What changed in this filing

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Item 1. Business

2025-03-26 compared with 2024-03-18 · 102 added, 104 removed, 269 unchanged (43% of the section changed)

General Information

Artesian Resources Corporation, or Artesian Resources, is a Delaware corporation incorporated in 1927, that is the holding company of eight wholly-owned

Artesian Resources Corporation, or Artesian Resources, is a Delaware corporation incorporated in 1927, that is the holding company of seven wholly-owned

subsidiaries offering water, wastewater and other services in Delaware, Maryland and Pennsylvania.

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Artesian Water Company, Inc., or Artesian Water, Artesian Water Pennsylvania,

Inc., or Artesian Water Pennsylvania, Artesian Water Maryland, Inc., or Artesian Water Maryland, Artesian Wastewater Management, Inc., or Artesian Wastewater, and Artesian Wastewater Maryland, Inc., or Artesian Wastewater Maryland;

non-utility subsidiaries:

Artesian Utility Development, Inc., or Artesian Utility, Artesian Development Corporation, or Artesian Development, and Artesian Storm Water Services, Inc., or Artesian Storm Water.

Effective January 14, 2022, Artesian

Wastewater is the holding company of Tidewater Environmental Services, Inc.

dba Artesian Wastewater, or TESI, a regulated public utility.

The terms “we,” “our,” “Artesian,” and the “Company” as used herein refer to Artesian Resources and its

subsidiaries.

Inc., or Artesian Water Pennsylvania, Artesian Water Maryland, Inc., or Artesian Water Maryland, Artesian Wastewater Maryland, Inc., or Artesian Wastewater Maryland, and Artesian Wastewater Management, Inc., or Artesian Wastewater, along with its

wholly-owned subsidiary Tidewater Environmental Services, Inc.

dba Artesian Wastewater, or TESI;

and two non-utility subsidiaries:

Artesian Utility Development, Inc., or Artesian Utility, and Artesian Development Corporation, or Artesian Development.

The terms “we,” “our,” “Artesian,” and the “Company” as used herein refer to Artesian Resources and its subsidiaries.

The business activity conducted by each of our subsidiaries is discussed below under separate headings.

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southern New Castle County, Delaware.

We hold CPCNs for approximately 59 square miles of wastewater service territory located in Sussex County, Delaware, of which approximately 23 square miles was added in January 2022 upon the closing of the

acquisition of TESI.

A significant portion of our exclusive service territory is in Sussex County, Delaware and remains undeveloped, and if and when development occurs and there is population growth in these areas, we anticipate we will increase our

customer base by providing water and/or wastewater service to the newly developed areas and new customers.

We hold CPCNs for approximately 61 square miles of wastewater service territory located in Sussex County, Delaware.

A significant portion of our exclusive service territory is in Sussex County, Delaware and

remains undeveloped, and if and when development occurs and there is population growth in these areas, we anticipate we will increase our customer base by providing water and/or wastewater service to the newly developed areas and new customers.

Artesian Water

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throughout the State of Delaware.

In addition, Artesian Water provides services to other water utilities, including operations and billing functions, and has contract operation agreements with private, municipal and state water providers.

Water also provides water for public and private fire protection to customers in our service territories.

In addition, Artesian Water provides services to other water utilities, including operations, and has contract operation agreements with private, municipal and state water providers.

Artesian Water also provides

water for public and private fire protection to customers in our service territories.

Artesian Water produced approximately 81.6% of our 2024 consolidated operating revenues.

In May 2022, Artesian Water completed its purchase of substantially all of the water operating assets from the Town of Clayton, or Clayton, a Delaware municipality located in Kent County, Delaware.

This purchase agreement is

discussed further in the “Strategic Direction and Recent Developments” section.

We derive about 90% of our self-supplied groundwater from wells that pump groundwater from aquifers and other formations located in the Atlantic Coastal

This purchase agreement is discussed

further in the “Strategic Direction and Recent Developments” section.

We derive about 92% of our self-supplied groundwater from wells that pump groundwater from aquifers and other formations located in the Atlantic

Coastal Plain.

The remaining 8% of our groundwater supply comes from wells in the Piedmont Province.

We use a variety of treatment methods, including aeration, pH adjustment, chlorination, fluoridation, ultra violet oxidation, arsenic removal, nitrate

removal, radium removal, iron removal, and carbon adsorption to meet federal, state and local water quality standards.

We use a variety of treatment methods, including aeration, pH adjustment, chlorination, fluoridation, ultra violet oxidation, arsenic removal,

nitrate removal, radium removal, iron removal, and carbon adsorption to meet federal, state and local water quality standards.

Additionally, a corrosion inhibitor is added to our self-supplied groundwater and to supply from interconnections.

different water treatment facilities in our Delaware systems.

have 62 different water treatment facilities in our Delaware systems.

All water supplies that we purchase from neighboring utilities are potable.

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Most of our New Castle County, Delaware water system is interconnected.

In the remainder of the State of Delaware, we have several satellite systems that

have not yet been connected by transmission and distribution facilities.

We intend to join these systems into larger integrated regional systems through the construction of a transmission and distribution network as development continues and our

expansion efforts provide us with contiguous exclusive service territories.

In the remainder of the State of Delaware, we have several satellite systems

that have not yet been connected by transmission and distribution facilities.

We intend to join these systems into larger integrated regional systems through the construction of a transmission and distribution network as development continues and

our expansion efforts provide us with contiguous exclusive service territories.

In Delaware, we have 24 interconnections with three neighboring water utilities

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An interconnection agreement with Chester Water Authority, which 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 required us to purchase water on a step-down schedule through July 5, 2022 and now requires us to purchase a minimum of 0.5 mgd.

Artesian’s capital investments in

self-sufficiency of water supply facilitated a reduction in the minimum amount of water required to be purchased under the current contract compared to previous contracted requirements.

The reduced purchased water minimum requirement has lowered

purchased water utility operating costs.

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.

Artesian’s capital investments in self-sufficiency of water supply

facilitated a reduction in the minimum amount of water required to be purchased under the current contract compared to previous contracted requirements.

As of December 31, 2024, we were serving customers through approximately 1,491 miles of transmission and distribution mains.

Mains range in diameter from

two inches to twenty-four inches, and most of the mains are made of ductile iron or cast iron.

Mains range in diameter

from two inches to twenty-four inches, and most of the mains are made of ductile iron or cast iron.

We have 36 storage tanks in Delaware, most of which are elevated, providing total system storage of approximately 45.0 million gallons.

We have developed and

are using an Aquifer Storage and Recovery, or ASR, system in New Castle County, Delaware.

Our ASR system provides approximately 130.0 million gallons of storage capacity, which can be withdrawn at an average rate of approximately 1.0 mgd.

locations, we rely on hydro-pneumatic tanks to maintain adequate system pressures.

developed and are using an Aquifer Storage and Recovery, or ASR, system in New Castle County, Delaware.

Our ASR system provides approximately 130.0 million gallons of storage capacity, which can be withdrawn at an average rate of approximately 1.0

At some locations, we rely on hydro-pneumatic tanks to maintain adequate system pressures.

Where possible, we combine our smaller satellite systems with systems having elevated storage facilities.

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wastewater collection and treatment infrastructure and provides wastewater services to customers in Delaware as a regulated public wastewater service company.

Artesian Wastewater owns and operates three wastewater treatment facilities, which, combined, are permitted to treat and/or dispose of approximately 2.3

Artesian Wastewater and Sussex County, a political subdivision of Delaware, provide reciprocal services to address the need of each for additional wastewater treatment and disposal capacity in certain service areas within Sussex County.

Wastewater also owns and operates a disposal facility that includes a 90-million gallon storage lagoon and spray irrigation to agricultural land.

This facility provides treated process wastewater disposal services for an industrial customer at a rate

up to 1.5 mgd.

We began operating this facility in June 2021.

In January 2022, Artesian Wastewater acquired Tidewater Environmental Services, Inc.

Artesian Wastewater operates as the parent holding company of Tidewater

Environmental Services, Inc.

dba Artesian Wastewater, or TESI.

TESI was incorporated in 2004 and is a regulated entity that owns wastewater collection and treatment infrastructure and provides wastewater services to customers in Sussex County,

Delaware as a regulated public wastewater service company.

Artesian Wastewater purchased all of the stock of TESI from Middlesex Water Company, or Middlesex, for $6.4 million in cash and other consideration, including forgiveness of a $2.1 million

note due from Middlesex.

This acquisition more than doubled the number of wastewater customers served by Artesian’s Delaware wastewater subsidiaries in Sussex County, Delaware and included all residents within the Town of Milton, Delaware.

TESI owns and operates seven wastewater treatment facilities, which, combined, are permitted to treat and/or dispose of approximately 713,000 gallons per

Artesian Wastewater owns and operates four wastewater treatment facilities, which, combined, are permitted to treat

and/or dispose of approximately 2.3 mgd.

areas within Sussex County.

Artesian Wastewater also owns and operates a disposal facility that includes a 90-million-gallon storage lagoon and spray irrigation to agricultural land.

This facility provides treated process wastewater disposal services

for an industrial customer at a rate up to 1.5 mgd.

Artesian Wastewater operates as the parent holding company of TESI.

TESI was incorporated in 2004 and is a regulated entity that owns wastewater

collection and treatment infrastructure and provides wastewater services to customers in Sussex County, Delaware, including all residents within the Town of Milton, as a regulated public wastewater service company.

TESI owns and operates five wastewater treatment facilities, which, combined, are permitted to treat and/or dispose

of approximately 35.2 mgd.

Artesian Wastewater Maryland

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Artesian Utility also offers three protection plans to customers, the Water Service Line Protection Plan, or WSLP Plan, the Sewer Service Line Protection

Plan, or SSLP Plan, and the Internal Service Line Protection Plan, or ISLP Plan (collectively, SLP Plans).

The WSLP Plan covers all parts, material and labor required to repair or replace participating customers' leaking water service lines up to an

annual limit.

Plan, or SSLP Plan, and the Internal Service Line Protection Plan, or ISLP Plan (collectively, SLP Plan or SLP Plans).

The WSLP Plan covers all parts, material and labor required to repair or replace participating customers' leaking water service

lines up to an annual limit.

The SSLP Plan covers all parts, material and labor required to repair or replace participating customers' leaking or clogged sewer lines up to an annual limit.

The ISLP Plan enhances available coverage to include water and wastewater

lines within customers' residences up to an annual limit.

The ISLP Plan enhances available coverage to include water

and wastewater lines within customers' residences up to an annual limit.

Artesian Development

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wastewater facility, as well as property for current operations, including an office facility in Sussex County, Delaware.

The office facility consists of approximately 10,000 square feet of office space along with approximately 7,000 square feet of

warehouse space.

Artesian Storm Water

Artesian Storm Water, incorporated in 2017, was formed to provide design, installation, maintenance and repair services related to existing or proposed

storm water management systems in Delaware and the surrounding areas.

In May 2023, the Board of Directors of Artesian Storm Water unanimously approved its dissolution.

Also, in May 2023, the Board of Directors of Artesian Resources Corporation, the

sole shareholder of Artesian Storm Water, unanimously approved the dissolution of Artesian Storm Water.

The Company filed a Certificate of Dissolution with the Delaware Secretary of State, which became effective on June 20, 2023.

The office facility consists of approximately 10,000 square feet of office space along with nearly 7,000 square feet of warehouse

Government Regulations

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Even though our water utility was founded in 1905, the majority of our investment in infrastructure occurred in the last 40 years.

As required by the Safe Drinking Water Act, the EPA has established maximum contaminant levels for various substances found in drinking water to ensure that

the water is safe for human consumption.

These limits are known as Maximum Contaminant Levels and Maximum Residual Disinfection Levels.

The EPA also regulates how often public water systems monitor their water for contaminants and report the

monitoring results to the individual state agencies or the EPA.

Generally, the larger the population served by a water system, the more frequent the monitoring and reporting requirements.

The Safe Drinking Water Act applies to all 50 states.

has recently proposed regulatory actions addressing per- and polyfluoroalkyl substances, or PFAS, including rules to confront PFAS contamination nationwide, with potentially significant implications.

The EPA issued a proposal to designate two of the

most widely used PFAS as hazardous substances.

The EPA has also declared drinking water health advisory levels for PFAS.

The Lead and Copper Rule, or LCR, is a United States federal regulation that limits the concentration of lead and

copper allowed in public drinking water at the consumer's tap, in addition to limiting the permissible amount of pipe corrosion occurring due to the water itself.

The EPA first issued the rule in 1991 pursuant to the Safe Drinking Water Act.

promulgated the regulations following studies that concluded that copper and lead adversely affect an individual’s physical and mental health.

The LCR therefore sought to limit the levels of these metals in water by improving water treatment centers,

determining copper and lead levels for customers who use lead plumbing parts, and eliminating the water source as a source of lead and copper.

If the lead and copper levels exceed the "action levels," water suppliers are required to educate their

consumers on how to reduce exposure to lead.

The EPA published a revision to the LCR in 2021, with a compliance deadline of October 2024 for developing an inventory of lead service lines within a utility’s water system.

These revised requirements

provide greater and more effective protection of public health by reducing exposure to lead and copper in drinking water.

Implementation of the revised rule will identify locations of lead, improve the reliability of lead tap sampling results,

strengthen corrosion control treatment requirements, expand consumer awareness and improve risk communication.

In addition, implementation of the revised rule will accelerate lead service line replacements by implementing timelines and strengthening

replacement requirements.

We are fully compliant with the current LCR and on schedule to be in compliance with the revised LCR ahead of the October 2024 compliance date.

As required by the Safe Drinking Water Act, the EPA establishes maximum contaminant levels, or MCLs, for various substances found in drinking water to ensure

that the water is safe for human consumption.

On April 10, 2024, the EPA established MCLs for certain per- and polyfluoroalkyl substances, or PFAS, in drinking water.

Under these regulations, water utilities will be required to complete initial

monitoring for PFAS by 2027 and to conduct ongoing compliance monitoring.

Water utilities also will be required to meet the new MCLs by April 2029 and to notify the public of any violations of the MCLs as of and after that date.

The Company has

installed treatment for PFAS at several wellfields to date and has included installation of treatment at additional locations in 2025 in its capital budget, with any remaining necessary treatment planned to be installed before 2029.

investment and operating costs for treatment of PFAS are anticipated to be recoverable in water rates charged to customers as approved by the applicable public service commission.

The Company is participating in the multi-district litigation class

action settlements with certain manufacturers of PFAS seeking reimbursement of costs incurred and that will continue to be incurred.

See Note 16 – Legal Proceedings.

The Lead and Copper Rule, or LCR, is a federal regulation that limits the concentration of lead and copper allowed in public drinking water at the consumer's

tap, in addition to limiting the permissible amount of pipe corrosion occurring due to the water itself.

The LCR limits the levels of lead and copper in water by improving water treatment, testing for lead and copper at customer taps, and eliminating

the water supply as a significant source of lead and copper.

The EPA published a revised LCR in 2021, or LCR Revisions, to provide greater and more effective protection of public health by reducing exposure to lead and copper in drinking water.

Implementation of the revised rule is intended to better identify high levels of lead, improve the reliability of lead tap sampling results, strengthen corrosion control treatment requirements, expand consumer awareness and improve risk communication.

In addition, implementation of the revised rule is anticipated to accelerate lead service line replacements by closing existing regulatory loopholes, propelling early action, and strengthening replacement requirements.

We filed all required Lead

Service Line Inventories by the October 16, 2024 deadline and are fully compliant with the LCR Revisions.

On October 8, 2024, the EPA announced the new final regulations requiring the removal of lead water lines.

The EPA’s rule, known as the Lead and Copper Rule

Improvements, or LCRI, requires all public water systems to remove lead service lines within 10 years, among other changes to regulations in the EPA’s LCR.

The service lines connect a home’s plumbing system to a public water system’s main water line.

The LCRI specifies that the water provider will cover the cost for replacements of the customer’s service line up to the first fitting inside the structure being served.

Capital investment and operating costs incurred by water utilities for

customer-side pipe replacements are typically recoverable in water rates charged to customers as approved by the applicable public service commission.

The DPH has set maximum contaminant levels for certain substances that are more restrictive than the maximum contaminant levels set by the EPA.

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We have 144 operating and 62 observation and monitoring wells in our Delaware systems.

At December 31, 2023, we had allocation permits for 116 wells and 25 wells that

did not require a permit.

At December 31, 2024, we had allocation permits for 116 wells and had 25 wells

that did not require a permit.

Our access to aquifers within our service territory is not exclusive.

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systems that meet federal, state and local laws.

In March 2024, the SEC passed rule changes that will require registrants to provide certain climate-related information in their registration statements and

annual reports.

The new rules enhance and standardize climate-related disclosures in an effort to provide investors with more consistent, comparable and reliable information about the impact of climate-related risks on registrants.

The rules require

disclosure of greenhouse gas (GHG) emissions in annual reports and registration statements.

Additionally, all registrants would be required to provide numerous climate-related disclosures within their financial statements and elsewhere in their

The new rules apply to companies on a phased-in basis, with the first compliance deadline for large accelerated filers required for fiscal year 2025 annual reports filed in 2026.

The next compliance deadline for accelerated filers is

required for fiscal year 2026 annual reports filed in 2027.

Also in March 2024, the U.S.

Fifth Circuit Court of Appeals granted a temporary stay of the rules pending judicial review, in response to a petition arguing, among other things, that the

rules would cause irreparable harm and exceed the SEC's authority.

The Company is currently evaluating the impact of the rule changes.

Additional General Information

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Employees and Human Capital Resources

As of December 31, 2023, we employed 251 full-time employees.

employees, 59 were officers and managers;

119 were employed as operations personnel, including engineers, technicians, draftsman, maintenance and repair persons, meter readers and utility personnel;

and 38 were employed in accounting, budgeting,

information systems, human resources, customer relations and public relations.

As of December 31, 2024, we operated with 245 full-time and 4 part-time employees.

Of these employees, 55 were officers and managers;

122 were employed as

operations personnel, including engineers, technicians, draftsman, maintenance and repair persons, meter readers and utility personnel;

and 36 were employed in accounting, budgeting, information systems, human resources, customer relations and public

The remaining 36 employees were administrative personnel.

The Company has no collective bargaining agreements with any of its employees, and its work force is not union

organized or union represented.

The Company has no collective bargaining agreements with any of its employees,

and its work force is not union organized or union represented.

We believe that our relations with our employees are good.

Through ongoing employee development, competitive compensation and benefits, and a focus on health, safety and employee wellbeing, we strive to help

our employees in all aspects of their lives.

Through ongoing employee development, competitive compensation and benefits, and a focus on health, safety and

employee wellbeing, we strive to help our employees in all aspects of their lives.

We believe the Company’s success depends on its ability to attract, develop and retain key personnel.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business