First Quarter Operating Results:
Revenues in the company’s Middlesex system in New Jersey decreased $0.6 million as a result of lower water consumption across all customer classes. Water use by general retail metered customers declined by 6.5%. Water consumption demands by several large industrial customers in New Jersey dropped due to reduced output from their production processes. This trend is also reflected in consumption patterns in certain of the company’s commercial customers, which are generally office facilities and guest facilities. Revenues improved $0.1 million in the company’s Tidewater system in Delaware due to a combination of customer growth, higher consumption and higher rates in effect. Revenues from contract operations with the City of Perth Amboy, New Jersey raised $0.2 million due to scheduled fee increases.
Our Middlesex system is seeing evidence of the economic challenges facing certain commercial and industrial customers as demands for the products and services they provide have decreased, stated Dennis W. Doll, president and chief executive officer. The ultimate future impact of recent economic conditions on these customers is unknown at this time. However, these conditions highlight a need to accelerate rate case activity in New Jersey to adjust our regulated revenue requirement across various customer classes. We continue to be encouraged by customer growth and higher consumption in our Delaware operations and are prepared to meet the summer water consumption demands of this growing customer base, added Doll.
Operation and maintenance expenses for the three months ended March 31, 2009 increased $0.9 million or 7.8%, compared to the same period in 2008, with labor, pension and other benefits costs rising $0.4 million due to increases in wages and resources necessary to meet the growing needs of the company’s Delaware service territory. Water production costs were $0.2 million higher due to increased sales in Delaware and higher costs for purchased water, electric power and chemicals in New Jersey. During the quarter, the company increased its uncollectible accounts reserve to reflect current economic conditions, which resulted in additional expense of $0.1 million.
Board Declares Quarterly Dividend:
The company’s board of directors declared a quarterly cash dividend of $0.1775 per share, payable June 1, 2009 to common shareholders as of May 15, 2009. The company has paid cash dividends in varying amounts continually since 1912. Middlesex Water has a dividend reinvestment plan under which dividends and optional cash payments can be used to purchase additional shares of common stock.
