Infrastructure Bank (NJIB) at a below market interest rate. When construction ~~loans by issuing~~on the qualifying project is substantially complete, NJIB will coordinate the conversion of the construction loan into a long-term securitized loan with a portion of the principal balance having a stated interest rate of zero percent (0%) and a portion of the principal balance at a market interest rate at the time of closing using the credit rating of the State of New Jersey.

Although the Company has no current projects in the NJIB loan program, it is seeking to have several projects added to the qualified list in order to borrow under the NJIB loan program.

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. The Company expects to issue debt securities in a series of one or more transaction offerings over a multi-year period 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) ~~to the NJIB under two loan agreements. The total amount of FMBs issued is $52.2 million and~~with a 2043 maturity date designated as Series ~~2022A ($16.2 million)~~2023A. Proceeds were used to reduce the Company’s outstanding balances under its bank lines of credit.

In May 2023, Tidewater closed on a $20.0 million loan from CoBank, ACB (CoBank) with an interest rate of 5.71% and ~~Series 2022B ($36.0 million)~~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.

In April 2023, Tidewater closed on three Delaware Public Service Commission (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, relocation and/or interconnection of transmission mains. Tidewater has drawn a total of $1.3 million through June 30, 2023 and expects that the requisitions will continue through mid-2024.

In December 2021, Tidewater closed on a DEPSC-approved $5.0 million Delaware SRF loan at an interest rate of 2.0%. 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.

~~In November 2021, Tidewater received approval from the DEPSC to borrow up to $5.0~~ ~~million under the Delaware State Revolving Fund (SRF) Program~~loan was for construction of a one million gallon elevated storage tank. ~~Tidewater closed on the $5.0~~ ~~million loan at an interest rate of~~ ~~2.0% in December 2021 and began receiving disbursements in January 2022.~~ Through ~~September~~June 30, ~~2022,~~2023, Tidewater has drawn a total of $~~2.6~~$4.2 million and expects ~~borrowing under this loan to~~that the requisitions will continue through ~~mid-2023.~~the third quarter of 2023. The final maturity date on the loan is 2044.

Under the Delaware SRF Program, borrowers submit reimbursement requisitions during the construction period. As the proceeds are received from the requisitions, Tidewater records a corresponding debt obligation amount.

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. Proceeds were used to pay off outstanding intercompany loans with Middlesex and for ongoing capital projects.

Fair Value of Financial Instruments -–The following methods and assumptions were used by the Company in estimating its fair value disclosure for financial instruments for which it is practicable to estimate that value. The carrying amounts reflected in the condensed consolidated balance sheets for cash and cash equivalents, ~~trade receivables,~~accounts receivable, accounts payable and notes payable approximate their respective fair values due to the short-term maturities of these instruments. The fair value of FMBs ~~and SRF Bonds (collectively,~~in the ~~Bonds)~~table below issued by Middlesex is based on quoted market prices for similar publicly traded issues. Under the fair value hierarchy, the fair value of cash and cash equivalents is classified as a Level 1 measurement and the fair value of notes payable and the ~~Bonds~~FMBs in the table below are classified as Level 2 measurements. The carrying amount and fair value of the ~~Bonds~~FMBs were as follows:

	(Thousands of Dollars)
FMBs	$147,269	$139,285	$98,828	$107,781

It was not practicable to estimate ~~their~~the fair value on our outstanding long-term debt for which there is no quoted market price and there is not an active trading market. For details, including carrying value, interest rates and due dates on these series of long-term debt, please refer to those series noted as “Amortizing Secured ~~Note”,~~Notes” and “State Revolving Trust ~~Note”, “State Revolving Trust Bond”, “Construction Loans”~~Notes” on the Condensed Consolidated Statements of Capital Stock and Long-Term Debt). The carrying amount of these instruments was $~~160.1~~$220.2 million and $~~212.3~~$159.1 million at ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. Customer advances for construction have carrying

amounts of $~~22.4~~$21.0 million and $~~23.5~~$21.4 million at ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. Their relative fair values cannot be accurately estimated since future refund payments depend on several variables, including new customer connections, customer consumption levels and future rate increases.

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 and restrictions.

Basic earnings per share (EPS) are computed on the basis of the weighted average number of shares outstanding during the period presented. Diluted EPS assumes the conversion of the Convertible Preferred Stock $7.00 Series.

The Company has identified two reportable segments. One is the regulated business of collecting, treating and distributing water on a retail and wholesale basis to residential, commercial, industrial and fire protection customers in parts of New Jersey and Delaware. This segment also includes regulated wastewater systems in New Jersey and Delaware. The Company is subject to regulations as to its rates, services and other matters by New Jersey and Delaware with respect to utility services within these states. The other segment is primarily comprised of non-regulated contract services for the operation and maintenance of municipal and private water and wastewater systems

in New Jersey and Delaware. Inter-segment transactions relating to operational costs are treated as pass-through expenses. Finance charges on inter-segment loan activities are based on interest rates that are below what would normally be charged by a third party lender.

The interest ~~rate~~rates are set for borrowings under the Bank of America and PNC Bank lines of credit ~~is set~~ using the Bloomberg Short-Term Bank Yield Index and the Secured Overnight Financing Rate (SOFR), respectively, and then adding a specific financial institution credit ~~spread, which varies by financial institution.~~spread. The interest rate for borrowings under the CoBank line of credit are set weekly using CoBank’s internal cost of funds index that is similar to the ~~Standard Overnight Financing Rate~~SOFR and adding a credit spread. There is no requirement for a compensating balance under any of the established lines of credit.

The weighted average interest rate on the outstanding borrowings at ~~September~~June 30, ~~2022~~2023 under these credit lines is ~~3.81~~%6.24%.

The weighted average daily amounts of borrowings outstanding under ~~the Company’s~~these credit lines ~~of credit~~ and the weighted average interest rates on those amounts were as follows:

			Three Months Ended			Nine Months Ended
Average Daily Amounts Outstanding		$	33,750			$	40,543		$	22,648			$	22,841
Weighted Average Interest Rates			3.34	%			1.13	%		2.48	%			1.14	%

The maturity dates for the $~~40.5~~$23.5 million outstanding as of ~~September~~June 30, ~~2022~~2023 are in ~~October 2022 to~~ ~~December 2022~~,July 2023 through September 2023 and were or are expected to be extended at the discretion of the Company.

Water Supply - –Middlesex has an agreement with the New Jersey Water Supply Authority (NJWSA) for the purchase of untreated water through November 30, 2023, which provides for an average purchase of 27 million gallons a day (mgd). The agreement renewal process is underway and a new agreement is expected to be in place prior to the expiration date of the existing agreement. Middlesex does not expect the agreement terms and conditions to vary. Pricing is set annually by the NJWSA through a public rate making process. The agreement has provisions for additional pricing in the event Middlesex overdrafts or exceeds certain monthly and annual thresholds.

Middlesex has an agreement with a non-affiliated regulated water utility for the purchase of treated water. This agreement, which expires February 27, 2026,, provides for the minimum purchase of 3 mgd of treated water with provisions for additional purchases.

Tidewater contracts with the City of Dover, Delaware to purchase 15 million gallons of treated water annually.

~~Guarantees -~~ LeasesAs part of an agreement with the County of Monmouth, New Jersey (County), prior to 2020 Middlesex had served as guarantor of the performance of an unaffiliated wastewater treatment contractor and partner (Contractor), to operate a County-owned leachate pretreatment facility.

In November 2019, Middlesex was notified that the County terminated its Agreement with the Contractor. The Contractor had initiated legal action against the County that, in part, contests the County’s exercise of this termination. The County filed a counter-claim against the Contractor’s parent company and has brought Middlesex into the suit as a third-party defendant. Our ongoing monitoring of this litigation has led to the conclusion that we do not anticipate the ultimate outcome will have a material impact, if any, on the Company’s results of operations or financial condition.

~~Leases -~~ –The Company determines if an arrangement is a lease at inception. Generally, a lease agreement exists if the Company determines that the arrangement gives the Company control over the use of an identified asset and obtains substantially all of the benefits from the identified asset.

The Company has entered into an operating lease of office space for administrative purposes, expiring in 2030. The Company has not entered into any finance leases. The exercise of a lease renewal option for the Company’s administrative offices is solely at the discretion of the Company.

The right-of-use (ROU) asset recorded represents the Company’s right to use an underlying asset for the lease term and lease liability represents the Company’s obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company’s operating lease does not provide an implicit discount rate and as such the Company used an estimated incremental borrowing rate (~~4.03~~%(4.03%) based on the information available at the commencement date in determining the present value of lease payments.

Given the impacts of accounting for regulated operations, and the resulting recognition of expense at the amounts recovered in customer rates, expenditures for operating leases are consistent with lease expense and were $~~0.2~~$0.2 million for each of the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and $~~0.6~~$0.4 million for each ~~of the nine~~at this six months ended ~~September~~June 30, 2023 and 2022, ~~and 2021,~~ respectively.

Information related to operating lease ROU assets and lease liabilities is as follows:

	(In Millions) As of
ROU Asset at Lease Inception	$	7.3		$	7.3
Accumulated Amortization		(3.3	)		(2.8	)
Current ROU Asset	$	4.0		$	4.5

The Company’s future minimum operating lease commitments as of ~~September~~June 30, ~~2022~~2023 are as follows:

Construction - –The Company has forecasted to spend approximately ~~$85~~$101 million for its construction program in ~~2022.~~2023. The Company has entered into several construction contracts that, in the aggregate, obligate expenditure of an estimated ~~$26~~$13 million in the future. The actual amount and timing of capital expenditures is dependent on the need for upgrade or replacement of existing infrastructure, customer growth, residential new home construction and sales, project scheduling, supply chain issues and continued refinement of project scope and ~~costs and could be impacted if the effects of new variants of COVID-19 pandemic arise and continue for an extended period of time (for further discussion of the impact of COVID-19~~costs. With continued upward pressure on ~~the Company, see~~ ~~Note 1 - Coronavirus (COVID-19) Pandemic). There~~mortgage interest rates, as well as other financial market uncertainties, there is no assurance that projected customer growth and residential new home construction and sales will occur.

PFOA Matter –In November 2021, the Company was served with two PFOA-related class action lawsuits seeking restitution for medical, water replacement and other related costs and economic damages. These lawsuits are in the early stages of the legal process and their ultimate resolution cannot be predicted at this time. The Company’s insurance provider has acknowledged coverage of potential liability resulting from these lawsuits (for further discussion of this matter, see Note 1 - Regulatory Notice of Non-Compliance).

Contingencies -–Based on our operations in the heavily-regulated water and wastewater industries, the Company is routinely involved in disputes, claims, lawsuits and other regulatory and legal matters, including responsibility for fines and penalties relative to regulatory compliance. At this time, Management does not believe the final resolution of any such matters, whether asserted or unasserted, will have a material adverse effect on the Company’s financial position, results of operations or cash flows. In addition, the Company maintains business insurance coverage that may mitigate the effect of any current or future loss contingencies.

Change in Control Agreements - –The Company has Change in Control Agreements with ~~certain of~~ its executive officers that provide compensation and benefits in the event of termination of employment under certain conditions in connection with a change in control of the Company.

Pension Benefits – - The Company’s defined benefit pension plan (Pension Plan) covers all active employees hired prior to April 1, 2007. Employees hired after March 31, 2007 are not eligible to participate in this plan, but do participate in a defined contribution plan that provides for a potential annual contribution in an amount at the discretion of the ~~Company.,~~Company, based upon a percentage of the participants’ annual paid compensation. For each of the ~~three- and nine-month~~six month periods ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, the Company did not make cash contributions to the Pension Plan. The Company expects to make cash contributions of approximately ~~$3.4~~$1.9 million over the remainder of the current year. The Company also maintains an unfunded supplemental retirement benefit plan for certain active and retired Company officers and currently pays ~~$0.4~~$0.5 million in annual benefits to the retired participants.

Other Postretirement Benefits –- – The Company’s retirement plan other than pensions (Other Benefits Plan) covers substantially all currently eligible retired employees. Employees hired after March 31, 2007 are not eligible to participate in this plan. Coverage includes healthcare and life insurance. For each of the ~~three-~~six month ~~and nine-month~~ periods ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, the Company did not make cash contributions to its Other Benefits Plan. The Company ~~does not expect~~expects to make ~~any~~additional Other Benefits Plan cash contributions ~~to its Other Benefits Plan~~of $0.9 million over the remainder of ~~2022.~~the current year.

The following tables set forth information relating to the Company’s periodic costs (benefit) for its employee retirement benefit plans:

*Service cost is included in Operations and Maintenance expense on the ~~Condensed Consolidated Statements~~consolidated statements of ~~Income;~~income; all other amounts are included in Other ~~Income/Expense,~~Income (Expense), net.

The Company’s revenues are primarily generated from regulated tariff-based sales of water and wastewater services and non-regulated operation and maintenance contracts for services on water and wastewater systems owned by others. Revenue from contracts with customers is recognized when control of a promised good or service is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.

The Company’s regulated revenue from contracts with customers results from tariff-based sales from the provision of water and wastewater services to residential, industrial, commercial, fire-protection and wholesale customers. Residential customers are billed quarterly while most industrial, commercial, fire-protection and wholesale customers are billed monthly. Payments by customers are due between 15 and 30 days after the invoice date. Revenue is recognized as the water and wastewater services are delivered to customers as well as from accrual of unbilled revenues estimated from the last meter reading date to the end of the accounting period utilizing factors such as historical customer data, regional weather indicators and general economic conditions in the relevant service territories. Unearned Revenues and Advance Service Fees include fixed service charge billings in advance to Tidewater customers recognized as service is provided to the customer.

Non-regulated service contract revenues consist of base service fees, as well as fees for additional billable services provided to customers. Fees are billed monthly and are due within 30 days after the invoice date. The Company considers the amounts billed to represent the value of these services provided to customers. These contracts expire at various times through June 2032 and contain remaining performance obligations for which the Company expects to recognize revenue in the future. These contracts also contain termination provisions.

Substantially all of the amounts included in operating revenues and accounts receivable are from contracts with customers. The Company records its allowance for doubtful accounts based on historical write-offs combined with an evaluation of current economic conditions within its service territories.

The Company’s federal income tax returns for the tax years 2014 through 2017 were selected for examination by the Internal Revenue Service (IRS), which included the tax year in which the Company had adopted the final IRS tangible property regulations and changed its accounting method for the tax treatment of expenditures that qualified as deductible repairs. As a result of the audit examination, the Company agreed to certain modifications of its accounting method for expenditures that qualify as deductible repairs. In 2019, the Company paid $~~2.7~~ ~~million in income taxes and $0.1~~ million in interest in connection with the conclusion of the 2014 through 2017 federal income tax return audits. The statutory review period for 2018 and prior federal income tax returns has now closed, and as such, in the third quarter of 2022 the Company reversed the income tax reserve provision and interest expense liability of $~~0.5~~ ~~million and $0.2~~ ~~million, respectively.~~

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

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements of Middlesex Water Company (Middlesex or the Company) included elsewhere herein and with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~2022.

Certain statements contained in this periodic report and in the documents incorporated by reference constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. The Company intends that these statements be covered by the safe harbors created under those laws. They include, but are not limited to statements as to:

These forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from anticipated results and outcomes include, but are not limited to:

Many of these factors are beyond the Company’s ability to control or predict. Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements, which only speak to the Company’s understanding as of the date of this report. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

For an additional discussion of factors that may affect the Company’s business and results of operations, see Item 1A. - Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~2022.

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. (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 provide regulated wastewater services in New Jersey. We are regulated by state public utility commissions as to rates charged to customers for water and wastewater services, as to the quality of water and wastewater service we provide and as to certain other matters in the states in which our regulated subsidiaries operate. Only our Utility Service Affiliates, Inc. (USA), Utility Service Affiliates (Perth Amboy), Inc. (USA-PA) and White Marsh Environmental Services, Inc. (White Marsh) subsidiaries are not regulated public utilities as related to rates and services quality. All municipal or commercial entities whose utility operations are managed by these entities however, are subject to environmental regulation at the federal and state levels.

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 Bayview subsidiary provides water services in Downe Township, New Jersey. 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, provide water services to approximately ~~57,000~~56,000 retail customers in New Castle, Kent and Sussex Counties, Delaware. Tidewater’s subsidiary, White Marsh, services approximately ~~6,200~~4,500 customers in Kent and Sussex Counties through various operations and maintenance contracts.

USA-PA operates the water and wastewater systems for the City of Perth Amboy, New Jersey (Perth Amboy) under a 10-year operations and maintenance contract expiring in 2028. In addition to performing day-to day operations, USA-PA is also responsible for emergency response and management of capital projects funded by Perth Amboy.

USA operates the Borough of Avalon, New Jersey’s (Avalon) water utility, sewer utility and storm water system under a ten-year operations and maintenance contract expiring in ~~August 2032 (for further discussion of USA’s recent renewal of its operations and maintenance contract with Avalon, see “~~~~Recent Developments-Avalon Contract Renewal”~~ ~~below).~~2032. USA also operates the Borough of Highland Park, New Jersey’s (Highland Park) water and wastewater systems under a 10-year operations and maintenance contract expiring in ~~June~~ 2030. ~~These contracts also require~~In addition to performing day-to-day service operations, USA ~~to manage~~is responsible for emergency response and management of capital projects funded by Avalon and Highland Park.

Under a marketing agreement with HomeServe USA Corp. (HomeServe) expiring in 2031, USA offers residential customers in New Jersey and Delaware water and wastewater related services and 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 ~~functions~~matters associated with HomeServe’s service contracts.

USA also provides unregulated water and wastewater services under contract with several New Jersey municipalities.

Middlesex Base Water Rate Increase Request - In May 2023, Middlesex filed a petition with the New Jersey Board of Public Utilities (NJBPU) seeking permission to increase annual base water revenues by approximately $34 million. The request was necessitated predominantly by capital infrastructure investments Middlesex has made, or has committed to make, to ensure proper maintenance, development and improvement of its utility assets to support continued regulatory compliance and overall quality of service. We cannot predict when and whether the NJBPU will ultimately approve, deny, or reduce the amount of the request. Under New Jersey statute, the NJPBU must render a decision within nine months of filing a base rate change petition.

Middlesex President and Chief Executive Officer Retirement Announcement – In May 2023, President and Chief Executive Officer (CEO), Dennis W. Doll announced a plan to retire upon turning age 65. Mr. Doll’s retirement is planned for the later of December 31, 2023 or, the date when a successor is duly named and effectively transitioned into the position. Mr. Doll will remain a member of the Middlesex Board of Directors (Board) through the expiration of his current term in May 2024. A search for Mr. Doll’s successor is being led by the Compensation Committee of the Board in collaboration with a nationally-recognized executive search firm.

Pinelands’ Base Rate Increases Approved - On April 12, 2023, Pinelands Water and Pinelands Wastewater concluded their base rate case matters when the NJBPU approved a combined $1.0 million increase in annual base rates, effective April 15, 2023. The requests were necessitated by capital infrastructure investments the companies have made as well as increased operations and maintenance costs.

Middlesex- In April 2023, Middlesex received approval from the NJBPU to issue and sell up to 1.0 million shares of its common stock, without par value, through December 31, 2025. Additionally, in April 2023, Middlesex received approval from the NJBPU to borrow up to $300.0 million from the New Jersey State Revolving Fund (SRF) Program, the New Jersey Economic Development Authority, private placement and other financial institutions as needed through December 31, 2025. The Company expects to issue equity and debt securities in a series of transaction offerings over a multi-year period 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. Proceeds were used to reduce the Company’s outstanding balances under its bank lines of credit.

In May 2023, Middlesex received approval from the NJBPU to increase the number of authorized shares under the Investment Plan by 0.7 million shares.

Tidewater- In April 2023, Tidewater closed on three Delaware Public Service Commission (DEPSC)-approved 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, relocation and/or interconnection of transmission mains. Tidewater has drawn a total of $1.3 million through June 30, 2023 and expects that the requisitions will continue through mid-2024.

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. 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.

Pinelands - 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. Proceeds from the loans were used to pay off outstanding intercompany loans with Middlesex and for ongoing capital projects.

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 maintain and improve service for the current and future generations of water and wastewater customers. The Company plans to invest approximately ~~$85~~$50 million in ~~2022~~second half of 2023 in connection with projects that include, but are not limited to:

The actual amount and timing of capital expenditures is dependent on project scheduling and refinement of engineering estimates for certain capital projects.

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 in South Plainfield, New Jersey exceeded a ~~recently~~standard promulgated in a NJDEP ~~standard~~regulation that became effective in 2021. The NJDEP standard for PFOA was developed based on a Health-based Maximum Contaminant Level of 14 parts per trillion. Neither the NJDEP nor Middlesex has characterized this exceedance as an acute health threat. However, Middlesex was required to notify its affected customers and complied in November 2021 as required by the regulation.

~~The Notice further required~~Prior to 2021, the Company ~~to take any action necessary to comply with the new standard by September 7, 2022. The Company~~ began design for construction of an enhanced treatment process at the Park Avenue Wellfield Treatment Plant to comply with the new standard prior to the regulation being enacted. ~~Since~~At that time, the completion isof enhanced treatment process was not expected until ~~mid-2023,~~mid-2023. Consequently, in ~~December~~November 2021, the Company implemented an interim solution to meet the Notice requirements. ~~The Park Avenue Wellfield Treatment Plant was taken off-line and alternate sources of supply have been obtained. Simultaneously,~~

In June 2022, the Company accelerated the in-service date for a portion of the enhanced treatment project ~~to allow~~that allowed a restart of the Park Avenue Wellfield ~~treatment Plant ahead of historical higher water demand periods during the summer months.~~

~~In June 2022, construction of the accelerated portion was completed and the Park Avenue Wellfield~~ Treatment Plant ~~is effectively treating ground water~~ to ensure compliance with all state and federal drinking water standards. Working in coordination with the NJDEP, the Company successfully restarted the Park Avenue Wellfield Treatement Plant and introduced wellfield water into the distribution system. Water being delivered to customers is in compliance with all ~~United States Environmental Protection Agency and NJDEP drinking water standards,~~ ~~including the newly established water quality standard for PFOA.~~

OnIn September ~~13,~~ 2022, the Company entered into an Administrative Consent Order (ACO) with the NJDEP with respect to the Notice, which requires the Company to take whatever actions are necessary to achieve and maintain compliance with the Safe Drinking Water Act, N.J.S.A, 58:12A-1 et seq., and the Safe Drinking Water Act regulations N.J.A.C. 7:10-1 et seq., including applicable public notifications. The Company’s agreement to enter into an ACO avoidedvoided any further ~~Notice~~notice regarding the fact that the permanent treatment solution was not in service by September 7, ~~2022.~~2022 as required by the Notice.

In June 2023, the Company completed the permanent construction of the Park Avenue Wellfield treatment upgrades, placed the treatment upgrades into operation, and the Company believes all water at the Park Avenue Wellfield Treatment Plant complies with the NJDEP PFOA standards. The Company ~~must issue the public notifications by February 22, 2023 and continue to complete and distribute public information as prescribed in the ACO. In addition, in accordance~~believes it has complied with ~~the ACO:~~

~~The Company’s failure to comply with the compliance schedule and/or progress reporting~~all current requirements of the ACO ~~could lead to penalties up to $500 per day. In addition,~~and is awaiting the ~~NJDEP could penalize the Company for other violations, if any, of the ACO.~~NJDEP’s confirmation.

In November 2021, the Company was served with two PFOA-related class action lawsuits seeking restitution for medical, water 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. The Company’s insurance provider has acknowledged coverage of potential liability which may result from these lawsuits. In May 2022, the Company impleaded 3M Company (3M) as a third-party defendant in one of these class action lawsuits. The Company ~~has taken this action in addition to~~had also initiated a separate lawsuit against the ~~Company initiated against~~claimed polluter, 3M, seeking to hold 3M accountable for ~~introduction of perfluoroalkyl substances,~~the Company’s claim that 3M introduced PFAS, which include PFOA, into the Company’s water supply at its Park Avenue Wellfield facility.

~~In January 2022,~~ A trial date is set for October 2, 2023 in the ~~Company filed a petition with~~United States District Court for the District of New Jersey Board of Public Utilities (NJBPU) seeking to establish a regulatory asset and deferred accounting treatment until its next base rate setting proceeding for all costs associated with the interim solution to comply with the Notice. The Company is currently awaiting a decision on this matter from the NJBPU.

~~Sale of Subsidiary~~ – In January 2022, Middlesex closed on the Delaware Public Service Commission (DEPSC) approved sale of 100% of the common stock of its subsidiary Tidewater Environmental Services, Inc. to Artesian Wastewater Management, Inc. for $6.4 million in ~~cash and other consideration, resulting in a $5.2 million pre-tax gain. The Company will continue to own and operate its non-regulated water and wastewater contract operations business in Delaware.~~Newark, New Jersey.

~~Avalon Contract Renewal~~ – In August 2022, USA, Middlesex’s non-regulated subsidiary, was awarded a competitively-bid 10-year operations and maintenance contract with Avalon under which USA will continue to operate Avalon’s water utility, sewer utility and storm water system. USA is also required to manage capital projects funded by Avalon. USA previously operated Avalon’s systems under a 10-year contract that expired in August 2022. The new contract commenced September 1, 2022.

~~Middlesex –~~ 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. 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 is being 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. As part of the negotiated settlement, the Purchased Water Adjustment Clause (PWAC), which is a rate mechanism that allows for recovery of increased purchased water costs between base rate case filings, was reset to zero.

In September 2022, the NJBPU approved Middlesex's Emergency Relief Motion to reset its PWAC tariff rate to recover additional costs of $2.7 million for the purchase of treated water from a non-affiliated regulated water utility. The increase, effective October 1, 2022, is on an interim basis and subject to refund with interest pending final resolution of this matter.Outlook

~~Tidewater –~~ On August 31, 2022, the DEPSC issued an Order requiring Tidewater to reduce its base rates charged to general metered and private fire customers by 6%, effective for service rendered on and after September 1, 2022. In June 2022, the Delaware Division of the Public Advocate filed a petition with the DEPSC requesting that Tidewater’s rates be reduced based on the claim that Tidewater had been earning above its authorized rate of return. The rate reduction is expected to reduce annual revenues by approximately $2.2 million.

In June 2022, Tidewater notified the DEPSC of its intention to file for a base water rate increase in the first quarter of 2023 based on projected increases in operational expenses and capital construction expenditures.

~~Pinelands -~~ In September 2022, Pinelands Water and Pinelands Wastewater filed separate petitions with the NJBPU seeking permission to increase base rates by approximately $0.6 million and $0.4 million per year, respectively. These requests were necessitated by capital infrastructure investments both companies have made, or have committed to make, and increased operations and maintenance costs. We cannot predict whether the NJBPU will ultimately approve, deny, or reduce the amount of the requests. A decision by the NJBPU in either matter is not expected before the first quarter of 2023.

~~COVID-19~~ – On October 13, 2022, the United States Secretary of Health and Human Services renewed the determination that a nationwide health emergency exists as a result of the COVID-19 Pandemic. While the Company’s operations and capital construction program have not been materially disrupted to-date from the pandemic, the COVID-19 impact on economic conditions nationally continues to be uncertain and could affect the Company’s results of operations, financial condition and liquidity in the future. In New Jersey, the declared COVID-19 State of Emergency ended in March 2022. In Delaware, the declared COVID-19 State of Emergency Order ended in July 2021.

~~The~~ ~~NJBPU and the DEPSC~~ ~~have approved the tracking of COVID-19 related incremental costs for potential recovery in customer rates in future rate proceedings. Neither jurisdiction has established a timetable or~~ ~~definitive formal procedures for seeking cost recovery~~. Since March 2020, the Company has increased its allowance for doubtful accounts for expected increases in accounts receivable write-offs due to the financial impact of COVID-19 on customers. We will continue to monitor the effects of COVID-19 and evaluate its impact on the Company’s business, results of operations, financial condition and liquidity.

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. These factors are discussed in the Results of Operations section below. Unfavorable weather patterns may occur at any time, which can result in lower customer demand for water. Due to an extended period of dry and high temperature weather conditions in New Jersey, on July 21, 2022, the Company issued a request to its customers located in our Middlesex system located in central New Jersey to voluntarily limit non-essential water use until further notice.

~~The DEPSC issued an Order requiring Tidewater to reduce its base rates charged to general metered and private fire customers by 6% (for further discussion of the impact of this on the Company, see~~ ~~Rate and Regulatory Matters, Tidewater~~ ~~above).~~ Our investments in system infrastructure continue to grow significantly and our operating costs ~~are anticipated~~continue to increase in ~~2022 and~~ 2023 in a variety of categories. These factors ~~among others, resulted in Pinelands filing for base rate increases in September 2022, will require Tidewater~~led Middlesex to file for a base rate increase in ~~the first quarter of 2023 and may require~~May 2023. Tidewater has not yet determined the need to file for ~~an additional~~a base rate increase but continues to monitor its requirements for ~~Middlesex~~a rate filing in 2023.

An additional factor that we continue to actively monitor is the impact of new variants of COVID-19 on the general economy, our suppliers and our workforce (for further discussion of the impact of COVID-19 on the Company, see “~~Recent Developments-COVID-19”~~ ~~above).~~

Overall, organic residential customer growth continues in our Tidewater system but is ~~expected to be~~ impacted by the current and evolving ~~economic~~macroeconomic market ~~conditions.~~conditions relative to residential housing. Builders and developers in our Delaware service territory are ~~already~~ experiencing longer home sales closing cycles due to supply chain ~~issues,~~constraints, which may be further affected by inflationary trends and the federal government’s ~~plan~~ongoing efforts to ~~address it~~mitigate inflation through increases in interest rates.

The Company has projected to spend approximately ~~$230~~$268 million for the ~~2022-2024~~2023-2025 capital investment program, including approximately ~~$47~~$22 million for PFAS-related treatment upgrades, $18 million for Lead and Copper Rule compliance in the Middlesex System, ~~$32~~$34 million on the RENEW Program, which is our ongoing initiative to replace water mains in the Middlesex System ~~$15~~and $8 million for construction of elevated storage tanks in our Tidewater and Middlesex ~~Systems and $4 million for the rehabilitation and other improvements associated with Middlesex’s primary field operations and inventory facilities.~~Systems.

The calendar year 2023 is a period of significant transition for the Company based on the items noted above and elsewhere in this document, including the transition of the CEO and other elements of the Company’s succession plan, various rate case and other regulatory proceedings and various construction and financing initiatives. The timing and extent of these matters, both individually and collectively, may impact financial results in 2023. No such items however, are expected to have a material adverse effect on revenues or earnings.

The discussion of the Company’s operating results is on a consolidated basis and includes significant factors by subsidiary. The Company has two operating segments, Regulated and Non-Regulated. The operations of the Regulated segment are subject to regulations promulgated by state public utility commissions as to rates and level of service. Rates and level of service in the Non-Regulated segment are subject to the terms of individually-negotiated and executed contracts with municipal, industrial and other clients. Both segments are subject to federal and state environmental, water and wastewater quality and other associated legal and regulatory requirements.

The segments in the tables included below consist of the following companies: Regulated-Middlesex, Tidewater, Pinelands and Southern Shores; Non-Regulated-USA, USA-PA, and White Marsh.

Results of Operations – Three Months Ended ~~September~~June 30, ~~202~~22023

Operating revenues for the three months ended ~~September~~June 30, ~~2022~~2023 increased ~~$7.9~~$3.1 million from the same period in ~~2021~~2022 due to the following factors:

Operation and maintenance expenses for the three months ended ~~September~~June 30, ~~2022~~2023 increased ~~$1.4~~$1.6 million from the same period in ~~2021~~2022 due to the following factors:

Depreciation expense for the three months ended ~~September~~June 30, ~~2022~~2023 increased ~~$0.3~~$0.5 million from the same period in ~~2021~~2022 due to a higher level of utility plant in service.

Other taxes for the three months ended ~~September~~June 30, ~~2022~~2023 increased ~~$1.0~~$0.4 million from the same period in ~~2021~~2022 primarily due to higher revenue related taxes on increased revenues in our Middlesex system.

Other Income, net for the three months ended ~~September~~June 30, ~~2022~~2023 increased ~~$1.0~~$0.2 million from the same period in ~~2021~~2022 due primarily to ~~higher actuarially-determined retirement benefit plans non-service benefit and~~ higher Allowance for Funds Used During Construction ~~(AFUDC)~~ resulting from a higher level of capital projects in progress.

Interest charges for the three months ended ~~September~~June 30, ~~2022~~2023 increased ~~$0.3~~$0.9 million from the same period in ~~2021~~2022 due to higher average ~~long-term~~ debt outstanding and ~~higher~~an increase in average ~~interest rates in 2022 as compared to 2021.~~borrowing rates.

Income taxes for the three months ended ~~September~~June 30, ~~2022 increased~~2023 decreased by ~~$3.0~~$1.1 million from the same period in ~~2021,~~2022, primarily ~~due to higher pre-tax income and the expiration of~~associated with greater income tax benefits associated with ~~the adoption of Internal Revenue Service (“IRS”)~~increased repair expenditures on tangible property ~~regulations as~~in the Middlesex ~~was required by the NJBPU to account for the benefit of adopting these regulations over 48 months beginning in 2018.~~system and lower pre-tax income.

Net income for the three months ended ~~September~~June 30, ~~2022 increase $2.8~~2023 increased $1.0 million as compared with the same period in ~~2021.~~2022. Basic earnings per share were ~~$0.81~~$0.56 and ~~$0.65~~$0.50 for the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. Diluted earnings per share were ~~$0.80~~$0.55 and ~~$0.65~~$0.50 for the three months ended ~~September~~June 30, 2023 and 2022, ~~and 2021,~~ respectively.

Results of Operations – ~~Nine~~Six Months Ended ~~September~~June 30, ~~2022~~2023

Operating revenues for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 increased ~~$14.5~~$5.1 million from the same period in ~~2021~~2022 due to the following factors:

Operation and maintenance expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 increased ~~$3.7~~$2.8 million from the same period in ~~2021~~2022 due to the following factors:

Depreciation expense for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 increased ~~$1.6~~$0.9 million from the same period in ~~2021~~2022 due to a higher level of utility plant in service.

Other taxes for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 increased ~~$2.1~~$0.7 million from the same period in ~~2021~~2022 primarily due to higher revenue related taxes on increased revenues in our Middlesex system.

Middlesex recognized a $5.2 million gain on the sale of its regulated Delaware wastewater subsidiary in January 2022.

Other Income, net for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 increased ~~$1.1~~$0.2 million from the same period in ~~2021~~2022 primarily due to higher AFUDC resulting from a higher level of capital projects in progress offset by lower actuarially-determined retirement benefit plans non-service ~~benefit partially offset by lower AFUDC resulting from a reduced level of capital projects in progress.~~benefit.

Interest charges for the ~~nine~~six months ended ~~September~~June 30, 2023 increased $1.6 million from the same period in 2022 ~~increased~~due to higher average debt outstanding and an increase in average borrowing rates.

Income taxes for the six months ended June 30, 2023 decreased by $0.7 million from the same period in ~~2021 due to higher average long-term outstanding and higher average interest rates in~~ 2022, ~~as compared to 2021.~~

~~Income taxes for the nine months ended September 30, 2022 increased by $6.8 million from the same period in 2021,~~ primarily due to income taxes on the gain on the sale of a subsidiary, higher pre-tax operating income and the expiration of income tax benefits associated with the adoption of IRS tangible property regulations as Middlesex was required by the NJBPU to account for the benefit of adopting these regulations over 48 months beginning in 2018. Partially offsetting these increases were greater income tax benefits associated with increased repair expenditures on tangible property in the Middlesex ~~system.~~system and lower pretax income due to gain on the sale of a subsidiary in 2022.

Net income for the ~~nine~~six months ended ~~September~~June 30, ~~2022 increased $6.0~~2023 decreased $5.2 million as compared with the same period in ~~2021.~~2022. Basic earnings per share were ~~$2.00~~$0.89 and ~~$1.67~~$1.19 for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. Diluted earnings per share were ~~$1.99~~$0.88 and ~~$1.66~~$1.18 for the ~~nine~~six months ended ~~September~~June 30, 2023 and 2022, ~~and 2021,~~ respectively.

Cash flows from operations are largely based on four factors: weather, adequate and timely rate increases, effective cost management and customer growth. The effect of those factors on net income is discussed in “Results of Operations.”

For the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, cash flows from operating activities increased ~~$25.6~~$2.4 million to ~~$44.2~~$29.3 million. The increase in cash flows from operating activities primarily resulted from higher ~~operating revenues~~billings from ~~Middlesex’s~~the implementation of the final phase of the 2021 base rate case increase on January 1, ~~2022 rate increase and the timing of payments to vendors.~~2023.

For the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, cash flows used in investing activities increased ~~$1.6~~$14.4 million to ~~$62.8 million. The increase in cash flows used in investing activities resulted from~~$50.6 million due to increased utility plant expenditures ~~partially offset by~~in 2023 and cash received in January 2022 from the sale of Middlesex’s regulated wastewater ~~subsidiary in January 2022.~~subsidiary.

For further discussion on the Company’s future capital expenditures and expected funding sources, see “Capital Expenditures and Commitments” below.

For the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, cash flows from financing activities ~~decreased $19.5~~increased $11.8 million to ~~$18.0~~$21.9 million. The ~~decrease~~increase in cash flows provided by financing activities is due to ~~a reduction~~an increase in net short-term bank borrowings and lower net customer advances and contributions partially offset by increased proceeds from the issuance of common stock under the Middlesex Water Company Investment Plan (the Investment Plan).borrowings.

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 proceeds from sales offerings to the public of our common stock. See below for a more detailed discussion regarding the funding of our capital program.

The capital investment program for ~~2022~~2023 is currently estimated to be approximately ~~$85~~$101 million. Through ~~September~~June 30, ~~2022~~2023, we have expended ~~$65.9~~$50.6 million and expect to incur approximately ~~$19~~$50 million for capital projects for the remainder of ~~2022.~~2023.

We currently project that we may expend approximately ~~$145~~$166 million for capital projects in ~~2023~~2024 and ~~2024.~~2025. 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 and, could be impacted if new variants of the COVID-19 pandemic arise and continue for an extended period of time.~~costs.

To pay for our capital program for the remainder of ~~2022,~~2023, we plan on utilizing some or all of the following:

In March 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 will continue until 200,000 shares are purchased at the discounted price or December 1, 2023, whichever event occurs first.

In May 2023, Middlesex received approval from the NJBPU to increase the number of authorized shares under the Investment Plan by 0.7 million shares.

In order to fully fund the ongoing ~~large~~ investment program in our utility plant infrastructure and maintain a balanced capital structure consistent with regulators’ expectations for a regulated water utility, Middlesex may offer for sale additional shares of its common stock. The amount, the timing and the sales method of the common stock is dependent on the timing of the construction expenditures, the level of additional debt financing and financial market conditions. As approved by the NJBPU, the Company is authorized to issue and sell up to 1.0 million shares of its common stock in one or more transactions through December 31, 2025.

Recent Accounting Pronouncements – See Note 1 of the Notes to Unaudited Condensed Consolidated Financial Statements for a discussion of recent accounting pronouncements and guidance.

We are exposed to market risk associated with changes in interest rates and commodity prices. The Company is subject to the risk of fluctuating interest rates in the normal course of business. Our policy is to manage interest rates through the use of fixed rate long-term debt and, to a lesser extent, short-term debt. 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 2023 to 2059. Over the next twelve months, approximately ~~$7.6~~$17.5 million of the current portion of existing long-term debt instruments will mature. Applying a hypothetical change in the rate of interest charged by 10% on those borrowings, would not have a material effect on our earnings.

Our risks associated with price increases for chemicals, electricity and other commodities are reduced through contractual arrangements and the ability to recover price increases through rates charged to the Company’s regulated utility 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. Our primary credit risk is exposure to customer default on contractual obligations and the associated loss that may be incurred due to the non-payment of customer accounts receivable balances. Our credit risk is managed through established credit and collection policies which are in compliance with applicable regulatory requirements and involve monitoring of customer exposure and the use of credit risk mitigation measures such as letters of credit or prepayment arrangements. Our credit portfolio is diversified with no significant customer or industry concentrations. In addition, our Regulated businesses are generally able to recover all prudently incurred costs including uncollectible customer accounts receivable expenses and collection costs through customers’ rates.

The Company's retirement benefit plan assets are subject to fluctuating market prices of debt and equity securities. Changes to the Company's retirement benefit plan asset values can impact the Company's retirement benefit plan expense, funded status and future minimum funding requirements. Risk is mitigated by our ability to recover retirement benefit plan costs through rates for regulated utility services charged to our customers.

As required by Rule 13a-15 under the Securities and Exchange Act of 1934 (the Exchange Act), an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures was conducted by the Company’s Chief Executive Officer along with the Company’s Chief Financial Officer. Based upon that evaluation, the Company’s Chief Executive Officer and the Company’s Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective as of the end of the period covered by this Report. There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in Company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Company reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer as appropriate, to allow timely decisions regarding disclosure.

The following information updates and amends the information provided in the Company’s Annual Report on Form 10-K (the Form 10-K) for the year ended December 31, ~~2021~~2022 in Part I, Item 3—Legal Proceedings. Capitalized terms used but not otherwise defined herein have the meanings set forth in the Company’s Form 10-K.

Vera et al. v. Middlesex Water Company – On ~~April~~March 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 Company (3M) as a third-party defendant in this lawsuit. The Company has taken this action in addition to a separate lawsuit the Company initiated against 3M seeking to hold 3M accountable for introduction of perfluoroalkyl substances, which include PFOA, into the Company’s water supply at its Park Avenue Wellfield facility. On July 6, 2022, the Company filed a Motion to Remove this case from New Jersey Superior Court to2023, the United States District Court for the District of New ~~Jersey. Vera is currently challenging Middlesex’s Motion To Remove at the U.S. District Court for the District of New~~ Jersey inissued an ~~attempt to remand~~order remanding the case back to the Superior Court of New Jersey. Discovery is underway in this matter.

~~Lonsk et al. v. Middlesex Water Company and 3M Company~~ - On March 4, 2022, Middlesex filed a Motion to Dismiss Plaintiffs’ complaint. On April 15, 2022, Plaintiffs filed an Amended Complaint. 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. Motions To Dismiss and Answers to Plaintiffs’ Amended Complaint to be filed on rescheduling from the newly assigned judge.

The information about risk factors does not differ materially from those set forth in Part I, Item 1A. of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1618

Item 3.	Quantitative and Qualitative Disclosures of Market Risk	26

~~Item 4.Controls and Procedures~~	27

Item 4.	Controls and Procedures	28

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	2829

Item 1A.	Risk Factors	2829

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28

~~Item 3.Defaults upon Senior Securities~~	28

~~Item 4.Mine Safety Disclosures~~	28

~~Item 5.Other Information~~	28

~~Item 6.Exhibits~~	29

~~SIGNATURES~~Item 3.	Defaults upon Senior Securities	29

Item 4.	Mine Safety Disclosures	29

Item 5.	Other Information	29

Item 6.	Exhibits	30

SIGNATURES		31

	September 30,			December 31,
	2022			2021
Common Stock, No Par Value
Shares Authorized - 40,000
Shares Outstanding - 2022 - 17,638; 2021 - 17,522	$	232,423		$	221,919

Retained Earnings		165,652			145,807
TOTAL COMMON EQUITY	$	398,075		$	367,726

Cumulative Preferred Stock, No Par Value:
Shares Authorized - 120
Shares Outstanding - 20
Convertible:
Shares Outstanding, $7.00 Series - 10	$	1,005		$	1,005
Nonredeemable:
Shares Outstanding, $7.00 Series - 1		79			79
Shares Outstanding, $4.75 Series - 10		1,000			1,000
TOTAL PREFERRED STOCK	$	2,084		$	2,084

Long-term Debt:
First Mortgage Bonds, 0.00%-5.50%, due 2023-2059	$	252,269		$	203,892
Amortizing Secured Notes, 3.94%-7.05%, due 2028-2046		45,592			47,613
State Revolving Trust Notes, 2.00%-4.22%, due 2022-2041		9,551			7,510
Construction Loans, 0.00%		-			52,131
SUBTOTAL LONG-TERM DEBT		307,412			311,146
Add: Premium on Issuance of Long-term Debt		6,973			7,271
Less: Unamortized Debt Expense		(5,580	)		(5,166	)
Less: Current Portion of Long-term Debt		(7,567	)		(6,731	)
TOTAL LONG-TERM DEBT	$	301,238		$	306,520

	June 30,			December 31,
	2023			2022
Common Stock, No Par Value
Shares Authorized - 40,000
Shares Outstanding - 2023 - 17,729; 2022 - 17,642	$	239,545		$	233,054
Retained Earnings		171,932			167,274
TOTAL COMMON EQUITY	$	411,477		$	400,328

Cumulative Preferred Stock, No Par Value:
Shares Authorized - 120
Shares Outstanding - 20
Convertible:
Shares Outstanding, $7.00 Series - 10	$	1,005		$	1,005
Nonredeemable:
Shares Outstanding, $7.00 Series - 1		79			79
Shares Outstanding, $4.75 Series - 10		1,000			1,000
TOTAL PREFERRED STOCK	$	2,084		$	2,084

Long-term Debt:
First Mortgage Bonds, 0.00%-5.50%, due 2023-2059	$	291,496		$	252,269
Amortizing Secured Notes, 3.94%-7.05%, due 2028-2046		63,571			44,918
State Revolving Trust Notes, 2.00%-4.03%, due 2025-2044		11,645			9,200
SUBTOTAL LONG-TERM DEBT		366,712			306,387
Add: Premium on Issuance of Long-term Debt		6,675			6,873
Less: Unamortized Debt Expense		(5,481	)		(5,518	)
Less: Current Portion of Long-term Debt		(17,460	)		(17,462	)
TOTAL LONG-TERM DEBT	$	350,446		$	290,280

	(In Thousands)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
Operations by Segments:	2023			2022			2023			2022
Revenues:
Regulated	$	39,909		$	37,037		$	74,862		$	70,361
Non – Regulated		3,056			2,875			6,398			5,885
Inter-segment Elimination		(164	)		(229	)		(303	)		(367	)
Consolidated Revenues	$	42,801		$	39,683		$	80,957		$	75,879

Operating Income:
Regulated	$	9,820		$	9,336		$	16,535		$	21,043
Non – Regulated		849			752			1,622			1,569
Consolidated Operating Income	$	10,669		$	10,088		$	18,157		$	22,612

Net Income:
Regulated	$	9,307		$	8,314		$	14,631		$	19,814
Non – Regulated		594			554			1,136			1,154
Consolidated Net Income	$	9,901		$	8,868		$	15,767		$	20,968

Capital Expenditures:
Regulated	$	26,114		$	22,549		$	50,579		$	39,134
Non – Regulated		6			163			56			209
Total Capital Expenditures	$	26,120		$	22,712		$	50,635		$	39,343

	As of			As of
	June 30, 2023			December 31, 2022
Assets:
Regulated	$	1,126,436		$	1,079,180
Non – Regulated		7,677			6,999
Inter-segment Elimination		(6,527	)		(11,729	)
Consolidated Assets	$	1,127,586		$	1,074,450

	Three Months Ended September 30,					Nine Months Ended September 30,
	2022		2021			2022		2021

Operating Revenues	$	47,732	$	39,874		$	123,611	$	109,117

Operating Expenses:
Operations and Maintenance		20,312		18,950			59,007		55,265
Depreciation		5,814		5,504			17,107		15,523
Other Taxes		5,031		3,996			13,543		11,456

Total Operating Expenses		31,157		28,450			89,657		82,244
Gain on Sale of Subsidiary		-		-		5232		-

Operating Income		16,575		11,424			39,186		26,873

Other Income (Expense):
Allowance for Funds Used During Construction		627		344			1,553		2,376
Other Income (Expense), net		1,412		744			4,185		2,308

Total Other Income, net		2,039		1,088			5,738		4,684

Interest Charges		2,355		2,101			6,574		5,910

Income before Income Taxes		16,259		10,411			38,350		25,647

Income Taxes		1,968		(1,065	)		3,092		(3,658	)

Net Income		14,291		11,476			35,258		29,305

Preferred Stock Dividend Requirements		30		30			90		90

Earnings Applicable to Common Stock	$	14,261	$	11,446		$	35,168	$	29,215

Earnings per share of Common Stock:
Basic	$	0.81	$	0.65		$	2	$	1.67
Diluted	$	0.8	$	0.65		$	1.99	$	1.66

Average Number of Common Shares Outstanding:
Basic		17,628		17,491			17,583		17,485
Diluted		17,743		17,606			17,698		17,600

	Common		Common
	Stock		Stock		Retained
	Shares		Amount		Earnings			Total

For the Three Months Ended September 30, 2021
Balance at July 1, 2021		17,490	$	218,100	$	136,998		$	355,098
Net Income		-		-		11,476			11,476
Middlesex Water Company Invesment Plan		3		289		-			289
Restricted Stock Award - Net - Employees		-		273		-			273
Cash Dividends on Common Stock ($0.2725 per share)		-		-		(4,766	)		(4,766	)
Cash Dividends on Preferred Stock		-		-		(30	)		(30	)
Balance at September 30, 2021		17,493	$	218,662	$	143,678		$	362,340

For the Nine Months Ended September 30, 2021
Balance at January 1, 2021		17,473	$	217,451	$	128,757		$	346,208
Net Income		-		-		29,305			29,305
Middlesex Water Company Invesment Plan		11		885		-			885
Restricted Stock Award - Net - Employees		6		81		-			81
Restricted Stock Award - Board of Directors		3		245		-			245
Cash Dividends on Common Stock ($0.8175 per share)		-		-		(14,294	)		(14,294	)
Cash Dividends on Preferred Stock		-		-		(90	)		(90	)
Balance at September 30, 2021		17,493	$	218,662	$	143,678		$	362,340

For the Three Months Ended September 30, 2022
Balance at July 1, 2022		17,604	$	229,037	$	156,530		$	385,567
Net Income		-		-		14,291			14,291
Middlesex Water Company Invesment Plan		34		3,025		-			3,025
Restricted Stock Award - Net - Employees		-		361		-			361
Cash Dividends on Common Stock ($0.2900 per share)		-		-		(5,114	)		(5,114	)
Cash Dividends on Preferred Stock		-		-		(30	)		(30	)
Common Stock Expenses		-		-		(25	)		(25	)
Balance at September 30, 2022		17,638	$	232,423	$	165,652		$	398,075

For the Nine Months Ended September 30, 2022
Balance at January 1, 2022		17,522	$	221,919	$	145,807		$	367,726
Net Income		-		-		35,258			35,258
Middlesex Water Company Invesment Plan		110		10,064		-			10,064
Restricted Stock Award - Net - Employees		3		160		-			160
Restricted Stock Award - Board of Directors		3		280		-			280
Cash Dividends on Common Stock ($0.8700 per share)		-		-		(15,298	)		(15,298	)
Cash Dividends on Preferred Stock		-		-		(90	)		(90	)
Common Stock Expenses		-		-		(25	)		(25	)
Balance at September 30, 2022		17,638	$	232,423	$	165,652		$	398,075

	(Thousands of Dollars)
	September 30, 2022		December 31, 2021
	Carrying	Fair	Carrying	Fair
	Amount	Value	Amount	Value
FMBs	$147,269	$139,285	$98,828	$107,781

	(Millions)										(Millions)
	As of September 30, 2022							Renewal Date			As of June 30, 2023
	Outstanding		Available		Maximum		Credit Type			Outstanding				Available				Maximum				Credit Type		Renewal Date
Bank of America	$	7.0	$	53.0	$	60.0	Uncommitted	Renewal Date	January 26, 2023			$	5.0			$	55.0			$	60.0			Uncommitted		January 25, 2024
PNC Bank		30.5		37.5		68.0	Committed	January 31, 2024				18.5			$	49.5				68.0			Committed		July 31, 2025
CoBank		3.0		9.0		12.0	Committed	November 30, 2023				—				12.0				12.0			Committed		November 30, 2023
	$	40.5	$	99.5	$	140.0					$	23.5			$	116.5			$	140.0

	(In Millions)
	As of
	June 30, 2023			December 31, 2022
ROU Asset at Lease Inception	$	7.3		$	7.3
Accumulated Amortization		(3.8	)		(3.5	)
Current ROU Asset	$	3.5		$	3.8

	(In Thousands)												(In Thousands)
	Pension Benefits						Other Benefits						Pension Benefits						Other Benefits
	Three Months Ended September 30,												Three Months Ended June 30,
	2022			2021			2022			2021			2023			2022			2023			2022

Service Cost	$	591		$	674		$	200		$	229		$	388		$	591		$	98		$	200
Interest Cost		761			677			331			309			1,067			761			402			331
Expected Return on Assets		(1,760	)		(1,556	)		(887	)		(786	)		(1,466	)		(1,760	)		(771	)		(887	)
Amortization of Unrecognized Losses		418			717			-			132			164			418			(48	)		—
Net Periodic Benefit Cost (Benefit)*	$	10		$	512		$	(356	)	$	(116	)	$	153		$	10		$	(319	)	$	(356	)

Item 6.	Exhibits

10.26(e)	Amendment to Loan Documents, dated June 15, 2023, between the Company, Pinelands Wastewater Company, Pinelands Water Company, Tidewater Utilities, Inc., Utility Service Affiliates (Perth Amboy) Inc., Utility Service Affiliates Inc. and While Marsh Environmental Systems, Inc., and PNC Bank, N.A.

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


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


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


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

	MIDDLESEX WATER COMPANY

	By:	/s/A. Bruce O’Connor
		A. Bruce O’Connor
		Senior Vice President, Treasurer and
		Chief Financial Officer
		~~(Principal Accounting~~(Principal Financial Officer)