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COMMITMENTS AND CONTINGENCIES | 12 Months Ended
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Dec. 31, 2024
COMMITMENTS AND CONTINGENCIES [Abstract] |
COMMITMENTS AND CONTINGENCIES | NOTE 11 – COMMITMENTS AND CONTINGENCIE S Leases The Company’s leases are disclosed in Note 3 – Leases. Easements During 2003, Artesian Water Pennsylvania entered into a 40-year easement agreement to acquire an easement to access, operate, maintain, repair, improve, replace and connect Artesian’s water system to a well, including a parcel of land around the well. Management made certain estimates and assumptions regarding the separation of lease and non-lease components related to this easement agreement. It was determined that the majority of this easement agreement contained non-lease components. In October 2024, this easement agreement was terminated in its entirety. Easement payments, including both lease and non-lease components, for 2024, 2023 and 2022 were $34,000, $45,000 and $43,000, respectively. Artesian Wastewater entered into a perpetual agreement for the use of approximately 460 acres of land in Sussex County, Delaware for wastewater disposal. Beginning November 2016, Artesian Wastewater was required to pay a minimum of $40,000 per year for the use of this land. Once operations began in 2021, the monthly fee is based on the volume of wastewater disposed on the properties charged at a rate per one thousand gallons of wastewater, providing for a minimum monthly payment. Payments for 2024, 2023 and 2022 were $119,000, $126,000, $113,000, respectively. The agreement can be terminated by giving 180-day notice prior to the termination date. The future minimum annual payment related to this easement agreement for the years subsequent to 2024 is $22,000. Interconnections Artesian Water has one water service interconnection agreement with a neighboring utility, Chester Water Authority. The agreement is effective from January 1, 2022 through December 31, 2026, includes automatic five-year renewal terms, unless terminated by either party, and has a “take or pay” clause which currently requires us to purchase a minimum of 0.5 million gallons of water per day. Rates charged under this agreement are subject to change with notice. Artesian Water Maryland has one interconnection agreement with the Town of North East that has a “take or pay” clause requiring us to purchase a minimum of 35,000 gallons of water per day. The agreement extends through June 2029. The agreement includes one remaining automatic five-year renewal term, unless terminated by either party. The minimum annual purchase commitments for all interconnection agreements for 2025 through 2029, calculated at the noticed rates, are as follows:
In thousands |  |  |
2025 |  | $ | 928 |
2026 |  |  | 943 |
2027 |  |  | 57 |
2028 |  |  | 57 |
2029 |  |  | 57 |
|  | $ | 2,042 |
Expenses for purchased water were $1.5 million, $1.3 million and $1.8 million for 2024, 2023 and 2022, respectively. Other Commitments In April 2021, Artesian Water entered into a 3-year agreement with Worldwide Industries Corporation effective July 1, 2021 to paint elevated water storage tanks. Pursuant to the agreement, the total expenditure for the three years was $1.2 million. In September 2022, this agreement was amended to paint an additional elevated water storage tank and to extend the term of the agreement for an additional year. Pursuant to the amended agreement, the total expenditure for the four years is $2.2 million. Tank painting expense for 2024, 2023 and 2022 was $735,000, $689,000, and $531,000, respectively. Budgeted mandatory utility plant expenditures, due to planned governmental highway projects, which require the relocation of Artesian Water’s water service mains, expected to be incurred in 2025 through 2027 are as follows:
In thousands |  |  |
2025 |  | $ | 4,050 |
2026 |  |  | 13,715 |
2027 |  |  | 2,400 |
|  | $ | 20,165 |
The exact timing and extent of these relocation projects is controlled primarily by the Delaware Department of Transportation.

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