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REGULATORY ASSETS | 9 Months Ended
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Sep. 30, 2025
REGULATORY ASSETS [Abstract] |
REGULATORY ASSETS | NOTE 11 - REGULATORY ASSETS The ASC 980, Regulated Operations, stipulates generally accepted accounting principles for companies whose rates are established or subject to approvals by a third-party regulatory agency. Certain expenses are recoverable through rates charged to our customers, without a return on investment, and are deferred and amortized during future periods using various methods as permitted by the DEPSC, MDPSC, and PAPUC. The deferred income taxes will be amortized over future years as the tax effects of temporary differences that previously flowed through to our customers are reversed. Debt related costs include debt issuance costs and other debt related expense. The DEPSC has approved deferred regulatory accounting treatment for issuance costs associated with Artesian Water’s First Mortgage bonds. Debt issuance costs and other debt related expenses are reviewed during Artesian Water’s rate applications as part of its cost of capital calculations. Affiliated interest agreement deferred costs relate to the regulatory and administrative costs resulting from efforts necessary to secure water allocations in Artesian Water Pennsylvania’s territory for the provision of service to the surrounding area and interconnection to Artesian Water Pennsylvania’s affiliate regulated water utility Artesian Water. These costs were specifically included for cost recovery pursuant to an Affiliated Interest Agreement between Artesian Water and Artesian Water Pennsylvania and were approved for recovery by the PAPUC. Amortization of these deferred costs began in the fourth quarter of 2023. Deferred acquisition adjustments represent the excess payment for purchases of utility plant from Delaware municipalities over the determined original cost net of depreciation. Deferred acquisition costs represent the closing cost associated with the acquisitions. Costs of $3.7 million were reclassified from net utility plant and $0.1 million were reclassified from contributions in aid of construction, which are being amortized over the periods noted in the table below and recovered in customer rates effective June 12, 2024 as part of the DEPSC approved settlement agreement for the Artesian Water rate application filed on April 28, 2023. Unrecovered reserve for depreciation of $4.3 million was the result of the implementation of a change in depreciation methods for certain general plant assets that are being amortized over five years and recovered in customer rates effective June 12, 2024 as part of the DEPSC approved settlement agreement for the Artesian Water rate application filed on April 28, 2023. Amortization of these deferred costs began in the third quarter of 2024. Regulatory expenses amortized on a straight-line basis are noted below:
Expense | Years Amortized
Deferred contract costs and other | 5
Rate case studies | 5
Delaware rate proceedings | 3
Debt related costs | 15 to 30 (based on term of related debt)
Deferred costs affiliated interest agreement | 20
Goodwill (Mountain Hill Water Company acquisition in 2008) | 50
Deferred acquisition and franchise costs - Maryland | 20 – 80
Deferred acquisition costs – Delaware | 20
Deferred acquisition adjustments - Delaware | 36 – 62
Unrecovered reserve for depreciation (general plant assets) | 5
Regulatory assets, net of amortization, comprise:
| (in thousands)
|  | September 30, 2025 |  |  | December 31, 2024 |
Deferred contract costs and other | $ | 165 |  | $ | 271 |
Rate case studies |  | 114 |  |  | 141 |
Delaware rate proceedings |  | 342 |  |  | 474 |
Deferred income taxes |  | 408 |  |  | 423 |
Debt related costs |  | 3,705 |  |  | 3,969 |
Deferred costs affiliated interest agreement |  | 1,012 |  |  | 1,054 |
Goodwill |  | 245 |  |  | 251 |
Deferred acquisition and franchise costs - Maryland |  | 361 |  |  | 389 |
Deferred acquisition costs – Delaware |  | 222 |  |  | 231 |
Deferred acquisition adjustments – Delaware |  | 3,306 |  |  | 3,359 |
Unrecovered reserve for depreciation |  | 3,222 |  |  | 3,866 |
| $ | 13,102 |  | $ | 14,428 |

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- Definition The entire disclosure for detailed information about regulatory assets and liabilities, including current and noncurrent assets created when regulatory agencies permit the deferral of costs to the balance sheet that would otherwise be required to appear on the company's income statement and would be charged against current expenses or revenues, as well as current and noncurrent liabilities created when regulatory agencies permit. + References No definition available. + Details
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