XML 32 R17.htm IDEA: XBRL DOCUMENT
v3.22.4

Employee Benefit Plans | 12 Months Ended
--- | ---
Dec. 31, 2022
Retirement Benefits [Abstract] |
Employee Benefit Plans | Note 7 - Employee Benefit Plans Pension Benefits The Company’s 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 can participate in a defined contribution profit sharing plan that provides an annual contribution at the discretion of the Company, based upon a percentage of the participants’ annual paid compensation. In order to be eligible for contribution, the eligible employee must be employed by the Company on December 31st of the year to which the contribution relates. The Company maintains an unfunded supplemental plan for a limited number of its executive officers. The Accumulated Benefit Obligation for the Company’s Pension Plan at December 31, 2022 and 2021 was $79.4 million and $100.4 million, respectively. Other Benefits The Company’s Other Benefits Plan covers substantially all of its current retired employees. Employees hired after March 31, 2007 are not eligible to participate in this plan. Coverage includes healthcare and life insurance. Regulatory Treatment of Over/Underfunded Retirement Obligations Because the Company is subject to rate regulation in the states in which it operates, it is required to maintain its accounts in accordance with the regulatory authority’s rules and guidelines, which may differ from other authoritative accounting pronouncements. In those instances, the Company follows the guidance of ASC 980, Regulated Operations. Based on prior regulatory practice, and in accordance with the guidance in ASC 980, Regulated Operations, the Company records underfunded Pension Plan and Other Benefits Plan obligation costs, which otherwise would be recognized in Other Comprehensive Income under ASC 715, Compensation – Retirement Benefits, as a Regulatory Asset, and expects to recover those costs in rates charged to customers. The Company uses a December 31 measurement date for all of its employee benefit plans. The tables below set forth information relating to the Company’s Pension Plan and Other Benefits Plan for 2022 and 2021.
|  | (Thousands of Dollars)
|  | Pension Plan |  | Other Benefits Plan
|  | December 31,
|  | 2022 |  | 2021 |  | 2022 |  | 2021
Change in Projected Benefit Obligation: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance |  | $ | 113,710 |  |  | $ | 115,861 |  |  | $ | 49,396 |  |  | $ | 52,776 |
Service Cost |  |  | 2,362 |  |  |  | 2,696 |  |  |  | 799 |  |  |  | 917 |
Interest Cost |  |  | 3,042 |  |  |  | 2,706 |  |  |  | 1,325 |  |  |  | 1,236 |
Actuarial (Gain) Loss |  |  | (27,850 | ) |  |  | (4,185 | ) |  |  | (17,761 | ) |  |  | (4,705 | )
Benefits Paid |  |  | (3,476 | ) |  |  | (3,368 | ) |  |  | (850 | ) |  |  | (828 | )
Ending Balance |  | $ | 87,788 |  |  | $ | 113,710 |  |  | $ | 32,909 |  |  | $ | 49,396 |
|  | (Thousands of Dollars)
|  | Pension Plan |  | Other Benefits Plan
|  | December 31,
|  | 2022 |  | 2021 |  | 2022 |  | 2021
Change in Fair Value of Plan Assets: |  |  |  |  |  |  |  |
Beginning Balance |  | $ | 100,750 |  |  | $ | 88,921 |  |  | $ | 50,668 |  |  | $ | 44,892 |
Actual Return on Plan Assets |  |  | (14,346 | ) |  |  | 11,798 |  |  |  | (6,639 | ) |  |  | 5,776 |
Employer Contributions |  |  | 1,900 |  |  |  | 3,400 |  |  |  | 850 |  |  |  | 828 |
Benefits Paid |  |  | (3,476 | ) |  |  | (3,369 | ) |  |  | (850 | ) |  |  | (828 | )
Ending Balance |  | $ | 84,828 |  |  | $ | 100,750 |  |  | $ | 44,029 |  |  | $ | 50,668 |
Funded Status |  | $ | (2,960 | ) |  | $ | (12,960 | ) |  | $ | 11,120 |  |  | $ | 1,272 |
|  | (Thousands of Dollars)
|  | Pension Plan |  | Other Benefits Plan
|  | December 31,
|  | 2022 |  | 2021 |  | 2022 |  | 2021
Amounts Recognized in the Consolidated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance Sheets consist of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current Liability |  | $ | 529 |  |  | $ | 398 |  |  | $ | — |  |  | $ | — |
Noncurrent Liability (Asset) |  |  | 2,431 |  |  |  | 12,562 |  |  |  | (11,120 | ) |  |  | (1,272 | )
Net Liability (Asset) Recognized |  | $ | 2,960 |  |  | $ | 12,960 |  |  | $ | (11,120 | ) |  | $ | (1,272 | )
|  | (Thousands of Dollars)
|  | Pension Plan |  | Other Benefits Plan
|  | Years Ended December 31,
|  | 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020
Components of Net Periodic Benefit Cost |  |  |  |  |  |  |  |  |  |  |  |
Service Cost |  | $ | 2,363 |  |  | $ | 2,696 |  |  | $ | 2,434 |  |  | $ | 799 |  |  | $ | 917 |  |  | $ | 993 |
Interest Cost |  |  | 3,042 |  |  |  | 2,706 |  |  |  | 3,099 |  |  |  | 1,325 |  |  |  | 1,236 |  |  |  | 1,699 |
Expected Return on Plan Assets |  |  | (7,041 | ) |  |  | (6,225 | ) |  |  | (5,635 | ) |  |  | (3,547 | ) |  |  | (3,142 | ) |  |  | (2,853 | )
Amortization of Net Actuarial Loss |  |  | 1,673 |  |  |  | 2,868 |  |  |  | 2,059 |  |  |  | — |  |  |  | 527 |  |  |  | 1,352 |
Net Periodic Benefit Cost* |  | $ | 37 |  |  | $ | 2,045 |  |  | $ | 1,957 |  |  | $ | (1,423 | ) |  | $ | (462 | ) |  | $ | 1,191 |
*Service cost is included in Operations and Maintenance expense on the consolidated statements of income; all other amounts are included in Other Income (Expense), net. Amounts that are expected to be amortized from Regulatory Assets into Net Periodic Benefit Cost in 2023 are as follows:
|  | (Thousands of Dollars)
|  | Pension Plan |  | Other Benefits Plan
Actuarial Loss (Gain) |  | $ | 658 |  |  | $ | (191 | )
The discount rate and compensation increase rate for determining our postretirement benefit plans’ benefit obligations and costs as of and for the years ended December 31, 2022, 2021 and 2020, respectively, are as follows:
|  | Pension Plan |  | Other Benefits Plan
|  | 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020
Weighted Average Assumptions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Expected Return on Plan Assets |  |  | 7.00 | % |  |  | 7.00 | % |  |  | 7.00 | % |  |  | 7.00 | % |  |  | 7.00 | % |  |  | 7.00 | %
Discount Rate for: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Benefit Obligation |  |  | 4.98 | % |  |  | 2.72 | % |  |  | 2.37 | % |  |  | 4.98 | % |  |  | 2.72 | % |  |  | 2.37 | %
Benefit Cost |  |  | 2.72 | % |  |  | 2.37 | % |  |  | 3.12 | % |  |  | 2.72 | % |  |  | 2.37 | % |  |  | 3.12 | %
Compensation Increase for: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Benefit Obligation |  |  | 3.00 | % |  |  | 3.00 | % |  |  | 3.00 | % |  |  | 3.00 | % |  |  | 3.00 | % |  |  | 3.00 | %
Benefit Cost |  |  | 3.00 | % |  |  | 3.00 | % |  |  | 3.00 | % |  |  | 3.00 | % |  |  | 3.00 | % |  |  | 3.00 | %
The compensation increase assumption for the Other Benefits Plan is attributable to life insurance provided to qualifying employees upon their retirement. The insurance coverage will be determined based on the employee’s base compensation as of their retirement date. The Company utilizes the Society of Actuaries’ mortality table (Pri-2012) (Mortality Improvement Scale MP2021 for the 2022 valuation). For the 2022 valuation, costs and obligations for our Other Benefits Plan assumed a 7.5% annual rate of increase in the per capita cost of covered healthcare benefits in 2022 with the annual rate of increase declining 0.5% per year for 2023-2028, resulting in an annual rate of increase in the per capita cost of covered healthcare benefits of 4.5% by year 2029. A one-percentage point change in assumed healthcare cost trend rates would have the following effects on the Other Benefits Plan:
|  | (Thousands of Dollars)
|  | 1 Percentage Point
|  | Increase |  | Decrease
Effect on Current Year Service and Interest Costs |  | $ | 435 |  |  | $ | (334 | )
Effect on Projected Benefit Obligation |  | $ | 4,239 |  |  | $ | (3,448 | )
The following benefit payments, which reflect expected future service, are expected to be paid:
|  | (Thousands of Dollars)
Year |  | Pension Plan |  | Other Benefits Plan
2023 |  | $ | 4,153 |  |  | $ | 1,262 |
2024 |  |  | 4,961 |  |  |  | 1,423 |
2025 |  |  | 5,349 |  |  |  | 1,550 |
2026 |  |  | 5,344 |  |  |  | 1,645 |
2027 |  |  | 5,437 |  |  |  | 1,699 |
2028-2032 |  |  | 28,483 |  |  |  | 9,363 |
Totals |  | $ | 53,727 |  |  | $ | 16,942 |
Benefit Plans Assets The allocation of plan assets at December 31, 2022 and 2021 by asset category is as follows:
|  | Pension Plan |  | Other Benefits Plan
Asset Category |  | 2022 |  | 2021 |  | Target |  | 2022 |  | 2021 |  | Target
Equity Securities |  |  | 53.6 | % |  |  | 59.6 | % |  |  | 55 | % |  |  | 55.2 | % |  |  | 66.8 | % |  |  | 43 | %
Debt Securities |  |  | 40.9 | % |  |  | 37.9 | % |  |  | 38 | % |  |  | 24.7 | % |  |  | 30.7 | % |  |  | 50 | %
Cash |  |  | 3.9 | % |  |  | 1.0 | % |  |  | 2 | % |  |  | 20.1 | % |  |  | 2.5 | % |  |  | 2 | %
Real Estate/Commodities |  |  | 1.6 | % |  |  | 1.5 | % |  |  | 5 | % |  |  | 0.0 | % |  |  | 0.0 | % |  |  | 5 | %
Total |  |  | 100.0 | % |  |  | 100.0 | % |  |  |  |  |  |  | 100.0 | % |  |  | 100.0 | % |  |  |  |
Two outside investment firms each manage a portion of the Pension Plan asset portfolio. One of those investment firms also manages the Other Benefits Plan asset portfolio. Quarterly meetings are held between the Company’s Pension Committee of the Board of Directors and the investment managers to review their performance and asset allocation. If the actual asset allocation is outside the targeted range, the Pension Committee reviews current market conditions and advice provided by the investment managers to determine the appropriateness of rebalancing the portfolio. The objective of the Company is to maximize the long-term return on retirement plan assets, relative to a reasonable level of risk, maintain a diversified investment portfolio and maintain compliance with the Employee Retirement Income Security Act of 1974. The expected long-term rate of return is based on the various asset categories in which plan assets are invested and the current expectations and historical performance for these categories. Fair Value Measurements Accounting guidance provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described as follows:
| ● | Level 1 – Inputs to the valuation methodology are unadjusted quoted market prices for identical assets or liabilities in accessible active markets.
| ● | Level 2 – Inputs to the valuation methodology that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. If the asset or liability has a specified contractual term, the Level 2 input must be observable for substantially the full term of the asset or liability.
| ● | Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
Certain investments in cash and cash equivalents, equity securities, and commodities are valued based on quoted market prices in active markets and are classified as Level 1 investments. Certain investments in cash and cash equivalents, equity securities and fixed income securities are valued using prices received from pricing vendors that utilize observable inputs and are therefore classified as Level 2 investments. The following tables present Middlesex’s Pension Plan assets measured and recorded at fair value within the fair value hierarchy:
|  | (Thousands of Dollars)
|  | As of December 31, 2022
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Mutual Funds |  | $ | 71,559 |  |  | $ | — |  |  | $ | — |  |  | $ | 71,559 |
Money Market Funds |  |  | 3,271 |  |  |  | — |  |  |  | — |  |  |  | 3,271 |
Common Equity Securities |  |  | 9,998 |  |  |  | — |  |  |  | — |  |  |  | 9,998 |
Total Investments |  | $ | 84,828 |  |  | $ | — |  |  | $ | — |  |  | $ | 84,828 |
|  | (Thousands of Dollars)
|  | As of December 31, 2021
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Mutual Funds |  | $ | 87,687 |  |  | $ | — |  |  | $ | — |  |  | $ | 87,687 |
Money Market Funds |  |  | 1,057 |  |  |  | — |  |  |  | — |  |  |  | 1,057 |
Common Equity Securities |  |  | 12,006 |  |  |  | — |  |  |  | — |  |  |  | 12,006 |
Total Investments |  | $ | 100,750 |  |  | $ | — |  |  | $ | — |  |  | $ | 100,750 |
The following tables present Middlesex’s Other Benefits Plan assets measured and recorded at fair value within the fair value hierarchy:
|  | (Thousands of Dollars)
|  | As of December 31, 2022
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Mutual Funds |  | $ | 23,660 |  |  | $ | — |  |  | $ | — |  |  | $ | 23,660 |
Money Market Funds |  |  | 8,623 |  |  |  | — |  |  |  | — |  |  |  | 8,623 |
Agency/US/State/Municipal Debt |  |  | — |  |  |  | 10,592 |  |  |  | — |  |  |  | 10,592 |
Other |  |  | 1,154 |  |  |  | — |  |  |  | — |  |  |  | 1,154 |
Total Investments |  | $ | 33,437 |  |  | $ | 10,592 |  |  | $ | — |  |  | $ | 44,029 |
|  | (Thousands of Dollars)
|  | As of December 31, 2021
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Mutual Funds |  | $ | 33,844 |  |  | $ | — |  |  | $ | — |  |  | $ | 33,844 |
Money Market Funds |  |  | 1,291 |  |  |  | — |  |  |  | — |  |  |  | 1,291 |
Agency/US/State/Municipal Debt |  |  | — |  |  |  | 15,533 |  |  |  | — |  |  |  | 15,533 |
Total Investments |  | $ | 35,135 |  |  | $ | 15,533 |  |  | $ | — |  |  | $ | 50,668 |
Benefit Plans Contributions For the Pension Plan, Middlesex made total cash contributions of $1.9 million in 2022 and expects to make approximately $2.0 million of cash contributions in 2023. For the Other Benefits Plan, Middlesex made total cash contributions of $0.9 million in 2022 and expects to make approximately $0.9 million of cash contributions in 2023. 401(k) Plan The Company maintains a 401(k) defined contribution plan, which covers substantially all employees with more than 1,000 hours of service. Under the terms of the Plan, the Company matches 100% of a participant’s contributions, which do not exceed 1% of a participant’s compensation, plus 50% of a participant’s contributions exceeding 1%, but not more than 6%. The Company’s matching contribution was $0.7 million for each of the years ended December 31, 2022, 2021 and 2020. Employees hired after March 31, 2007 are not eligible to participate in the Pension Plan and are generally eligible to participate in a discretionary profit sharing plan administered through the 401(k) plan. In December each year, the Board of Directors may approve that a stated percentage of eligible compensation be contributed to the account of the employee participant in the first quarter of the following year. For those employees still actively employed on December 31, 2022 or retired during the current year, the Company will fund a discretionary contribution of $0.9 million before April 1, 2023, which represents 5.0% of eligible 2022 compensation. For the years ended December 31, 2021 and 2020, the Company made qualifying discretionary contributions totaling $0.8 million and $0.7 million, respectively. Stock-Based Compensation The Company maintains a long-term incentive compensation plan for certain management employees where awards are made in the form of restricted common stock. Shares of restricted stock issued under the plan are subject to forfeiture by the employee in the event of termination of employment for any reason within five years of the award other than as a result of retirement at normal retirement age, death, disability or change in control. The maximum number of shares authorized for award under the plan is 300,000 shares, of which approximately 80% remain available for award. The Company recognizes compensation expense at fair value for the plan awards in accordance with ASC 718, Compensation – Stock Compensation. Compensation expense is determined by the market value of the stock on the date of the award and is being amortized over the expected vesting period. The following table presents awarded but not yet vested share information for the plan:
|  | Shares(thousands) |  |  | Unearned Compensation (thousands) |  |  | Weighted Average Granted Price |
Balance, January 1, 2020 |  |  | 97 |  |  |  | 1,706 |  |  |  |  |
Granted |  |  | 16 |  |  |  | 982 |  |  | $ | 60.12 |
Vested |  |  | (27 | ) |  |  | — |  |  |  |  |
Amortization of Compensation expense |  |  | — |  |  |  | (851 | ) |  |  |  |
Balance, December 31, 2020 |  |  | 86 |  |  |  | 1,837 |  |  |  |  |
Granted |  |  | 15 |  |  |  | 1,151 |  |  | $ | 79.02 |
Vested |  |  | (18 | ) |  |  |  |  |  |  |  |
Amortization of Compensation expense |  |  | — |  |  |  | (1,057 | ) |  |  |  |
Balance, December 31, 2021 |  |  | 83 |  |  |  | 1,931 |  |  |  |  |
Granted |  |  | 11 |  |  |  | 1,151 |  |  | $ | 105.17 |
Vested |  |  | (17 | ) |  |  | — |  |  |  |  |
Amortization of Compensation expense |  |  | — |  |  |  | (1,350 | ) |  |  |  |
Balance, December 31, 2022 |  |  | 77 |  |  | $ | 1,732 |  |  |  |  |

X
- References No definition available. + Details
Name: | us-gaap_CompensationAndRetirementDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for retirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 55 -Paragraph 17 -URI https://asc.fasb.org/extlink&oid=123450688&loc=d3e4179-114921 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section S99 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=21916913&loc=d3e273930-122802 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(i) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (o) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (p) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 70 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=49170846&loc=d3e28014-114942 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI https://asc.fasb.org/topic&trid=2235017 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 60 -Section 50 -Paragraph 3 -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=6414203&loc=d3e39689-114964 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(iv)(03) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (q) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (r)(1) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(iii) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (l) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (r)(2) -URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration