Artesian Resources Corporation announced that net income for the first quarter was $3.5 million, a 12.7 percent, increase compared to net income recorded during the first quarter of 2017.
Artesian is based in the Newark-Christiana area.
Revenues for the first quarter of 2018 were $18.9 million, a 1.5 percent decrease from the $19.2 million recorded for the same three-month period of 2017.
Water sales revenue decreased $300,000 or 1.7 percent, for the first quarter of 2018, primarily due to amounts being held in reserve pending the final determination by the Delaware Public Service Commission of the potential rate relief due to customers as a result of the 2017 Tax Cuts and Jobs Act. Artesian received a tax cut from the bill and pressure has grown to return that windfall to customers.
This decrease is partially offset by an increase in overall customer water consumption and an increase in the number of customers served.
Excluding depreciation and income taxes, operating expenses increased $0.2 million, or 2.3 percent, for the three months ended March 31, compared to the same period in 2017. The increase is primarily related to an increase in payroll and employee compensation costs, which was partially the result of a greater number of main break repairs that occurred during cold weather experienced early this year.
“The extremely cold weather this past winter was challenging, but our outstanding crews braved the conditions around the clock repairing a record 62 main breaks over a five-week period, restoring service as quickly as possible to our customers,” said Dian C. Taylor, CEO.
Other developments:
- On March 29, 2018, Artesian acquired the water utility assets of the Slaughter Beach Water Company, which is located along the Delaware Bay in Sussex County and serves 265 customers.
- In January 2018, Artesian signed an interconnection agreement with the town of North East, Maryland, which is located in the center of Cecil County’s designated growth corridor. The agreement allows the town’s excess available water capacity to be available as a backup supply for our current and future customers in areas adjacent to the town.
- Artesian is nearing completion of an 8.5-mile wastewater transmission main from Harbeson, Delaware to its Northern Sussex Regional Water Recycling Facility and has begun construction of a 90 million gallon storage lagoon at the facility necessary to accept approximately 1.25 million gallons a day of process wastewater from Allen Harim Foods LLC. Once in service, the current stream discharge of the wastewater by Allen-Harim.
Artesian Resources Corporation operates as a holding company of wholly-owned subsidiaries offering water and wastewater services, and related services, on the Delmarva Peninsula. Artesian Water Company, the principal subsidiary, is the oldest and largest regulated water utility on the Delmarva Peninsula. Artesian supplies 7.9 billion gallons of water a year through 1,293 miles of water main to nearly a third of Delaware residents.
Artesian derives most of its water from wells and has higher rates than municipal utilities that do not pay taxes, and the New Castle County operations of Suez, which mainly uses less expensive surface water. Tidewater Utilities, which serves central and southern Delaware, has rates that are comparable to those of Artesian.
Rates are regulated in Delaware by the Public Service Commission, which sets rates based on a maximum rate of return on investment. If not returned to customers, the tax break would amount to a windfall for the company.
