Artesian Resources Corporation reported lower earnings in 2023 with the company seeing higher expenses that are now being offset by a temporary rate increase.
The Newark area water company reported net income of $16.7 million, a $1.3 million, or 7.2%, decrease compared to 2022.
Artesian operates in all three Delaware counties and in Cecil County, MD.
Revenues totaled $98.9 million for both the year ended Dec. 31, 2023 and Dec. 31, 2022, respectively:
Water sales revenue increased $1.7 million, or 2.2%, primarily related to a temporary net rate increase of
7.5% of gross water sales placed into effect on November 28, 2023, as permitted under Delaware law, until
permanent rates are determined by the Delaware Public Service Commission, and an increase in
overall water consumption.
In addition, fixed fee revenue increased as a result of additional customers. Other utility operating revenue increased approximately $0.7 million, or 6%. This increase is primarily due to an increase in wastewater revenue associated with customer growth and an increase in fee revenue related to inspection, service and finance charges.
Non-utility operating revenue decreased approximately $2.4 million, or 26.9%. This decrease is primarily
due to a decrease in contract service revenue related to a contract for the design and construction of
wastewater infrastructure now nearing completion, partially offset by an increase in Service Line Protection
Plan, revenue.
Operating expenses, excluding depreciation and amortization and income taxes, increased $0.2 million, or 0.4%.
Utility operating expenses increased $2.4 million, or 5.6%, primarily due to increases in employee
benefits and payroll costs, computer system maintenance costs, and supply and treatment costs for water
and wastewater systems. These increases are partially offset by decreased purchased water under a new
contract.
Non-utility operating expenses decreased $2.4 million, or 35.4%, primarily due to a decrease in costs
associated with a wastewater infrastructure design and construction contract.
“In April 2023 we filed a request for an increase in water rates in our Delaware operations. We requested a $16.7 million increase in annual revenue, which is necessary to recover increased operating costs and significant
investments made to ensure water quality and resiliency, including upgrades of our treatment equipment and
facilities, new elevated water storage, replacement of aging water mains, and investments in information
technology. We began charging temporary rates on November 28, 2023, as permitted by the Delaware Public
Service Commission, while the full request is under examination. We are now beginning to see recovery of some
of these investments and increased expenses,” said Dian C. Taylor, CEO.
Net income was $3.5 million in the fourth quarter, a $1.2 million, or 49.7%, increase compared to net income recorded during the three months ended December 31, 2022. Revenues totaled $24.5 million, a decrease of $0.6 million, or 2.3%, compared to revenues recorded for the same period in 2022.
A total of $62.2 million was invested in water and wastewater infrastructure projects during 2023 compared to $48.5 million for the same period in 2022. The spending included rehabilitation program for transmission and distribution facilities by replacing
aging or deteriorating mains, installation of new mains, enhancing or improving existing treatment facilities,
construction of new water storage tanks, and replacing aging wells and pumping equipment.
“In 2023 we invested over $62 million in capital improvements. These investments in utility plant not only ensure that we provide high quality and reliable water and wastewater services to our customers, but allow us to meet growth demands in our expanding franchise area. Additionally, we continue to make investments proactively to treat for PFAS in drinking water in anticipation of the EPA’s release of a more stringent regulation, staying ahead
of the upcoming equipment supply needs of other utilities,” said Nicki Taylor, president of Artesian Water
Company.
