Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number 000-18516

ARTESIAN RESOURCES CORPORATION

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(Exact name of registrant as specified in its charter)

Delaware	51-0002090
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(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

664 Churchmans Road, Newark, Delaware 19702

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Address of principal executive offices

(302) 453 – 6900

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Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol (s)	Name of each exchange on which registered
Common Stock	ARTNA	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☑

Yes

□

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data file required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☑

Yes

□

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and “emerging growth company” in Rule 12(b)-2 of the Exchange Act.

Large Accelerated Filer □

Accelerated Filer ☐

Non-accelerated Filer ☑

Smaller Reporting Company ☒

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b) ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act ).

☐

Yes

☑

As of August 3, 2023, 9,393,636 shares of Class A Non-Voting Common Stock and 881,452 shares of Class B Common Stock were outstanding.

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TABLE OF CONTENTS

ARTESIAN RESOURCES CORPORATION

FORM 10-Q

Part I	-	Financial Information:

Item 1	-	Financial Statements	Page(s)

		Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022 (unaudited)	3

		Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022 (unaudited)	4

		Condensed Consolidated Statements of Cash Flows for the three and six months ended June 30, 2023 and 2022 (unaudited)	5 - 6

		Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months periods ended June 30, 2023 and 2022 (unaudited)	7

		Notes to the Condensed Consolidated Financial Statements	8 - 24

Item 2	-	Management's Discussion and Analysis of Financial Condition and Results of Operations	25 - 33

Item 3	-	Quantitative and Qualitative Disclosures about Market Risk	34

Item 4	-	Controls and Procedures	34

Part II	-	Other Information	35

Item 1	-	Legal Proceedings	35

Item 1A	-	Risk Factors	35

Item 2	-	Unregistered Sales of Equity Securities and Use of Proceeds	35

Item 3		Defaults Upon Senior Securities	35

Item 4		Mine Safety Disclosures	35

Item 5		Other Information	35

Item 6	-	Exhibits	36
-
Signatures

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PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

ARTESIAN RESOURCES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(In thousands)

ASSETS	June 30, 2023		December 31, 2022
Utility plant, at original cost (less accumulated depreciation - 2023 - $179,667; 2022 - $172,954)	$	695,526	$	668,031
Current assets
Cash and cash equivalents		5,923		1,309
Accounts and other receivables (less allowance for doubtful accounts - 2023 - $409; 2022 - $416)		11,952		13,511
Income tax receivable		992		1,632
Unbilled operating revenues		1,631		1,586
Materials and supplies		5,788		4,702
Prepaid property taxes		3		2,186
Prepaid expenses and other		3,826		2,878
Total current assets		30,115		27,804
Other assets
Non-utility property (less accumulated depreciation - 2023 - $1,023; 2022 - $990)		3,712		3,740
Other deferred assets		11,013		10,536
Goodwill		1,939		1,939
Operating lease right of use assets		500		467
Total other assets		17,164		16,682
Regulatory assets, net		7,318		7,274
Total Assets	$	750,123	$	719,791

LIABILITIES AND STOCKHOLDERS' EQUITY
Stockholders' equity
Common stock	$	10,275	$	9,502
Preferred stock		—		—
Additional paid-in capital		142,910		107,143
Retained earnings		74,088		71,286
Total stockholders' equity		227,273		187,931
Long-term debt, net of current portion		175,597		175,619
		402,870		363,550
Current liabilities
Lines of credit		—		20,174
Current portion of long-term debt		2,100		2,003
Accounts payable		9,222		10,929
Accrued expenses		6,158		4,246
Overdraft payable		558		43
Accrued interest		898		989
Income taxes payable		187		6
Customer and other deposits		2,569		2,489
Other		3,059		3,190
Total current liabilities		24,751		44,069

Commitments and contingencies

Deferred credits and other liabilities
Net advances for construction		3,489		3,686
Operating lease liabilities		494		466
Regulatory liabilities		28,537		28,721
Deferred investment tax credits		431		439
Deferred income taxes		55,207		54,552
Total deferred credits and other liabilities		88,158		87,864

Net contributions in aid of construction		234,344		224,308
Total Liabilities and Stockholders’ Equity	$	750,123	$	719,791

See notes to the condensed consolidated financial statements.

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ARTESIAN RESOURCES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(In thousands, except per share amounts)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023		2022
Operating revenues
Water sales	$	20,636		$	19,722		$	38,652	$	37,865
Other utility operating revenue		3,032			2,914			5,848		5,440
Non-utility operating revenue		1,583			2,375			3,246		3,893
Total Operating Revenues		25,251			25,011			47,746		47,198

Operating expenses
Utility operating expenses		11,626			10,070			22,899		20,566
Non-utility operating expenses		1,122			1,905			2,206		2,847
Depreciation and amortization		3,215			3,055			6,439		6,140
State and federal income taxes		1,593			1,725			2,906		3,144
Property and other taxes		1,487			1,413			3,027		2,914
Total Operating Expenses		19,043			18,168			37,477		35,611

Operating income		6,208			6,843			10,269		11,587

Other income, net
Allowance for funds used during construction (AFUDC)		588			324			1,046		505
Miscellaneous (expense) income		(12	)		(33	)		1,591		1,412

Income before interest charges		6,784			7,134			12,906		13,504

Interest charges		2,341			2,088			4,758		3,975

Net income applicable to common stock	$	4,443		$	5,046		$	8,148	$	9,529

Income per common share:
Basic	$	0.44		$	0.53		$	0.84	$	1.01
Diluted	$	0.44		$	0.53		$	0.84	$	1.01

Weighted average common shares outstanding:
Basic		9,998			9,452			9,752		9,438
Diluted		10,002			9,470			9,757		9,464

Cash dividends per share of common stock	$	0.2840		$	0.2729		$	0.5624	$	0.5404

See notes to the condensed consolidated financial statements.

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ARTESIAN RESOURCES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In thousands)

	For the Six Months Ended June 30,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	8,148		$	9,529
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		6,439			6,140
Deferred income taxes, net		647			(640	)
Stock compensation		116			104
AFUDC, equity portion		(648	)		(349	)

Changes in assets and liabilities, net of acquisitions:
Accounts and other receivables, net of allowance for doubtful accounts		1,559			204
Income tax receivable		640			1,468
Unbilled operating revenues		(45	)		(704	)
Materials and supplies		(1,086	)		(936	)
Income tax payable		181			792
Prepaid property taxes		2,183			2,862
Prepaid expenses and other		(948	)		(130	)
Other deferred assets		(494	)		511
Regulatory assets		(101	)		185
Regulatory liabilities		(260	)		(254	)
Accounts payable		(1,095	)		(4,680	)
Accrued expenses		158			(934	)
Accrued interest		(91	)		(21	)
Deposits and other		(82	)		441
NET CASH PROVIDED BY OPERATING ACTIVITIES		15,221			13,588

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (net of AFUDC, equity portion)		(32,314	)		(23,266	)
Investment in acquisitions, net of cash acquired		—			(6,341	)
Proceeds from sale of assets		64			41
NET CASH USED IN INVESTING ACTIVITIES		(32,250	)		(29,566	)

CASH FLOWS FROM FINANCING ACTIVITIES
Net (repayments) under lines of credit agreements		(20,174	)		(17,123	)
Increase in overdraft payable		515			304
Net advances and contributions in aid of construction		10,149			8,013
Net proceeds from issuance of common stock		36,737			936
Issuance of long-term debt		1,235			30,000
Equity issuance costs		(313	)		—
Dividends paid		(5,346	)		(5,096	)
Deferred debt issuance costs		—			(102	)
Principal repayments of long-term debt		(1,160	)		(826	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		21,643			16,106

NET INCREASE IN CASH AND CASH EQUIVALENTS		4,614			128

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		1,309			92

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	5,923		$	220

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ARTESIAN RESOURCES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS CONTINUED

Unaudited

(In thousands)

Non-cash Investing and Financing Activity:
Utility plant received as construction advances and contributions	$	1,726	$	3,243
Change in amounts included in accounts payable, accrued payables and other related to capital expenditures		(1,168)		1,761

Supplemental Disclosures of Cash Flow Information:
Interest paid	$	4,849	$	3,996
Income taxes paid	$	2,076	$	743


Purchase price allocation of investment in acquisitions:
Utility plant	$	—	$	33,345
Cash		—		280
Goodwill		—		1,939
Other assets		—		1,033
Total assets		—		36,597
Less:
Liabilities		—		2,828
Future contractual obligation payable to seller		—		1,569
Contributions in aid of construction		—		25,597
Cash paid for acquisitions		—		6,621
Cash received from acquisitions		—		280
Net cash paid for acquisitions	$	—	$	6,341

See notes to the condensed consolidated financial statements.

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ARTESIAN RESOURCES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Unaudited

(In thousands)

	Common Shares Outstanding Class A Non-Voting (1) (3) (4)		Common Shares Outstanding Class B Voting (2)		$1 Par Value Class A Non-Voting		$1 Par Value Class B Voting		Additional Paid-in Capital		Retained Earnings			Total

Balance as of December 31, 2021		8,532		881	$	8,532	$	881	$	104,989	$	63,607		$	178,009
Net income		—		—		—		—		—		4,483			4,483
Cash dividends declared
Common stock		—		—		—		—		—		(2,518	)		(2,518	)
Issuance of common stock
Dividend reinvestment plan		2		—		2		—		87		—			89
Employee stock options and awards(4)		22		—		22		—		475		—			497
Employee Retirement Plan(3)		–		—		–		—		–		—			–
Balance as of March 31, 2022		8,556		881		8,556		881		105,551		65,572			180,560
Net income		—		—		—		—		—		5,046			5,046
Cash dividends declared
Common stock		—		—		—		—		—		(5,159	)		(5,159	)
Issuance of common stock
Dividend reinvestment plan		2		—		2		—		97		—			99
Employee stock options and awards(4)		19		—		19		—		336		—			355
Employee Retirement Plan(3)		—		—		—		—		—		—			-
Balance as of June 30, 2022		8,577		881		8,577		881		105,984		65,459			180,901

	Common Shares Outstanding Class A Non-Voting (1) (3) (4)		Common Shares Outstanding Class B Voting (2)		$1 Par Value Class A Non-Voting		$1 Par Value Class B Voting		Additional Paid-in Capital		Retained Earnings		Total

Balance as of December 31, 2022		8,621		881	$	8,621	$	881	$	107,143	$	71,286	$	187,931
Net income		—		—		—		—		—		3,705		3,705
Cash dividends declared
Common stock		—		—		—		—		—		(2,646)		(2,646)
Issuance of common stock
Dividend reinvestment plan		2		—		2		—		91		—		93
Employee stock options and awards(4)		—		—		—		—		56		—		56
Employee Retirement Plan(3)		—		—		—		—		—		—		—
Balance as of March 31, 2023		8,623		881		8,623		881		107,290		72,345		189,139
Net income		—		—		—		—		—		4,443		4,443
Cash dividends declared
Common stock		—		—		—		—		—		(2,700)		(2,700)
Issuance of common stock
Public offering, net of costs		764		—		764		—		35,467		—		36,231
Dividend reinvestment plan		2		—		2		—		98		—		100
Employee stock options and awards(4)		5		—		5		—		55		—		60
Employee Retirement Plan(3)		—		—		—		—		—		—		—
Balance as of June 30, 2023		9,394		881		9,394		881		142,910		74,088		227,273

(1)	At June 30, 2023 and June 30, 2022, Class A Common Stock had 15,000,000 shares authorized. For the same periods, shares issued, inclusive of treasury shares, were 9,422,321 and 8,606,597, respectively.

(2)	At June 30, 2023 and June 30, 2022, Class B Common Stock had 1,040,000 shares authorized and 881,452 shares issued.

(3)	Artesian Resources Corporation registered 200,000 shares of Class A Common Stock, subsequently adjusted for stock splits, available for purchase through the Company’s 401(k) retirement plan.

(4)

Under the Equity Compensation Plan, effective December 9, 2015, or the 2015 Plan, Artesian Resources Corporation authorized up to 331,500 shares of Class A Common Stock for issuance of grants in the form of stock options, stock units, dividend equivalents and other stock-based awards, subject to adjustment in certain circumstances as discussed in the 2015 Plan. Includes stock compensation expense for June 30, 2023, and June 30, 2022, see Note 6-Stock Compensation Plans.

See notes to the condensed consolidated financial statements

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – GENERAL

Artesian Resources Corporation, or Artesian Resources, includes income from the earnings of all of our wholly owned subsidiaries. The terms "we", "our", "Artesian" and the "Company" as used herein refer to Artesian Resources and its subsidiaries.

DELAWARE REGULATED UTILITY SUBSIDIARIES

Artesian Water Company, Inc., or Artesian Water, distributes and sells water to residential, commercial, industrial, governmental, municipal and utility customers 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. Artesian Water also provides water for public and private fire protection to customers in our service territories.

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.

Artesian Wastewater Management, Inc., or Artesian Wastewater, began providing wastewater services in Sussex County, Delaware in July 2005. Artesian Wastewater is a regulated entity that owns wastewater collection and treatment infrastructure and provides wastewater services to customers in Delaware as a regulated public wastewater service company.

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.

MARYLAND REGULATED UTILITY SUBSIDIARIES

Artesian Water Maryland, Inc., or Artesian Water Maryland, began operations in August 2007. Artesian Water Maryland distributes and sells water to residential, commercial, industrial and municipal customers in Cecil County, Maryland.

Artesian Wastewater Maryland, Inc., or Artesian Wastewater Maryland, was incorporated on June 3, 2008 and is authorized and able to provide regulated wastewater services to customers in the State of Maryland. It is currently not providing these services.

PENNSYLVANIA REGULATED UTILITY SUBSIDIARY

Artesian Water Pennsylvania, Inc., or Artesian Water Pennsylvania, began operations in 2002. It provides water service to a residential community in Chester County, Pennsylvania.

OTHER NON-UTILITY SUBSIDIARIES

Our three other subsidiaries, none of which are regulated, are Artesian Utility Development, Inc., or Artesian Utility, Artesian Development Corporation, or Artesian Development, and Artesian Storm Water Services, Inc., or Artesian Storm Water.

Artesian Utility was formed in 1996 and designs and builds water and wastewater infrastructure and provides contract water and wastewater operation services on the Delmarva Peninsula to private, municipal and governmental institutions. Artesian Utility also evaluates land parcels, provides recommendations to developers on the size of water or wastewater facilities and the type of technology that should be used for treatment at such facilities, and operates water and wastewater facilities in Delaware for municipal and governmental agencies. Artesian Utility also contracts with developers and government agencies for design and construction of wastewater infrastructure throughout the Delmarva Peninsula.

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Artesian Utility currently operates wastewater treatment facilities for the Town of Middletown, in southern New Castle County, Delaware, or Middletown, under a 20-year contract that expires in July 2039. Artesian Utility currently operates three wastewater treatment systems with a combined capacity of up to approximately 3.8 million gallons per day. The wastewater treatment facilities in Middletown provide reclaimed wastewater for use in spray irrigation on public and agricultural lands in the area.

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. 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.

Artesian Development is a real estate holding company that owns properties, including land approved for office buildings, a water treatment plant and 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 nearly 10,000 square feet of warehouse space.

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. Artesian Storm Water elected to not seek new opportunities. 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 to be effective as of June 20, 2023.

NOTE 2 – BASIS OF PRESENTATION

Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC, for Form 10-Q. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. Accordingly, these condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes in the Company's annual report on Form 10-K for fiscal year 2022 as filed with the SEC on March 10, 2023.

The condensed consolidated financial statements include the accounts of Artesian Resources Corporation and its wholly owned subsidiaries, including its principal operating company, Artesian Water. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments (unless otherwise noted) necessary to present fairly the Company's balance sheet position as of June 30, 2023, the results of its operations for the three and six-month periods ended June 30, 2023 and June 30, 2022, its cash flows for the six-month periods ended June 30, 2023 and June 30, 2022 and the changes in stockholders’ equity for the three and six-month periods ended June 30, 2023 and June 30, 2022. The December 31, 2022 Condensed Consolidated Balance Sheet was derived from the Company’s December 31, 2022 audited consolidated financial statements, but does not include all disclosures and notes normally provided in annual financial statements.

The results of operations for the interim periods presented are not necessarily indicative of the results for the full year or for future periods.

Regulated Utility Accounting

The accounting records of Artesian Water, Artesian Wastewater, and, effective January 14, 2022, TESI are maintained in accordance with the uniform system of accounts as prescribed by the Delaware Public Service Commission, or the DEPSC. The accounting records of Artesian Water Pennsylvania are maintained in accordance with the uniform system of accounts as prescribed by the Pennsylvania Public Utility Commission, or the PAPUC. The accounting records of Artesian Water Maryland and Artesian Wastewater Maryland are maintained in accordance with the uniform system of accounts as prescribed by the Maryland Public Service Commission, or the MDPSC. Each of these subsidiaries follow the provisions of Financial Accounting Standards Board, or FASB, ASC Topic 980, which provide guidance for companies in regulated industries. These regulated subsidiaries account for the majority of our operating revenue. See Note 17 to our Condensed Consolidated Financial Statements for a full description of our segment information.

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Use of Estimates

The condensed consolidated financial statements were prepared in conformity with generally accepted accounting principles in the U.S., which require management to make certain estimates and assumptions regarding the reported amounts of assets and liabilities including unbilled revenues, credit losses and reserves for bad debt, regulatory asset recovery, lease agreements, goodwill and contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from management's estimates.

All additions to utility plant are recorded at cost. Business combinations pursuant to ASC Topic 805 may result in a purchase price allocation and the acquired assets are required to be evaluated by the applicable regulatory agency. Artesian Wastewater acquired TESI in January 2022 and Artesian Water purchased substantially all of the water operating assets from the Town of Clayton in May 2022. As of December 31, 2022, the fair value determination for TESI and the water operating assets acquired from the Town of Clayton was finalized. A third-party valuation specialist assisted with the valuation of the assets acquired.

NOTE 3 – REVENUE RECOGNITION

Background

Artesian’s operating revenues are primarily attributable to contract services based upon regulated tariff rates approved by the DEPSC, the MDPSC, and the PAPUC. Regulated tariff contract service revenues consist of water consumption, industrial wastewater services, fixed fees for water and wastewater services including customer and fire protection fees, service charges and Distribution System Improvement Charges, or DSIC, billed to customers at rates outlined in our tariffs that represent stand-alone selling prices. Our non-tariff contract revenues, which are primarily non-utility revenues, consist of SLP Plan fees, water and wastewater contract operations, design and installation contract services, and wastewater inspection fees. Other regulated operating revenue primarily consists of developer guarantee contributions for wastewater and rental income for antenna agreements, which are not considered in the scope of Accounting Standards Codification 606, Revenue from Contracts with Customers.

Tariff Contract Revenues

Artesian generates revenue from the sale of water to customers in Delaware, Cecil County, Maryland, and Southern Chester County, Pennsylvania once a customer requests service in our territory. We recognize water consumption revenue at tariff rates on a cycle basis for the volume of water transferred to customers based upon meter readings for actual gallons of water consumed as well as unbilled amounts for estimated usage from the date of the last meter reading to the end of the accounting period. As actual usage amounts are known based on recurring meter readings, adjustments are made to the unbilled estimates in the next billing cycle based on the actual results. Estimates are made on an individual customer basis, based on one of three methods: the previous year’s consumption in the same period, the previous billing period’s consumption, or averaging. While actual usage for individual customers may differ materially from the estimate based on management judgments described above, we believe the overall total estimate of consumption and revenue for the fiscal period will not differ materially from actual billed consumption. The majority of our water customers are billed for water consumed on a monthly basis, while the remaining customers are billed on a quarterly basis. As a result, we record unbilled operating revenue (contract asset) for any estimated usage through the end of the accounting period that will be billed in the next monthly or quarterly billing cycle.

Artesian generates revenue from industrial wastewater services provided to a customer in Sussex County, Delaware. We recognize industrial wastewater service revenue at a contract rate on a monthly basis for the volume of wastewater transferred to Artesian’s wastewater facilities based upon meter readings for actual gallons of wastewater transferred. These services are invoiced at the end of every month based on the actual meter readings for that month, and therefore there is no contract asset or liability associated with this revenue. The contract also provides for a minimum required volume of wastewater flow to our facility. At each year end, any shortfall of the actual volume from the required minimum volume is billed to the industrial customer and recorded as revenue. Additionally, if during the course of the year it is probable that the actual volume will not meet the minimum required volume, estimated revenue amounts would be recorded for the pro rata minimum volume, constrained for potential flow capacity that could occur in the remainder of the year.

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Artesian generates revenue from metered wastewater services provided to certain customers in Sussex County, Delaware. We recognize metered wastewater services at tariff rates on a cycle basis for the volume of wastewater transferred to Artesian’s wastewater facilities based upon meter readings for actual gallons of water transferred, as well as unbilled amounts for estimated volume from the date of the last meter reading to the end of the accounting period. As actual volume amounts are known based on recurring meter readings, adjustments are made to the unbilled estimates in the next billing cycle based on the actual results. Estimates are made on an individual customer basis, based on one of three methods: the previous year’s volume in the same period, the previous billing period’s volume, or averaging. While actual usage for individual customers may differ materially from the estimate based on management judgments described above, we believe the overall total estimate of volume and revenue for the fiscal period will not differ materially from actual billed consumption. The majority of these wastewater customers are billed for the volume of water transferred on a quarterly basis. As a result, we record unbilled operating revenue (contract asset) for any estimated volume through the end of the accounting period that will be billed in the next quarterly cycle.

Artesian generates fixed-fee revenue for water and wastewater services provided to customers once a customer requests service in our territory. Our wastewater territory is located in Sussex County, Delaware. We recognize revenue from these services on a ratable basis over time as the customer simultaneously receives and consumes all the benefits of the Company remaining ready to provide them water and wastewater service. These contract services are billed either in advance or arrears at tariff rates on a monthly, quarterly or semi-annual basis. For contract services billed in arrears, we record unbilled operating revenue (contract asset) for any services through the end of the accounting period that will be billed in the next monthly or quarterly cycle. For contract services billed in advance, we record deferred revenue (contract liability) and accounts receivable for any amounts for which we have a right to invoice but for which services have not been provided. This deferred revenue is netted with unbilled operating revenue on the Condensed Consolidated Balance Sheet.

Artesian generates service charges primarily from non-payment fees, such as water shut-off and reconnection fees and finance charges. These fees are billed and recognized as revenue at the point in time when our tariffs indicate the Company has the right to payment such as days past due have been reached or shut-offs and reconnections have been performed. There is no contract asset or liability associated with these fees.

Artesian generates revenue from DSIC, which are surcharges applied to water customer tariff rates in Delaware related to specific types of water distribution system improvements. This rate is calculated on a semi-annual basis based on an approved projected revenue requirement over the following six-month period. This rate is adjusted up or down at the next DSIC filing to account for any differences between actual earned revenue and the projected revenue requirement. Since DSIC revenue is a surcharge applied to tariff rates, we recognize DSIC revenue based on the same guidelines as noted above depending on whether the surcharge was applied to consumption revenue or fixed-fee revenue.

Accounts receivable related to tariff contract revenues are typically due within 25 days of invoicing. An allowance for doubtful accounts is calculated as a percentage of total associated revenues based upon historical trends and adjusted for current conditions. We mitigate our exposure to credit losses by discontinuing services in the event of non-payment; accordingly, the related allowance for doubtful accounts and associated bad debt expense has not been significant.

Non-tariff Contract Revenues

Artesian generates SLP Plan revenue once a customer requests service to cover all parts, materials and labor required to repair or replace leaking water service lines, leaking or clogged sewer lines, or water and wastewater lines within the customer’s residence, up to an annual limit. We recognize revenue from these services on a ratable basis over time as the customer simultaneously receives and consumes all the benefits of having service line protection services. These contract services are billed in advance on a monthly or quarterly basis. As a result, we record deferred revenue (contract liability) and accounts receivable for any amounts for which we have a right to invoice but for which services have not been provided. Accounts receivable from SLP Plan customers are typically due within 25 days of invoicing. An allowance for doubtful accounts is calculated as a percentage of total SLP Plan contract revenue. We mitigate our exposure to credit losses by discontinuing services in the event of non-payment; accordingly, the related allowance for doubtful accounts and associated bad debt expense has not been significant.

Artesian generates contract operation revenue from water and wastewater operation services provided to customers. We recognize revenue from these operation contracts, which consist primarily of monthly operation and maintenance services, over time as customers receive and consume the benefits of such services performed. The majority of these services are invoiced in advance at the beginning of every month and are typically due within 30 days, and therefore there is no contract asset or liability associated with most of these revenues. We have one operation contract that was paid in advance resulting in a contract liability for services that have not yet been provided. An allowance for doubtful accounts is provided based on a periodic analysis of individual account balances, including an evaluation of days outstanding, payment history, recent payment trends, and our assessment of our customers’ creditworthiness. The related allowance for doubtful accounts and associated bad debt expense has not been significant.

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Artesian generates design and installation revenue for services related to the design and construction of wastewater infrastructure for a state agency under contract. We recognize revenue from these services over time as services are performed using the percentage-of-completion method based on an input method of incurred costs (cost-to-cost). These services are invoiced at the end of every month based on incurred costs to date. As of June 30, 2023, there is no associated contract asset or liability. There is no allowance for doubtful accounts or bad debt expense associated with this revenue.

Artesian generates inspection fee revenue for inspection services related to onsite wastewater collection systems installed by developers of new communities. These fees are paid by developers in advance when a service is requested for a new phase of a development. Inspection fee revenue is recognized on a per lot basis once the inspection of the infrastructure that serves each lot is completed. As a result, we record deferred revenue (contract liability) for any amounts related to infrastructure not yet inspected. There are no accounts receivable, allowance for doubtful accounts or bad debt expense associated with inspection fee contracts.

Sales Tax

The majority of Artesian’s revenues are earned within the State of Delaware, where there is no sales tax. Revenues earned in the State of Maryland and the Commonwealth of Pennsylvania are related primarily to the sale of water by a public water utility and are exempt from sales tax. Therefore, no sales tax is collected on revenues.

Disaggregated Revenues

The following table shows the Company’s revenues disaggregated by service type; all revenues are generated within a similar geographical location:

(in thousands)	Three months ended June 30, 2023		Three months ended June 30, 2022		Six months ended June 30, 2023		Six months ended June 30, 2022
Tariff Revenue
Consumption charges	$	12,936	$	12,182	$	23,383	$	22,749
Fixed fees		8,028		7,751		16,066		15,529
Service charges		174		137		354		293
DSIC		1,340		1,282		2,519		2,464
Metered wastewater services		146		129		251		269
Industrial wastewater services		402		422		848		828
Total Tariff Revenue	$	23,026	$	21,903	$	43,421	$	42,132

Non-Tariff Revenue
Service line protection plans	$	1,372	$	1,217	$	2,735	$	2,439
Contract operations		276		242		521		453
Design and installation		16		978		121		1,101
Inspection fees		109		66		187		106
Total Non-Tariff Revenue	$	1,773	$	2,503	$	3,564	$	4,099
Other Operating Revenue	$	452	$	605	$	761	$	967
Total Operating Revenue	$	25,251	$	25,011	$	47,746	$	47,198

Contract Assets and Contract Liabilities

Our contract assets and liabilities consist of the following:

(in thousands)	June 30, 2023		December 31, 2022

Contract Assets – Tariff	$	2,800	$	2,618

Deferred Revenue
Deferred Revenue – Tariff	$	1,394	$	1,231
Deferred Revenue – Non-Tariff		554		438
Total Deferred Revenue	$	1,948	$	1,669

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For the six months ended June 30, 2023, the Company recognized revenue of $1.2 million from amounts that were included in Deferred Revenue – Tariff at the beginning of the year and revenue of $0.3 million from amounts that were included in Deferred Revenue – Non- Tariff at the beginning of the year.

The changes in Contract Assets and Deferred Revenue are primarily due to normal timing differences between our performance and customer payments.

Remaining Performance Obligations

As of June 30, 2023 and December 31, 2022, Deferred Revenue – Tariff is recorded net of contract assets within Unbilled operating revenues and represents our remaining performance obligations for our fixed fee water and wastewater services, all of which are expected to be satisfied and associated revenue recognized in the next three months.

As of June 30, 2023 and December 31, 2022, Deferred Revenue – Non-Tariff is recorded within Other current liabilities and represents our remaining performance obligations for our SLP Plan services, contract water operation services and wastewater inspections, which are expected to be satisfied and associated revenue recognized within the next three months for the SLP revenue, approximately six years for the contract service revenue and one year for the inspection fee revenue.

NOTE 4 – ACCOUNTS RECEIVABLE

Accounts receivable are recorded at the invoiced amounts. As set forth in a settlement agreement, Artesian Water will receive reimbursements from the Delaware Sand and Gravel Remedial Trust, or Trust, for Artesian Water’s past capital and operating costs, totaling approximately $10.0 million, related to the treatment costs associated with the release of contaminants from the Delaware Sand & Gravel Landfill Superfund Site, or Site, in groundwater that Artesian Water uses for public potable water supply. Approximately $2.5 million was paid in each of August 2022 and July 2023. The remaining $5.0 million is due in two equal installments no later than July of 2024 and 2025.

An allowance for doubtful accounts is calculated as a percentage of total associated revenues based upon historical trends and adjusted for current conditions. We mitigate our exposure to credit losses by discontinuing services in the event of non-payment; accordingly, the related allowance for doubtful accounts and associated bad debt expense has not been significant. The following table summarizes the changes in the Company’s accounts receivable balance:

	June 30,		December 31,
(in thousands)	2023		2022

Customer accounts receivable – water	$	7,562	$	5,981
Customer accounts receivable – wastewater		544		482
Settlement agreement receivable		2,518		2,532
Miscellaneous accounts receivable		1,115		3,781
Developer receivable		622		1,151
		12,361		13,927
Less allowance for doubtful accounts		409		416
Net accounts receivable	$	11,952	$	13,511

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NOTE 5 – LEASES

The Company leases land and office equipment under operating leases from non-related parties. Our leases have remaining lease terms of 5 years to 74 years, some of which include options to automatically extend the leases for up to 66 years and are included as part of the lease liability and right of use assets as we expect to exercise the options. Payments made under operating leases are recognized in the consolidated statement of operations on a straight-line basis over the period of the lease. The annual lease payments for the land operating leases increase each year either by the most recent increase in the Consumer Price Index or by 3%, as applicable based on the lease agreements. Periodically, the annual lease payment for one operating land lease is determined based on the fair market value of the applicable parcel of land. None of the operating leases contain contingent rent provisions. The commencement date of all the operating leases is the earlier of the date we become legally obligated to make rent payments or the date we may exercise control over the use of the land or equipment. The Company currently does not have any financing leases and does not have any lessor leases that require disclosure.

Management made certain assumptions related to the separation of lease and nonlease components and to the discount rate used when calculating the right of use asset and liability amounts for the operating leases. As our leases do not provide an implicit rate, we use our incremental borrowing rates for long-term and short-term agreements and apply the rates accordingly based on the term of the lease agreements to determine the present value of lease payments.

Rent expense for all operating leases, except those with terms of 12 months or less comprises:

	(in thousands)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022

Minimum rentals	$	4	$	2	$	6	$	9
Contingent rentals		—		—		—		—

	$	4	$	2	$	6	$	9

Supplemental cash flow information related to leases is as follows:

	(in thousands)
	Six Months Ended		Six Months Ended
	June 30, 2023		June 30, 2022

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6	$	9
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	500	$	445

Supplemental balance sheet information related to leases is as follows:

	(in thousands, except lease term and discount rate)
	June 30, 2023			December 31, 2022

Operating Leases:
Operating lease right-of-use assets	$	500		$	467

Other current liabilities	$	8			2
Operating lease liabilities		494			466
Total operating lease liabilities	$	502		$	468


Weighted Average Remaining Lease Term
Operating leases	57 years			61 years
Weighted Average Discount Rate
Operating leases		5.0	%		5.0	%

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Maturities of operating lease liabilities that have initial or remaining non-cancelable lease terms in excess of one year as of June 30, 2023 are as follows:

	(in thousands)
	Operating Leases
Year
2024	$	34
2025		34
2026		34
2027		34
2028		34
Thereafter		1,402
Total undiscounted lease payments	$	1,572
Less effects of discounting		(1,070	)
Total lease liabilities recognized	$	502

As of June 30, 2023, we have not entered into operating or finance leases that will commence at a future date.

NOTE 6 – STOCK COMPENSATION PLANS

On December 9, 2015, the Company’s stockholders approved the 2015 Equity Compensation Plan, or the 2015 Plan, that replaced the 2005 Equity Compensation Plan, or the 2005 Plan, which expired on May 24, 2015. The 2015 Plan provides that grants may be in any of the following forms: incentive stock options, nonqualified stock options, stock units, stock awards, dividend equivalents and other stock-based awards. The 2015 Plan is administered and interpreted by the Compensation Committee of the Board of Directors, or the Committee. The Committee has the authority to determine the individuals to whom grants will be made under the 2015 Plan, determine the type, size and terms of the grants, determine the time when grants will be made and the duration of any applicable exercise or restriction period (subject to the limitations of the 2015 Plan) and deal with any other matters arising under the 2015 Plan. The Committee presently consists of three directors, each of whom is a non-employee director of the Company. All of the employees of the Company and its subsidiaries are eligible for grants under the 2015 Plan. Non-employee directors of the Company are also eligible to receive grants under the 2015 Plan.

Compensation expense, for the three and six months ended June 30, 2023 of approximately $60,000 and $116,000, respectively, was recorded for restricted stock awards issued in May 2022 and May 2023. Compensation expense, for the three and six months ended June 30, 2022 of approximately $55,000 and $104,000, respectively, was recorded for restricted stock awards issued in May 2021 and May 2022. Costs were determined based on the fair value on the dates of the awards and those costs were charged to income over the service periods associated with the awards.

There was no stock compensation cost capitalized as part of an asset.

On May 9, 2023, 5,000 shares of Class A Common Stock, or Class A Stock, were granted as restricted stock awards. The fair value per share was $54.88, the closing price of the Class A Stock as recorded on the Nasdaq Global Select Market on May 9, 2023. Prior to their release date, these restricted stock awards may be subject to forfeiture in the event of the recipient’s termination of service.

On May 3, 2022, 5,000 shares of Class A Common Stock, or Class A Stock, were granted as restricted stock awards. The fair value per share was $45.58, the closing price of the Class A Stock as recorded on the Nasdaq Global Select Market on May 3, 2022. Prior to their release date, these restricted stock awards may be subject to forfeiture in the event of the recipient’s termination of service.

The following summary reflects changes in the shares of Class A Stock underlying options and restricted stock awards for the six months ended June 30, 2023:

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	Options								Restricted Awards
	Option Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (Yrs.)		Aggregate Intrinsic Value (in thousands)		Outstanding Restricted Stock Awards			Weighted Average Grant Date FairValue
Plan options/restricted stock awards
Outstanding at January 1, 2023		6,750	$	21.86			$	248		5,000		$	45.58
Granted		—		—				—		5,000			54.88
Exercised/vested and released		—		—				—		(5,000	)		45.58
Expired/cancelled		—		—				—		—			—
Outstanding at June 30, 2023		6,750	$	21.86		0.854	$	171		5,000		$	54.88

Exercisable/vested at June 30, 2023		6,750	$	21.86		0.854	$	171		—			—

There were no options exercised during the six months ended June 30, 2023.

There were no unvested option shares outstanding under the 2015 Plan during the six months ended June 30, 2023.

As of June 30, 2023, there were no unrecognized expenses related to non-vested option shares granted under the 2015 Plan.

As of June 30, 2023, there was $235,000 total unrecognized expenses related to non-vested awards of restricted shares awarded under the 2015 Plan. The cost will be recognized over 0.86 years, the remaining vesting period for the restricted stock awards.

NOTE 7 – OTHER DEFERRED ASSETS

The investment in CoBank, which is a cooperative bank, is related to certain outstanding First Mortgage Bonds and is a required investment in the bank based on the underlying long-term debt agreements. The settlement agreement receivable is related to the long-term portion of reimbursements due in years 2024 and 2025 as further discussed in Note 4-Accounts Receivable.

(in thousands)	June 30, 2023	December 31, 2022

Investment in CoBank	$5,882	$5,351
Settlement agreement receivable-long term	4,991	4,991
Other deferred assets	140	194
	$11,013	$10,536

NOTE 8 – REGULATORY ASSETS

The FASB ASC Topic 980 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.

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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 and were reclassed from deferred costs to a regulatory asset in 2022. Amortization of these deferred costs will begin once the interconnection is completed and Artesian Water begins purchasing water from Artesian Water Pennsylvania.

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	2.5
Maryland rate proceedings	5
Debt related costs	15 to 30 (based on term of related debt)
Deferred costs affiliated interest agreement	20
Goodwill (resulting from acquisition of Mountain Hill Water Company in 2008)	50
Deferred acquisition costs (resulting from purchase of water assets in Cecil County, Maryland in 2011 and Port Deposit, Maryland in 2010)	20
Franchise Costs (resulting from purchase of water assets in Cecil County, Maryland in 2011)	80

Regulatory assets, net of amortization, comprise:
	(in thousands)
	June 30, 2023		December 31, 2022

Deferred contract costs and other	$	238	$	227
Rate case studies		138		57
Rate proceedings		164		—
Deferred income taxes		454		465
Debt related costs		4,504		4,682
Deferred costs affiliated interest agreement		1,114		1,114
Goodwill		262		266
Deferred acquisition and franchise costs		444		463
	$	7,318	$	7,274

NOTE 9 – REGULATORY LIABILITIES

FASB ASC Topic 980 stipulates generally accepted accounting principles for companies whose rates are established or subject to approvals by a third-party regulatory agency. Certain obligations are deferred and/or amortized as determined by the DEPSC, MDPSC, and PAPUC. Regulatory liabilities represent excess recovery of cost or other items that have been deferred because it is probable such amounts will be returned to customers through future regulated rates.

Utility plant retirement cost obligation consists of estimated costs related to the potential removal and replacement of facilities and equipment on the Company’s water and wastewater properties. Effective January 1, 2012, as authorized by the DEPSC, when depreciable units of utility plant are retired, any cost associated with retirement, less any salvage value or proceeds received, is charged to a regulated retirement liability. Each year the liability is increased by an annual amount authorized by the DEPSC.

Deferred settlement refunds consist of reimbursements from the Delaware Sand and Gravel Remedial Trust for Artesian Water’s past capital and operating costs, totaling approximately $10.0 million, related to the treatment costs associated with the release of contaminants from the Delaware Sand & Gravel Landfill Superfund Site in groundwater that Artesian Water uses for public potable water supply, pursuant to the Settlement Agreement. Approximately $2.5 million was paid in each of August 2022 and July 2023. The remaining $5.0 million is due in two equal installments no later than July of 2024 and 2025. Artesian Water received approval from the DEPSC in October 2022 to refund to its customers these reimbursements for past capital and operating costs. The refund for the reimbursements will be applied to current and future customer bills in annual installments. The first refund occurred in October 2022, and future customer refunds will occur no later than August of each year from 2023 through 2025. The amount of the credit will be calculated by dividing the amount of the reimbursement by the number of eligible customers. Beginning in 2022, Artesian Water began recording 2022 and future recovery of capital expenditures as Contributions in Aid of Construction and began recording expense recovery as an offset to operations and maintenance expense, with the intention that those recoveries will be available for inclusion and consideration in any future rate applications. For a full discussion of the Settlement Agreement, refer to Note 18 - Legal Proceedings.

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Pursuant to the enactment of the Tax Cuts and Jobs Act, or TCJA, on December 22, 2017, the Company adjusted its existing deferred income tax balances to reflect the decrease in the corporate income tax rate from 34% to 21% (see Note 12) resulting in a decrease in the net deferred income tax liability of $24.3 million, of which $22.8 million was reclassified to a regulatory liability related to Artesian Water and Artesian Water Maryland. The regulatory liability amount is subject to certain Internal Revenue Service normalization rules that require the benefits to customers be spread over the remaining useful life of the underlying assets giving rise to the associated deferred income taxes. On January 31, 2019, the DEPSC approved the amortization of the regulatory liability amount of $22.2 million over a period of 49.5 years beginning February 1, 2018, subject to audit at a later date. In May 2022, the Company received a rate order from the DEPSC instructing the Company to continue amortizing the liability over a period of 49.5 years, subject to review in the Company’s next base rate filing. The MDPSC has not issued a final order on the regulatory liability amount of $0.6 million regarding the effects of the TCJA on Maryland customers.

Regulatory liabilities comprise:
	(in thousands)
	June 30, 2023		December 31, 2022

Utility plant retirement cost obligation	$	31	$	-
Deferred settlement refunds		7,487		7,487
Deferred income taxes (related to TCJA)		21,019		21,234
	$	28,537	$	28,721

NOTE 10 – NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE

Basic net income per share is based on the weighted average number of common shares outstanding. Diluted net income per share is based on the weighted average number of common shares outstanding, the potentially dilutive effect of employee stock options and restricted stock awards.

The following table summarizes the shares used in computing basic and diluted net income per share:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Weighted average common shares outstanding during the period for Basic computation		9,998		9,452		9,752		9,438
Dilutive effect of employee stock options and awards		4		18		5		26

Weighted average common shares outstanding during the period for Diluted computation		10,002		9,470		9,757		9,464

For the three and six months ended June 30, 2023 and 2022, no shares of restricted stock awards were excluded from the calculations of diluted net income per share.

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The Company has 15,000,000 authorized shares of Class A Stock and 1,040,000 authorized shares of Class B Common Stock, or Class B Stock. As of June 30, 2023, 9,393,344 shares of Class A Stock and 881,452 shares of Class B Stock were issued and outstanding. As of June 30, 2022, 8,577,620 shares of Class A Stock and 881,452 shares of Class B Stock were issued and outstanding. The par value for both classes is $1.00 per share.

Equity per common share was $23.30 and $19.86 at June 30, 2023 and December 31, 2022, respectively. These amounts were computed by dividing common stockholders' equity by the number of weighted average shares of common stock outstanding on June 30, 2023 and December 31, 2022, respectively.

NOTE 11 – REGULATORY PROCEEDINGS

Our water and wastewater utilities generate operating revenue from customers based on rates that are established by state public service commissions through a rate-setting process that may include public hearings, evidentiary hearings and the submission of evidence and testimony in support of the Company’s requested level of rates.

We are subject to regulation by the following state regulatory commissions:

• The DEPSC, regulates Artesian Water, Artesian Wastewater, and TESI.

• The MDPSC, regulates both Artesian Water Maryland and Artesian Wastewater Maryland.

• The PAPUC, regulates Artesian Water Pennsylvania.

Our water and wastewater utility operations are also subject to regulation under the federal Safe Drinking Water Act of 1974, or Safe Drinking Water Act, the Clean Water Act of 1972, or the Clean Water Act, and related state laws, and under federal and state regulations issued under these laws. These laws and regulations establish criteria and standards for drinking water and for wastewater discharges. Capital expenditures and operating costs required as a result of water quality standards and environmental requirements have been traditionally recognized by state regulatory commissions as appropriate for inclusion in establishing rates.

Water and Wastewater Rates

Our regulated subsidiaries periodically seek rate increases to cover the cost of increased operating expenses, increased financing expenses due to additional investments in utility plant and other costs of doing business. In Delaware, utilities are permitted by law to place rates into effect, under bond, on a temporary basis pending completion of a rate increase proceeding. Any DSIC rate in effect will be reset to zero upon implementation of a temporary increase in base rates charged to customers. The first temporary increase may be up to the lesser of $2.5 million on an annual basis or 15% of gross water sales. Should the rate case not be completed within seven months, by law, the utility may put the entire requested rate relief, up to 15% of gross water sales, in effect under bond until a final resolution is ordered and placed into effect. If any such rates are found to be in excess of rates the DEPSC finds to be appropriate, the utility must refund customers the portion found to be in excess with interest. The timing of our rate increase requests is therefore dependent upon the estimated cost of the administrative process in relation to the investments and expenses that we hope to recover through the rate increase. We can provide no assurances that rate increase requests will be approved by applicable regulatory agencies and, if approved, we cannot guarantee that these rate increases will be granted in a timely or sufficient manner to cover the investments and expenses for which we initially sought the rate increase.

On April 28, 2023, Artesian Water filed a request with the DEPSC to implement new rates to meet a requested increase in revenue of 23.84%, or approximately $17.5 million, on an annualized basis. The actual effective increase is less than 23.84% since Artesian Water has been permitted to recover specific investments made in infrastructure through the assessment of a 7.50% DSIC. Since the DSIC rate is set to zero when temporary rates are placed into effect, customers would experience an incremental increase of 16.34%, the net of the overall 23.84% increase less the DSIC rate of 7.50% currently in effect, if the requested increase is granted in full by the DEPSC. The new rates are designed to support Artesian Water’s ongoing capital improvement program and to cover increased costs of operations, including chemicals and electricity for water treatment, water quality testing, fuel, taxes, interest, labor and benefits. In accordance with applicable Delaware law, Artesian Water is permitted to implement temporary rates of 15% of gross water sales on an annual basis, or $2.5 million, whichever is lower, 60 days after the application is filed. Since Artesian Water has DSIC surcharges in excess of the allowable temporary increase and imposing the temporary increase would require DSIC to be reset to zero, Artesian Water has elected not to request the initial temporary rate increase. However, should the application not be resolved within the seven-month statutory timeframe, Artesian Water would be permitted and plans to place into effect on November 28, 2023 temporary rates of up to 15% of gross water sales on an annual basis, subject to refund, until permanent rates are determined by the DEPSC. Artesian Water’s last comprehensive application for an increase in base rate charges was filed in April 2014.

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Other Proceedings

Delaware law permits water utilities to put into effect, on a semi-annual basis, increases related to specific types of distribution system improvements through a DSIC. This charge may be implemented by water utilities between general rate increase applications that normally recognize changes in a water utility's overall financial position. The DSIC approval process is less costly when compared to the approval process for general rate increase requests. The DSIC rate applied between base rate filings is capped at 7.50% of the amount billed to customers under otherwise applicable rates and charges, and the DSIC rate increase applied cannot exceed 5.0% within any 12-month period.

The following table summarizes (1) Artesian Water’s application with the DEPSC to collect DSIC rates and (2) the rate upon which eligible plant improvements are based:

Application Date	11/20/20
DEPSC Approval Date	12/14/20
Effective Date	01/01/21
Cumulative DSIC Rate	7.50%
Net Eligible Plant Improvements – Cumulative Dollars (in millions)	$43.1
Eligible Plant Improvements – Installed Beginning Date	10/01/2014
Eligible Plant Improvements – Installed Ending Date	04/30/2019

The rate reflects the eligible plant improvements installed through April 30, 2019. The January 1, 2021 rate currently remains in effect and is subject to periodic audit by the DEPSC. For the three and six months ended June 30, 2023, we earned approximately $1.3 million and $2.5 million in DSIC revenue, respectively. For the three and six months ended June 30, 2022, we earned approximately $1.3 million and $2.5 million in DSIC revenue, respectively.

NOTE 12 – INCOME TAXES

Deferred income taxes are provided in accordance with FASB ASC Topic 740 on all differences between the tax basis of assets and liabilities and the amounts at which they are carried in the consolidated financial statements based on the enacted tax rates expected to be in effect when such temporary differences are expected to reverse. The Company’s rate regulated subsidiaries recognize regulatory liabilities, to the extent considered in ratemaking, for deferred taxes provided in excess of the current statutory tax rate and regulatory assets for deferred taxes provided at rates less than the current statutory rate. Such tax-related regulatory assets and liabilities are reported at the revenue requirement level and amortized to income as the related temporary differences reverse, generally over the lives of the related properties.

Under FASB ASC Topic 740, an uncertain tax position represents our expected treatment of a tax position taken, or planned to be taken in the future, that has not been reflected in measuring income tax expense for financial reporting purposes. The Company establishes reserves for uncertain tax positions based upon management's judgment as to the sustainability of these positions. These accounting estimates related to the uncertain tax position reserve require judgments to be made as to the sustainability of each uncertain tax position based on its technical merits. The Company believes its tax positions comply with applicable law and that it has adequately recorded reserves as required. However, to the extent the final tax outcome of these matters is different than the estimates recorded, the Company would then adjust its tax reserves or unrecognized tax benefits in the period that this information becomes known. The statute of limitations for the 2018 tax returns lapsed during the third quarter of 2022, which resulted in the reversal of the reserve in the amount of approximately $212,000. The Company has elected to recognize accrued interest (net of related tax benefits) and penalties related to uncertain tax positions as a component of its income tax expense. During the third quarter of 2022, the Company reversed approximately $10,000 in penalties and interest leaving a zero balance. The Company remains subject to examination by federal and state authorities for the tax years 2019 through 2022.

Investment tax credits were deferred through 1986 and are recognized as a reduction of deferred income tax expense over the estimated economic useful lives of the related assets.

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NOTE 13 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value.

Current Assets and Liabilities

For those current assets and liabilities that are considered financial instruments, the carrying amounts approximate fair value because of the short maturity of those instruments.

Long-term Financial Liabilities

All of Artesian Resources’ outstanding long-term debt as of June 30, 2023 and December 31, 2022 was fixed-rate. The fair value of the Company’s long-term debt is determined by discounting their future cash flows using current market interest rates on similar instruments with comparable maturities consistent with FASB ASC 825. Under the fair value hierarchy, the fair value of the long-term debt in the table below is classified as Level 2 measurements. Level 2 is valued using observable inputs other than quoted prices. The fair values for long-term debt differ from the carrying values primarily due to interest rates that differ from the current market interest rates. The carrying amount and fair value of Artesian Resources' long-term debt (including current portion) are shown below:

(in thousands)
	June 30, 2023		December 31, 2022
Carrying amount	$	177,697	$	177,622
Estimated fair value	$	158,543	$	155,425

The fair value of Advances for Construction cannot be reasonably estimated due to the inability to estimate accurately the timing and amounts of future refunds expected to be paid over the life of the contracts. Refund payments are based on the water sales to new customers in the particular development constructed. The fair value of Advances for Construction would be less than the carrying amount because these financial instruments are non-interest bearing.

NOTE 14 – COMMON STOCK OFFERING

On May 23, 2023, the Company completed the sale of 695,650 shares of its Class A Stock, par value $1.00 per share, at a price to the public of $50 per share. The net proceeds to the Company from the offering, after deducting the underwriting discounts and commissions and other offering costs, are approximately $33.0 million. The Company also granted the underwriter a 30-day option to purchase up to an additional 104,348 shares of Class A Stock at the public offering price, less the underwriting discount. On June 16, 2023, the underwriter exercised its over-allotment option, to purchase 67,689 shares of Class A Stock at the public offering price. The net proceeds to the Company resulting from the exercise of the over-allotment option, after deducting the underwriting discounts and commissions and other offering costs, are approximately $3.2 million. All of the shares of Class A Stock sold in the offering were offered by the Company.

The proceeds from both the initial offering and the over-allotment option were used to repay short-term borrowings, including borrowings incurred under our lines of credit with Citizens Bank and CoBank, incurred primarily to finance capital expenditures, including investment in utility plant and equipment, and other general corporate purposes.

NOTE 15 – BUSINESS COMBINATIONS

As part of the Company’s growth strategy, on January 14, 2022 Artesian Wastewater completed its agreement to acquire TESI, which provides regulated wastewater services in Delaware. Artesian Wastewater purchased all of the stock of TESI from Middlesex Water Company for $6.4 million in cash and other consideration, including forgiveness of a $2.1 million note due from Middlesex, consisting of $3.1 million paid at closing. This acquisition more than doubled the number of wastewater customers served by Artesian in Sussex County, Delaware. The acquisition is being accounted for as a business combination under ASC Topic 805, “Business Combinations.” The purchase price allocation is primarily attributed to intangible assets and utility plant assets acquired and liabilities assumed based on their respective estimated fair values. The acquisition method of accounting requires, among other things, that assets acquired, and liabilities assumed in a business purchase combination be recognized at their fair values as of the acquisition date. The Company utilized a third-party valuation firm to assist with the fair value of the assets acquired. A combination of methods was used to determine the reasonableness of the purchase price: the cost approach and the comparative sales (market) approach. Given the majority of the net assets acquired were tangible utility plant assets and related contributions in aid of construction, the Company primarily utilized the cost approach to record the fair value of the assets as well as some of the assumed liabilities. This approach values the underlying assets to derive market value based on the estimated replacement cost, adjusted for depreciation. Real property was valued using the comparative sales approach. Goodwill was recognized primarily as a result of expected synergies of operations and interconnections to our existing utility plant infrastructure. Goodwill as a result of the transaction is not expected to be deductible for tax purposes.

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The TESI acquisition was approved by the DEPSC on October 27, 2021, subject to the DEPSC determining the appropriate ratemaking treatment of the acquisition price and the assets acquired in Artesian Wastewater’s next base rate case.

The results of operations for the three and six months ended June 30, 2023 and June 30, 2022 related to the business acquired are included in the Company’s condensed consolidated statements of operations.

The table below sets forth the final purchase price allocation of this acquisition as of December 31, 2022.

(in thousands)
		TESI
	Utility plant	$	25,354
	Cash		280
	Goodwill		1,939
	Other assets		1,033
	Total assets		28,606
	Less: Liabilities and contributions in aid of construction (CIAC)
	Liabilities		2,808
	CIAC		22,676
	Net cash purchase price	$	3,122

Additionally, as part of the Company’s growth strategy, on May 26, 2022, Artesian Water completed its purchase of substantially all of the water system operating assets from the Town of Clayton, or Clayton, a Delaware municipality located in Kent County, Delaware, including Clayton’s exclusive franchise territory and the right to provide water service to Clayton’s existing customers, or the Clayton Water System. The total purchase price was $5.0 million, less the current payoff amount of secured debt or debt associated with the Clayton Water System. At closing, Artesian Water paid approximately $3.4 million of the total purchase price. The remaining $1.6 million is payable in five equal annual installments on the anniversary date of the closing. The first installment payment was paid in May 2023. Each annual installment is payable with interest at an annual rate of 2.0%. The acquisition was accounted for as a business combination under ASC Topic 805. The purchase price allocation is $7.9 million of utility plant assets offset by $2.9 million of CIAC. The Company utilized similar valuation methodologies to those described above.

This transfer of Clayton’s exclusive franchise territory was approved by the DEPSC on April 20, 2022. The DEPSC will determine the appropriate ratemaking treatment of the acquisition price and the assets acquired in Artesian Water’s next base rate case. The pro forma effects of the business acquired are not material to the Company’s financial position or results of operations based on estimated annual revenue of approximately $0.5 million related to customers acquired.

As of December 31, 2022, the fair value determination for TESI and the water operating assets acquired from the Town of Clayton was finalized.

NOTE 16 – GEOGRAPHIC CONCENTRATION OF CUSTOMERS

Artesian Water, Artesian Water Maryland and Artesian Water Pennsylvania provide water utility service to customers within their established service territory in all three counties of Delaware and in portions of Maryland and Pennsylvania, pursuant to rates filed with and approved by the DEPSC, the MDPSC and the PAPUC. As of June 30, 2023, Artesian Water was serving approximately 95,400 customers, Artesian Water Maryland was serving approximately 2,600 customers and Artesian Water Pennsylvania was serving approximately 40 customers.

Artesian Wastewater and TESI provide wastewater utility service to customers within their established service territory in Sussex County, Delaware pursuant to rates filed with and approved by the DEPSC. As of June 30, 2023, the number of wastewater customers served was approximately 7,900, including one large industrial customer.

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NOTE 17 – BUSINESS SEGMENT INFORMATION

The Company’s operating segments are comprised of its businesses which generate revenues and incur expenses, for which separate operational financial information is available and is regularly evaluated by management for the purpose of making operating decisions, assessing performance, and allocating resources. The Company operates its businesses primarily through one reportable segment, the Regulated Utility segment. The Regulated Utility segment is the largest component of the Company’s business and includes an aggregation of our five regulated utility subsidiaries that are in the business of providing regulated water and wastewater services on the Delmarva Peninsula. Our regulated water utility services include treating, distributing, and selling water to residential, commercial, industrial, governmental, municipal and utility customers throughout the State of Delaware and in Cecil County, Maryland and to a residential community in Chester County, Pennsylvania. Our regulated wastewater utility services include the treatment and disposal of wastewater for customers in Sussex County, Delaware. The Company is subject to regulations as to its rates, services, and other matters by the states of Delaware, Maryland and Pennsylvania with respect to utility service within these states.

The Company also operates other non-utility businesses, primarily comprised of: Service Line Protection Plan services for water, sewer and internal plumbing; design, construction and engineering services; and contract services for the operation and maintenance of water and wastewater systems in Delaware and Maryland. These non-utility businesses do not individually or in the aggregate meet the criteria for disclosure of a reportable segment in accordance with generally accepted accounting principles and are collectively presented throughout this Quarterly Report on Form 10-Q within “Other” or “Non-utility”, which is consistent with how management assesses the results of these businesses.

The accounting policies of the operating segments are the same as those described in Note 2 – Basis of Presentation. The Regulated Utility segment includes inter-segment costs related to leased office space provided by one non-utility business, calculated on the lower of cost or market method, which are eliminated to reconcile to the Consolidated Statements of Operations. The Regulated Utility segment also allocates certain corporate costs to the non-utility businesses. The measurement of depreciation, interest, and capital expenditures are predominately related to our Regulated Utility segment. These amounts in our non-utility business are negligible and account for approximately less than 1% of consolidated amounts as of June 30, 2023 and June 30, 2022.

(in thousands)
	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Revenues:
Regulated Utility	$	23,668		$	22,636		$	44,501		$	43,305
Other (non-utility)		1,637			2,408			3,353			3,960
Inter-segment elimination		(54	)		(33	)		(108	)		(67	)
Consolidated Revenues	$	25,251		$	25,011		$	47,746		$	47,198

Operating Income:
Regulated Utility	$	6,066		$	6,526		$	9,824		$	10,864
Other (non-utility)		142			317			445			723
Consolidated Operating Income	$	6,208		$	6,843		$	10,269		$	11,587

Income Taxes:
Regulated Utility	$	1,303		$	1,570		$	2,370		$	2,813
Other (non-utility)		290			155			536			331
Consolidated Income Taxes	$	1,593		$	1,725		$	2,906		$	3,144

	June 30, 2023		December 31, 2022
Assets:
Regulated Utility	$	740,135	$	713,113
Other (non-utility)		9,988		6,678
Consolidated Assets	$	750,123	$	719,791

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NOTE 18 – LEGAL PROCEEDINGS

Periodically, we are involved in other proceedings or litigation arising in the ordinary course of business. We do not believe that the ultimate resolution of these matters will materially affect our business, financial position or results of operations. However, we cannot ensure that we will prevail in any litigation and, regardless of the outcome, may incur significant litigation expense and may have significant diversion of management attention.

On July 19, 2022, final judgment was entered by the United States District Court, or Court, for a Consent Decree between the Delaware Sand and Gravel Remedial Trust, or Trust, and the United States Environmental Protection Agency, or USEPA, that governs the implementation of Amendment No 2 to the USEPA’s 1988 Record of Decision for the Delaware Sand & Gravel Landfill Superfund Site, or Site, located in New Castle County, Delaware, issued on December 12, 2017, or ROD Amendment No. 2, confirming, among other things, the terms and conditions set forth in a Settlement Agreement upon which The Chemours Company FC, LLC, Hercules, LLC, Waste Management of Delaware, Inc., SC Holdings, Inc., Cytec Industries, Inc., Zeneca Inc., and Bayer CropScience Inc., collectively the Percentage Settlors, and the Trust, on one hand, and Artesian Water, on the other hand, have agreed to resolve certain of Artesian Water’s claims and issues relating to releases of contaminants from the Site.

ROD Amendment No. 2 sets forth the remedy for the contamination existing at and emanating from the Site, or the Remedy, to address a release of contaminants of concern and of emerging concern, or COC’s, from the Site into groundwater. Artesian Water has found in groundwater that Artesian Water uses for public potable water supply certain COC’s that the Remedy is designed to address, as a result of which Artesian has incurred, and potentially will incur additional, capital and operating costs to treat the groundwater to meet applicable drinking water standards. The Remedy includes requirements that are directly linked to Artesian’s continued operation of the treatment plant associated with groundwater around the Site.

As set forth in the Settlement Agreement, Artesian Water shall have access to financial assurances that the Percentage Settlors have provided, or will provide, to the USEPA in connection with the Consent Decree governing the implementation of the Remedy. In addition, the Trust shall reimburse Artesian Water for past capital and operating costs, totaling approximately $10.0 million. Approximately $2.5 million was paid in each of August 2022 and July 2023, and the remaining $5.0 million is payable in two equal installments annually on the second and third anniversary date of the Court’s approval of the Consent Decree. In addition, the Trust shall reimburse Artesian Water for documented reasonable and necessary capital and operating costs after July 1, 2021 that Artesian Water incurs to treat Site-related COC’s. Any reimbursements Artesian Water receives from the Trust shall be subject to final determination by the DEPSC as to the appropriate regulatory rate-making treatment. Artesian Water received approval from the DEPSC in October 2022 to refund the reimbursements for past capital and operating costs to its customers. The refund for the reimbursements will be applied to current and future customer bills in annual installments. The first refund occurred in October 2022, and future customer refunds will occur no later than August of each year from 2023 through 2025. The amount of the credit is calculated by dividing the amount of the reimbursement by the number of eligible customers. Artesian Water will record 2022 and future recovery of capital expenditures as Contributions in Aid of Construction and will record expense recovery as an offset to operations and maintenance expense, with the intention that those recoveries will then be available for inclusion and consideration in any future rate applications. The Trust’s reimbursement of such costs shall end if and when, based upon testing information from the Trust’s Remedy facilities and Artesian Water’s facilities, treatment of Site-related COC’s is no longer necessary for Artesian Water to meet the treatment levels that Artesian Water chooses to not exceed in water it distributes to the general public throughout its service territory to provide a margin of safety in complying with applicable drinking water standards.

NOTE 19 – IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

There was no new guidance issued by the FASB during the six months ended June 30, 2023 that is applicable to the Company.

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ITEM 2

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Statements in this Quarterly Report on Form 10-Q that express our "belief," "anticipation" or "expectation," as well as other statements that are not historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act and the Private Securities Litigation Reform Act of 1995. Statements regarding our goals, priorities, growth and expansion plans and expectation for our water and wastewater subsidiaries and non-regulated subsidiaries, customer base growth opportunities in Delaware and Cecil County, Maryland, our belief regarding the timing and results of our rate requests, our belief regarding our capacity to provide water services for the foreseeable future to our customers, our belief relating to our compliance and the cost to achieve compliance with relevant governmental regulations, our expectation of the timing of decisions by regulatory authorities, the impact of weather on our operations and the execution of our strategic initiatives, our expectation of the timing for construction on new projects, our expectation relating to the adoption of recent accounting pronouncements, contract operations opportunities, legal proceedings, our properties, deferred tax assets, adequacy of our available sources of financing, the expected recovery of expenses related to our long-term debt, our expectation to be in compliance with financial covenants in our debt instruments, our ability to refinance our debt as it comes due, our ability to adjust our debt level, interest rate, maturity schedule and structure, the timing and terms of renewals of our lines of credit, plans to increase our wastewater treatment operations, engineering services and other revenue streams less affected by weather, expected future contributions to our postretirement benefit plan, anticipated growth in our non-regulated division, the impact of recent acquisitions on our ability to expand and foster relationships, anticipated investments in certain of our facilities and systems and the sources of funding for such investments, and the sufficiency of internally generated funds and credit facilities to provide working capital and our liquidity needs are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties that could cause actual results to differ materially from those projected. Words such as "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates", "projects", "forecasts", "may", "should", variations of such words and similar expressions are intended to identify such forward-looking statements. Certain factors as discussed under Item 1A - Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2022, and this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, such as changes in weather, changes in our contractual obligations, changes in government policies, the timing and results of our rate requests, failure to receive regulatory approval, changes in economic and market conditions generally, and other matters could cause results to differ materially from those in the forward-looking statements. While the Company may elect to update forward-looking statements, we specifically disclaim any obligation to do so and you should not rely on any forward-looking statement as a representation of the Company's views as of any date subsequent to the date of the filing of this Quarterly Report on Form 10-Q.

RESULTS OF OPERATIONS FOR THE PERIOD ENDED JUNE 30, 2023

OVERVIEW

Our profitability is primarily attributable to the sale of water and wastewater services in our regulated utility business. Our regulated utility segment comprised 93.2% of total operating revenues for the six months ended June 30, 2023 and 91.8% for the six months ended June 30, 2022. Water sales are subject to seasonal fluctuations, particularly during summer when water demand may vary with rainfall and temperature. In the event temperatures during the typically warmer months are cooler than expected, or rainfall is greater than expected, the demand for water may decrease and our revenues may be adversely affected. We believe these effects of weather are short term and do not materially affect the execution of our strategic initiatives. Our wastewater services provide a revenue stream that is not affected by these changes in weather patterns. We continue to seek growth opportunities to provide wastewater services in Delaware and the surrounding areas.

Our profitability is also attributed to other non-utility business, such as various contract operations, water, sewer and internal SLP Plans and other services we provide. Our contract operations, SLP Plans and other services also provide a revenue stream that is not affected by changes in weather patterns. We also continue to explore and develop relationships with developers and municipalities in order to increase revenues from contract water and wastewater operations, wastewater management services, and design, construction and engineering services. We plan to continue developing and expanding our contract operations and other services in a manner that complements our growth in water service to new customers. Our anticipated growth in these areas is subject to changes in residential and commercial construction, which may be affected by interest rates, inflation and general housing and economic market conditions. We anticipate continued growth in our non-utility subsidiaries due to our water, sewer, and internal SLP Plans.

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Inflation

We are affected by inflation, most notably by the continually increasing costs required to maintain, improve and expand our service capability. The cumulative effect of inflation results in significantly higher facility replacement costs which must be recovered from future cash flows. Our ability to recover increases in investments in facilities is dependent upon future rate increases, which are subject to approval by the applicable regulatory authority. We can provide no assurances that any future rate increase request will be approved, and if approved, we cannot guarantee that any rate increase will be granted in a timely manner and/or will be sufficient in amount to cover costs for which we initially sought the rate increase. The impact of inflation could adversely affect our results of operations, financial position or cash flows.

Materials and Supplies

We are highly dependent on the availability of essential materials and parts from our suppliers for expansion, construction and maintenance of our services. The majority of the materials required for our water and wastewater utility business are typically under contract at fixed prices, however, supply chain issues associated with the COVID-19 pandemic resulted in price increases and delays in procuring certain materials and equipment in 2021 and 2022. We successfully minimized these delays with thorough planning and pre-ordering. However, there is no assurance that our future financial results or business operations will not be negatively affected.

Regulated Water Subsidiaries

Artesian Water, Artesian Water Maryland and Artesian Water Pennsylvania provide water service to residential, commercial, industrial, governmental, municipal and utility customers. Increases in the number of customers contribute to increases, or help to offset any intermittent decreases, in our operating revenue. As of June 30, 2023, the number of metered water customers in Delaware increased approximately 1.5% compared to June 30, 2022. The number of metered water customers in Maryland increased approximately 0.7% compared to June 30, 2022. The number of metered water customers in Pennsylvania remained consistent compared to June 30, 2022. For the six months ended June 30, 2023, approximately 4.2 billion gallons of water were distributed in our Delaware systems and approximately 51.7 million gallons of water were distributed in our Maryland systems.

Regulated Wastewater Subsidiaries

Artesian Wastewater and TESI own wastewater collection and treatment infrastructure and provide regulated wastewater services to customers in Sussex County, Delaware. Artesian Wastewater Maryland is able to provide regulated wastewater services to customers in Maryland. It is not currently providing these services in Maryland. The majority of our residential and commercial wastewater customers are billed a flat monthly fee, and our large industrial wastewater customer is billed monthly based on wastewater flow, which contributes to providing a revenue stream unaffected by weather. As of June 30, 2023, the number of Delaware wastewater customers increased approximately 8.1% compared to June 30, 2022.

Non-Utility Subsidiaries

Artesian Utility provides contract water and wastewater operation services to private, municipal, and governmental institutions. Artesian Utility also offers three protection plans to customers, the WSLP Plan, the SSLP Plan, and the ISLP Plan. SLP Plan customers are billed a flat monthly or quarterly rate, which contributes to providing a revenue stream unaffected by weather. There has been consistent customer growth over the years. As of June 30, 2023, the eligible customers enrolled in the WSLP Plan, the SSLP Plan and the ISLP Plan increased 4.8%, 3.3% and 8.2%, respectively, compared to June 30, 2022. The non-utility customers enrolled in one of our three protection plans decreased 2.9%.

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Strategic Direction and Recent Developments

Our strategy is to increase customer growth, revenues, earnings and dividends by expanding our water, wastewater and SLP Plan services across the Delmarva Peninsula. We remain focused on providing superior service to our customers and continuously seek ways to improve our efficiency and performance. Our strategy has included a focus on building strategic partnerships with county governments, municipalities and developers. By providing water and wastewater services, we believe we are positioned as the primary resource for developers and communities throughout the Delmarva Peninsula seeking to fill both needs simultaneously. We believe we have a proven ability to acquire and integrate high growth, reputable entities, through which we have captured additional service territories that will serve as a base for future revenue. We believe this experience presents a strong platform for further expansion and that our success to date also produces positive relationships and credibility with regulators, municipalities, developers and customers in both existing and prospective service areas.

In our regulated water subsidiaries, our strategy is to focus on a wide spectrum of activities, which include strategic acquisitions of existing systems, expanding certificated service area, identifying new and dependable sources of supply, developing the wells, treatment plants and delivery systems to supply water to customers and educating customers on the wise use of water. Our strategy includes focused efforts to expand through strategic acquisitions and in new regions added to our Delaware service territory over the last 10 years. We plan to expand our regulated water service area in the Cecil County designated growth corridor and to expand our business through the design, construction, operation, management and acquisition of additional water systems. The expansion of our exclusive franchise areas elsewhere in Maryland and the award of contracts will similarly enhance our operations within the state.

Our ability to develop partnerships with various county governments, municipalities and developers has provided a number of opportunities. In the last four years, we completed seven acquisitions including asset purchase agreements with municipal and developer/homeowner association operated systems.

We believe that Delaware's generally lower cost of living in the region and availability of development sites in relatively close proximity to the Atlantic Ocean in Sussex County have resulted, and will continue to result, in increases to our customer base. Delaware’s lower property and income tax rate make it an attractive region for new home development and retirement communities. Substantial portions of Delaware currently are not served by a public water system, which could also assist in an increase to our customer base as systems are added.

On May 26, 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, including Clayton’s exclusive franchise territory and the right to provide water service to Clayton’s existing customers, or the Clayton Water System. The total purchase price was $5.0 million, less the current payoff amount of secured debt or debt associated with the Clayton Water System. This transfer of Clayton’s exclusive franchise territory was approved by the DEPSC on April 20, 2022.

In our regulated wastewater subsidiaries, we foresee significant growth opportunities and will continue to seek strategic partnerships and relationships with developers and governmental agencies to complement existing agreements for the provision of wastewater service on the Delmarva Peninsula. There are numerous locations in Sussex County where Artesian Wastewater’s and Sussex County’s facilities are connected or integrated to allow for the movement and disposal of wastewater generated by one or the other’s system in a manner that most efficiently and cost effectively manages wastewater transmission, treatment and disposal. In addition, Artesian Wastewater plans to utilize our larger regional wastewater facilities to expand service areas to new customers while transitioning our smaller treatment facilities into regional pump stations in order to gain additional efficiencies in the treatment and disposal of wastewater. We believe this will reduce operational costs at the smaller treatment facilities in the future because they will be converted from treatment and disposal plants to pump stations to assist with transitioning the flow of wastewater from one regional facility to another. In addition, since closing the transaction with TESI noted below, Artesian’s Delaware wastewater subsidiaries are the sole regional regulated wastewater utilities in Delaware, which we believe will enable us to increase efficiencies in the treatment and disposal of wastewater and provide additional opportunities to expand our wastewater operations.

On January 14, 2022, Artesian Wastewater acquired TESI, a wholly-owned subsidiary of Middlesex Water Company, or Middlesex, that provides regulated wastewater services in Delaware. Artesian Wastewater purchased all of the stock of TESI from 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 in Sussex County, Delaware and included all residents in the Town of Milton.

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The general need for increased capital investment in our water and wastewater systems is due to a combination of population growth, more protective water quality standards, aging infrastructure and acquisitions. Our planned and budgeted capital improvements over the next three years include projects for water infrastructure improvements and expansion in both Delaware and Maryland and wastewater infrastructure improvements and expansion in Delaware. The DEPSC and MDPSC have generally recognized the operating and capital costs associated with these improvements in setting water and wastewater rates for current customers and capacity charges for new customers.

In our non-utility subsidiaries, we continue pursuing opportunities to expand our contract operations. Through Artesian Utility, we will seek to expand our contract design, engineering and construction services of water and wastewater facilities for developers, municipalities and other utilities. We also anticipate continued growth due to our water, sewer and internal SLP Plans. Artesian Development owns two nine-acre parcels of land, located in Sussex County, Delaware, which will allow for construction of a water treatment facility and wastewater treatment facility.

Results of Operations – Analysis of the Three Months Ended June 30, 2023 Compared to the Three Months Ended June 30, 2022.

Operating Revenues

Revenues totaled $25.3 million for the three months ended June 30, 2023, $0.2 million, or 1.0%, more than revenues for the three months ended June 30, 2022. Water sales revenue increased $0.9 million, or 4.6%, for the three months ended June 30, 2023 from the corresponding period in 2022, primarily related to an increase in overall water consumption due to the brief warm, dry weather conditions experienced during the quarter and an increase in fixed fee charges related to customer growth. We realized 81.7% and 78.9% of our total operating revenue for the three months ended June 30, 2023 and June 30, 2022, respectively, from the sale of water.

Other utility operating revenue increased approximately $0.1 million, or 4.0%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. This increase is primarily due to an increase in wastewater revenue associated with customer growth.

Non-utility operating revenue decreased approximately $0.8 million, or 33.3%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. This decrease is primarily due to a decrease in contract service revenue related to a contract for the design and construction of wastewater infrastructure, slightly offset by an increase in Service Line Protection Plan revenue.

Operating Expenses

Operating expenses, excluding depreciation and income taxes, increased $0.8 million, or 6.3%, for the three months ended June 30, 2023, compared to the same period in 2022.

Utility operating expenses increased $1.6 million, or 15.5%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The net increase is primarily related to the following;

Payroll and employee benefit costs increased $0.6 million, primarily related to an increase in overall compensation, an increase in the number of employees and an increase in medical benefit costs.

Repair and maintenance costs increased $0.5 million, primarily associated with water treatment and distribution operations, including tank painting costs and filter replacement costs, and wastewater treatment and disposal operations.

Water treatment costs increased $0.2 million, primarily due to an increase in the cost and volume of chemicals used.

Administrative costs increased $0.2 million, primarily due to an increase in company subscription costs, customer billing and assistance program costs and legal fees.

Purchased power costs increased $0.1 million due to an increase in usage in wastewater and water operations.

Purchased water costs decreased $0.1 million, primarily related to a decrease of water purchased under contract, in which the minimum amount of water required to be purchased was reduced in July 2022.

Non-utility operating expenses decreased $0.8 million primarily due to a decrease in costs associated with a wastewater infrastructure design and construction contract.

The ratio of operating expense, excluding depreciation and income taxes, to total revenue was 56.4% for the three months ended June 30, 2023, compared to 53.5% for the three months ended June 30, 2022.

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Depreciation and amortization expense increased $0.2 million, or 5.2%, primarily due to continued investment in utility plant providing supply, treatment, storage and distribution of water to customers and service to our wastewater customers.

Federal and state income tax expense decreased $0.1 million, or 7.7%, primarily due to lower pre-tax income in 2023 compared to 2022, partially offset by a decrease in 2022 income tax expense related to stock options exercised in the second quarter of 2022, with no similar activity in 2023.

Property and other taxes increased $0.1 million, or 5.2%, primarily due to an increase in utility plant subject to taxation. Property taxes are assessed on land, buildings and certain utility plant, which include the footage and size of pipe, hydrants and wells. In addition, payroll taxes increased, related to increased payroll related expenses.

Other Income

Other income increased $0.3 million, primarily due an increase in allowance for funds used during construction, or AFUDC, as a result of higher long-term construction activity subject to AFUDC for the three months ended June 30, 2023 compared to the same period in 2022.

Interest Charges

Short-term debt interest increased $0.1 million, primarily related to higher interest rates. The average short-term interest rate for the three months ended June 30, 2023 was 5.87% compared to 1.68% for the same period in 2022. Long-term debt interest increased $0.1 million, primarily related to an increase in long-term debt interest associated with the Series W First Mortgage Bond issued on April 29, 2022.

Net Income

Our net income applicable to common stock decreased $0.6 million, or 12.0%. Total operating revenues increased $0.2 million and other income increased $0.3 million, offset by a $0.9 million increase in total operating expenses and $0.2 million increase in interest charges.

Results of Operations – Analysis of the Six Months Ended June 30, 2023 Compared to the Six Months Ended June 30, 2022.

Operating Revenues

Revenues totaled $47.7 million for the six months ended June 30, 2023, $0.5 million, or 1.2%, more than revenues for the six months ended June 30, 2022. Water sales revenue increased $0.8 million, or 2.1%, for the six months ended June 30, 2023 from the corresponding period in 2022, primarily related to an increase in overall water consumption due to the brief warm, dry weather conditions experienced during the second quarter of 2023 and an increase in fixed fee charges related to customer growth. This increase is partially offset by a decrease in water sales related to a one-time customer refund issued to Town of Frankford customers for a rate change retroactive to February 2022, as approved by the DEPSC in the first quarter of 2023, in accordance with the agreement for the purchase of Frankford’s water assets. We realized 81.0% and 80.2% of our total operating revenue for the six months ended June 30, 2023 and June 30, 2022, respectively, from the sale of water.

Other utility operating revenue increased approximately $0.4 million, or 7.5%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. This increase is primarily due to an increase in wastewater revenue associated with customer growth.

Non-utility operating revenue decreased approximately $0.6 million, or 16.6%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. This decrease is primarily due to a decrease in contract service revenue related to a contract for the design and construction of wastewater infrastructure, partially offset by an increase in Service Line Protection Plan revenue.

Operating Expenses

Operating expenses, excluding depreciation and income taxes, increased $1.8 million, or 6.9%, for the six months ended June 30, 2023, compared to the same period in 2022.

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Utility operating expenses increased $2.3 million, or 11.3%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The net increase is primarily related to the following.

Payroll and employee benefit costs increased $1.3 million, primarily related to an increase in overall compensation, an increase in the number of employees and an increase in medical benefit costs.

Repair and maintenance costs increased $0.8 million, primarily associated with water treatment and distribution operations, including tank painting costs and technology costs, and wastewater treatment and disposal operations, including a one-time acquisition adjustment related to TESI in 2022. These increases are partially offset by a decrease in water treatment filter replacements, due to the timing of scheduled replacements.

Water treatment costs increased $0.4 million, primarily due to an increase in the cost and volume of chemicals used.

Administrative costs increased $0.3 million, primarily due to an increase in company subscription costs, a one-time adjustment related to the TESI acquisition in 2022, customer billing and assistance program costs and legal fees.

Purchased power costs increased $0.2 million due to an increase in usage in wastewater and water operations.

Purchased water costs decreased $0.6 million, primarily related to a decrease of water purchased under contract, in which the minimum amount of water required to be purchased was reduced in July 2022.

Non-utility operating expenses decreased $0.6 million primarily due to a decrease in costs associated with a wastewater infrastructure design and construction contract.

The ratio of operating expense, excluding depreciation and income taxes, to total revenue was 58.9% for the six months ended June 30, 2023, compared to 55.8% for the six months ended June 30, 2022.

Depreciation and amortization expense increased $0.3 million, or 4.9%, primarily due to continued investment in utility plant providing supply, treatment, storage and distribution of water to customers and service to our wastewater customers.

Federal and state income tax expense decreased $0.2 million, or 7.6%, primarily due to lower pre-tax income in 2023 compared to 2022, partially offset by a decrease in 2022 income tax expense related to stock options exercised in the first six months of 2022, with no similar activity in 2023.

Other Income

Other income increased $0.7 million, primarily due to a $0.5 million increase in allowance for funds used during construction, or AFUDC, as a result of higher long-term construction activity subject to AFUDC for the six months ended June 30, 2023 compared to the same period in 2022. Miscellaneous income increased $0.2 million primarily related to an increase in the annual patronage refund from CoBank, ACB. The primary refund calculation for both 2023 and 2022 was based on the average loan balance outstanding.

Interest Charges

Long-term debt interest increased $0.4 million, primarily related to an increase in long-term debt interest associated with the Series W First Mortgage Bond issued on April 29, 2022. Short-term debt interest increased $0.3 million, primarily related to higher interest rates. The average short-term interest rate for the six months ended June 30, 2023 was 5.94% compared to 1.84% for the same period in 2022.

Net Income

Our net income applicable to common stock decreased $1.4 million, or 14.5%. Total operating revenues increased $0.5 million and other income increased $0.7 million, offset by a $1.9 million increase in total operating expenses and $0.8 million increase in interest charges.

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LIQUIDITY AND CAPITAL RESOURCES

Overview

Our primary sources of liquidity for the six months ended June 30, 2023 were $15.2 million of cash provided by operating activities, $10.1 million in net contributions and advances from developers, which includes $2.7 million of grant funds from the State of Delaware, $1.2 million from the issuance of long-term debt and $36.4 million in net proceeds from the issuance of Class A Stock. On May 23, 2023 and June 16, 2023, the Company completed the sale of 695,650 shares and 67,689 shares of its Class A Stock, respectively. Cash flow from operating activities is primarily provided by our utility operations, and is impacted by the timeliness and adequacy of rate increases and changes in water consumption as a result of customer growth levels and year-to-year variations in weather conditions, particularly during the summer. A significant part of our ability to maintain and meet our financial objectives is to ensure that our investments in utility plant and equipment are recovered in the rates charged to customers. As such, from time to time, we file rate increase requests to recover increases in operating expenses and investments in utility plant and equipment. See Note 11 – Regulatory Proceedings. We will continue to borrow on available lines of credit in order to satisfy current liquidity needs. In addition, the Company has a long history of paying regular quarterly dividends as approved by our Board of Directors using net cash from operating activities.

Investment in Plant and Systems

The primary focus of our investments is to continue to provide high quality reliable service to our growing service territory. Capital expenditures during the first six months of 2023 were $32.3 million compared to $23.3 million during the same period in 2022. During the first six months of 2023, we continued to focus our investment through our rehabilitation program for transmission and distribution facilities by replacing aging or deteriorating mains, installation of new mains, enhancing or improving existing treatment facilities, construction of new water storage tanks, and replacing aging wells and pumping equipment to better serve our customers. Developers contributed $3.7 million of these total investments during the first six months of 2023.

We depend on the availability of capital for expansion, construction and maintenance. We rely on our sources of liquidity to finance our investments in utility plant and to meet our various payment obligations. We estimate that future investments will be financed by our operations and external sources, including short-term borrowings under our revolving credit agreements discussed below. We expect to fund our activities for the next twelve months using our available cash balances, bank credit lines, projected cash generated from operations, state revolving fund loans and capital market financing. We believe that internally generated funds along with existing credit facilities will be adequate to provide sufficient working capital to maintain normal operations and to meet our financing requirements. However, because part of our business strategy is to expand through strategic acquisitions, we may seek additional debt financing or issue additional equity securities to finance future acquisitions or for other purposes. There is no assurance that we will be able to secure funding on terms acceptable to us, or at all. Our cash flows from operations are primarily derived from water sales revenues and may be materially affected by changes in water sales due to weather and the timing and extent of increases in rates approved by state public service commissions.

Lines of Credit and Long-Term Debt

At June 30, 2023, Artesian Resources had a $40 million line of credit with Citizens Bank, or Citizens, which is available to all subsidiaries of Artesian Resources. As of June 30, 2023, there was $40.0 million of available funds under this line of credit. The previous interest rate for borrowings under this line was the London Interbank Offered Rate, or LIBOR, plus 1.00%. The LIBOR rate for USD currency was discontinued as of June 30, 2023. As a result, effective May 20, 2022, this line of credit agreement was amended to replace LIBOR with the Daily Secured Overnight Financing Rate, or SOFR. The interest rate is a one-month SOFR plus 10 basis points, or Term SOFR, plus an applicable margin of 0.85%, which was increased to 1.10% effective August 3, 2023. Term SOFR cannot be less than 0.00%. This is a demand line of credit and therefore the financial institution may demand payment for any outstanding amounts at any time. The term of this line of credit expires on the earlier of May 20, 2024 or any date on which Citizens demands payment. The Company expects to renew this line of credit.

At June 30, 2023, Artesian Water had a $20 million line of credit with CoBank, ACB, or CoBank, that allows for the financing of operations for Artesian Water, with up to $10 million of this line available for the operations of Artesian Water Maryland. As of June 30, 2023, there was $20.0 million of available funds under this line of credit. The previous interest rate for borrowings under this line allowed the Company to select either LIBOR plus 1.50% or a weekly variable rate established by CoBank; the Company historically used the weekly variable interest rate. In October 2022, this line of credit was amended to replace the previous interest rate options with a daily SOFR rate plus 1.45% option or a term SOFR rate plus 1.45% option that is locked in for either one or three months. The term of this line of credit expires on October 29, 2023. Artesian Water expects to renew this line of credit.

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The Company’s material cash requirements include the following lines of credit commitments and contractual obligations:

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Material Cash Requirements	Payments Due by Period
In thousands	Less than 1 Year		1-3 Years		4-5 Years		After 5 Years		Total
First mortgage bonds (principal and interest)	$	7,902	$	15,714	$	40,610	$	204,564	$	268,790
State revolving fund loans (principal and interest)		1,071		1,760		1,602		7,144		11,577
Promissory note (principal and interest)		960		1,923		1,923		10,133		14,939
Asset purchase contractual obligation (principal and interest)		339		659		320		---		1,318
Lines of credit		---		---		---		---		---
Operating leases		34		68		68		1,402		1,572
Operating agreements		76		111		112		760		1,059
Unconditional purchase obligations		827		1,539		388		---		2,754
Tank painting contractual obligation		626		626		---		---		1,252
Total contractual cash obligations	$	11,835	$	22,400	$	45,023	$	224,003	$	303,261

Artesian’s long-term debt agreements and revolving lines of credit contain customary affirmative and negative covenants that are binding on us (which are in some cases subject to certain exceptions), including, but not limited to, restrictions on our ability to make certain loans and investments, guarantee certain obligations, enter into, or undertake, certain mergers, consolidations or acquisitions, transfer certain assets or change our business. As of June 30, 2023, we were in compliance with these covenants.

Long-term debt obligations reflect the maturities of certain series of our first mortgage bonds, which we intend to refinance when due if not refinanced earlier. One first mortgage bond is subject to redemption in a principal amount equal to $150,000 plus interest per calendar quarter. The state revolving fund loan obligation and promissory note obligation have an amortizing mortgage payment payable over a 20-year period. The first mortgage bonds, the state revolving fund loan and the promissory note have certain financial covenant provisions, the violation of which could result in default and require the obligation to be immediately repaid, including all interest. We have not experienced conditions that would result in our default under these agreements.

The asset purchase contractual obligation is related to the purchase of substantially all of the water operating assets from the Town of Clayton, or Clayton, in May 2022, by Artesian Water. The total purchase price was $5.0 million. At closing, Artesian Water paid approximately $3.4 million. The remaining $1.6 million is payable in five equal annual installments on the anniversary date of the closing date. Each annual installment is payable with interest at an annual rate of 2.0%.

In order to control purchased power cost, in February 2021, Artesian Water entered into an electric supply contract with MidAmerican that is effective from May 2021 to May 2025. The fixed rate was lowered 5.6% starting in May 2021. In February 2022, Artesian Water Maryland entered into an electric supply agreement with Constellation NewEnergy, Inc., effective from May 2022 through November 2025. In January 2022, following the acquisition of Tidewater Environmental Services, Inc., TESI dba Artesian Wastewater assumed an electricity supply contract with WGL Energy that is effective through December 2024. These fixed rate electric supply contracts are for normal purchases and are not derivative instruments.

Payments for unconditional purchase obligations reflect minimum water purchase obligations based on rates that are subject to change under an interconnection agreement with the 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 required us to purchase water on a step-down schedule through July 5, 2022, and requires us to purchase a minimum of 0.5 million gallons per day. In addition, payments for unconditional purchase obligations reflect minimum water purchase obligations based on a contract rate under our interconnection agreement with the Town of North East, which expires June 26, 2024.

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.

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Critical Accounting Estimates; Recent Accounting Pronouncements

This discussion and analysis of our financial condition and results of operations is based on the accounting policies used and disclosed in our 2022 consolidated financial statements and accompanying notes that were prepared in accordance with accounting principles generally accepted in the United States of America and included as part of our annual report on Form 10-K for the year ended December 31, 2022. The preparation of those financial statements required management to make assumptions and estimates that affected the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements as well as the reported amounts of revenues and expenses during the reporting periods. Actual amounts or results could differ from those based on such assumptions and estimates.

Our critical accounting estimates are described in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our annual report on Form 10-K for the year ended December 31, 2022. There have been no changes in our critical accounting estimates. Our significant accounting policies are described in our notes to the 2022 consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2022.

Information concerning our implementation and the impact of recent accounting pronouncements issued by the FASB is included in the notes to our 2022 consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2022 and also in the notes to our unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q. We did not adopt any accounting policy in the first six months of 2023 that had a material impact on our financial condition, liquidity or results of operations.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to the risk of fluctuating interest rates in the normal course of business. Our policy is to manage interest rates through the use of fixed rate long-term debt and, to a lesser extent, short-term debt. The Company's exposure to interest rate risk related to existing fixed rate, long-term debt is due to the term of the majority of our First Mortgage Bonds and the term of the promissory note, which have final maturity dates ranging from 2028 to 2049, and interest rates ranging from 4.24% to 5.96%, which exposes the Company to interest rate risk as interest rates may drop below the existing fixed rate of the long-term debt prior to such debt’s maturity. In addition, the Company has interest rate exposure on $60 million of variable rate lines of credit, with two banks. As of June 30, 2023 there were not any outstanding balances on the lines of credit. An increase in the variable interest rates has resulted and is expected to continue to result in an increase in the cost of borrowing on these variable rate lines of credit. Also, changes in SOFR could affect our operating results and liquidity. We are also exposed to market risk associated with changes in commodity prices. Our risks associated with price increases in chemicals, electricity and other commodities are mitigated by our ability to recover our costs through rate increases to our customers. We have also sought to mitigate future significant electric price increases by signing multi-year supply contracts at fixed prices.

ITEM 4 – CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based upon this evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective in providing reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (1) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In addition, the Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective to achieve the foregoing objectives. A control system cannot provide absolute assurance, however, that the objectives of the control system are met and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

(b) Change in Internal Control over Financial Reporting

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No change in our internal control over financial reporting occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

ITEM 1A – RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022, which could materially affect our business, financial condition or future results. There have been no material changes to the risk factors described in such Annual Report on Form 10-K.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 – MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5 – OTHER INFORMATION

None of the Company’s directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended June 30, 2023.

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ITEM 6 - EXHIBITS

Exhibit No.	Description

1.1	Underwriting Agreement, dated as of May 19, 2023, by and between Artesian Resources Corporation and Janney Montgomery Scott LLC incorporated by reference to Exhibit 1.1 filed with the Company’s Form 8-K filed on May 23, 2023.

3.1	Amended and Restated By-laws of Artesian Resources Corporation incorporated by reference to Exhibit 3.1 filed with the Company’s Form 8-K filed on November 23, 2020.

3.2	Restated Certificate of Incorporation of the Company effective April 28, 2004 incorporated by reference to Exhibit 3.1 filed with the Company’s Form 10-Q for the quarterly period ended March 31, 2004.

10.1	Amended and Restated Demand Line of Credit Agreement between Artesian Resources Corporation, and Citizens Bank, N.A. dated August 3, 2023. *

31.1	Certification of Chief Executive Officer of the Registrant required by Rule 13a–14(a) under the Securities Exchange Act of 1934, as amended.*

31.2	Certification of Chief Financial Officer of the Registrant required by Rule 13a–14(a) under the Securities Exchange Act of 1934, as amended.*

32	Certification of Chief Executive Officer and Chief Financial Officer required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. Section 1350).**

101.BAL	Inline XBRL Condensed Consolidated Balance Sheets (unaudited)*
101.OPS	Inline XBRL Condensed Consolidated Statements of Operations (unaudited)*

101.CSH	Inline XBRL Condensed Consolidated Statements of Cash Flows (unaudited)*

101.NTS	Inline XBRL Notes to the Condensed Consolidated Financial Statements (unaudited)*

104	The cover page from Artesian Resources Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, formatted in Inline XBRL (contained in exhibit 101).*

* Filed herewith

** Furnished herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ARTESIAN RESOURCES CORPORATION

Date: August 8, 2023	By:	/s/ DIAN C. TAYLOR
		Dian C. Taylor (Principal Executive Officer)

Date: August 8, 2023	By:	/s/ DAVID B. SPACHT
		David B. Spacht (Principal Financial Officer)

* Filed herewith

** Furnished herewith

Exhibit 31.1
Certification of Chief Executive Officer of Artesian Resources Corporation required by Rule 13a – 14 (a) under the Securities Act of 1934, as amended

I, Dian C. Taylor, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2023 of Artesian Resources Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)		Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)		Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: Augsut 8, 2023			/s/ DIAN C. TAYLOR
			Dian C. Taylor
			Chief Executive Officer (Principal Executive Officer)

Exhibit 31.2

Certification of Chief Financial Officer of Artesian Resources Corporation required by Rule 13a – 14 (a) under the Securities Act of 1934, as amended

I, David B. Spacht, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2023 of Artesian Resources Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)		Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)		Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



Date: August 8, 2023			/s/ DAVID B. SPACHT
			David B. Spacht
			Chief Financial Officer (Principal Financial Officer)

Exhibit 32


Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350


I, Dian C. Taylor, Chief Executive Officer, and David B. Spacht, Chief Financial Officer, of Artesian Resources Corporation, a Delaware corporation (the "Company"), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, based on our knowledge:

(1)	The Company's Quarterly Report on Form 10-Q for the period ended June 30, 2023 (the " Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m(a) or Section 78o(d)), as amended; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Report and results of operations of the Company for the period covered by the Report.




Date: August 8, 2023

CHIEF EXECUTIVE OFFICER:		CHIEF FINANCIAL OFFICER:


/s/ DIAN C. TAYLOR		/s/ DAVID B. SPACHT
Dian C. Taylor		David B. Spacht



These certifications accompany the Report to which they relate, are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.

LOAN MODIFICATION
AND REAFFIRMATION AGREEMENT

THIS LOAN MODIFICATION AND REAFFIRMATION AGREEMENT (this “Agreement”) is dated as of the _____ day of August, 2023, by and among ARTESIAN RESOURCES CORPORATION, a Delaware corporation, ARTESIAN WATER COMPANY, INC., a Delaware corporation, ARTESIAN WATER PENNSYLVANIA, INC., a Pennsylvania corporation, ARTESIAN WATER MARYLAND, INC., a Delaware corporation, ARTESIAN WASTEWATER MANAGEMENT, INC., a Delaware corporation, ARTESIAN WASTEWATER MARYLAND, INC., a Delaware corporation, ARTESIAN UTILITY DEVELOPMENT, INC., a Delaware corporation, ARTESIAN DEVELOPMENT CORPORATION, a Delaware corporation, TIDEWATER ENVIRONMENTAL SERVICES, INC., a Delaware corporation (jointly and severally, the “Borrower”), and CITIZENS BANK, N.A. (the “Lender”).

WHEREAS, Lender made a demand line of credit available to Borrower in the amount of $40,000,000.00 (the “Loan”), which is evidenced by an Amended and Restated Demand Line of Credit Agreement between Borrower and Lender dated, May 20, 2022 (as amended and/or modified from time to time, the “Loan Agreement”), and an Amended and Restated Demand Note from Borrower in favor of Lender in the amount of $40,000,000.00, dated of even date herewith (as amended and/or modified from time to time, the “Note”); and

WHEREAS, the parties have agreed, subject to the terms and conditions set forth herein, to (i) increase the Applicable Margin to 110 Basis Points and (ii) extend the Termination Date to May 20, 2024.

NOW, THEREFORE, in consideration for the foregoing, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound and under seal, agree as follows:

Section 1. Definitions. Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in the Loan Agreement.

Section 2. Amendment to Loan Agreement.

A. The reference to “eighty-five (85)” in the definition of “Applicable Margin” in section 1.1.8 of the Loan Agreement is hereby deleted and replaced with “one hundred ten (110).”

B. The reference to “August 18, 2023” in the definition of “Termination Date” in section 1.1.77 of the Loan Agreement is hereby deleted and replaced with “May 20, 2024.”

Section 3. Affirmation by Borrower. Each Borrower hereby affirms the assumption, execution and delivery to Lender of the Note and the other Credit Documents and that they are continued in full force and effect and are in all respects hereby affirmed and ratified.

Section 4. Agreements, Acknowledgments and Waivers. Each Borrower acknowledges that the obligations set forth in each of the Credit Documents are valid, binding, and enforceable against each Borrower and are not subject to any defense, counterclaim, recoupment or offset. In addition, each Borrower acknowledges that (i) the execution of this Agreement, (ii) the acceptance by Lender of any payments hereunder or thereunder, or (iii) any previous or subsequent delay by Lender in exercising any or all of its rights or remedies under the Credit Documents, either separately or in combination, shall not constitute a waiver by Lender of any of the rights of Lender under the Credit Documents and shall not preclude Lender from exercising its rights thereunder or at law if any Borrower fails to perform any of its obligations as set forth in the Credit Documents, as the same are amended pursuant to the provisions of this Agreement. Nothing herein shall be deemed a waiver of any of Lender’s rights or remedies with respect to (i) any existing violation of any affirmative or negative pledge, covenant or warranty, (ii) any event of default, or (iii) any condition which, with the passage of time or the giving of notice would constitute an event of default, under any of the Credit Documents.

Section 5. Miscellaneous. The parties to this Agreement further agree as follows:

A. Expenses. Borrower shall pay to Lender within 30 days following request therefor all attorneys’ fees and other expenses incurred by Lender in connection with the preparation and execution of this Agreement.

B. Power and Authority. Each Borrower and Lender represent and warrant that each has the full power and authority to enter into and perform this Agreement, all of which has been duly authorized by all necessary corporate or limited liability company action, as appropriate, and that this Agreement is valid, binding, and enforceable in accordance with its terms.

C. Counterparts. This Agreement may be executed by the parties hereto in any number of counterparts, each of which when so executed and delivered shall be an original and all of which together shall constitute one Agreement.

D. Rules of Construction. As used herein, unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, the singular shall include the plural and the plural the singular, and the masculine, feminine or neuter gender shall include the other genders.

E. Choice of Laws. This Agreement shall be construed and interpreted in accordance with the internal laws of the State of Delaware, without regard for principles of conflicts of laws.

F. Acknowledgments. Each party to this Agreement acknowledges that it has executed this Agreement voluntarily, with a full knowledge and a complete understanding of the terms and effect of this Agreement and that it has been fully advised by competent counsel as to the nature and effect of the applicable terms and provisions hereof.

G. Representations and Warranties. Each Borrower represents and warrants that the representations and warranties set forth in the Credit Documents remain true and accurate in all material respects as of the date of this Agreement.

H. Remaining Force and Effect. Except as specifically amended hereby, the Credit Documents remain in full force and effect in accordance with their original terms and conditions.

IN WITNESS WHEREOF, the undersigned have set their hands and seals or caused these presents to be executed by their proper corporate officers or authorized members and sealed with their seal the day and year first above written.

WITNESS: __________________________	CITIZENS BANK, N.A. By: (SEAL) Benjamin Rogers Senior Vice President

ATTEST: __________________________	ARTESIAN WATER COMPANY, INC. By: (SEAL) David B. Spacht Chief Financial Officer

ATTEST: __________________________	ARTESIAN RESOURCES CORPORATION By: (SEAL) David B. Spacht Chief Financial Officer

ATTEST: __________________________	ARTESIAN WATER PENNSYLVANIA, INC. By: (SEAL) David B. Spacht Chief Financial Officer

ATTEST: __________________________	ARTESIAN WATER MARYLAND, INC. By: (SEAL) David B. Spacht Chief Financial Officer

ATTEST: __________________________	ARTESIAN WASTEWATER MANAGEMENT, INC. By: (SEAL) David B. Spacht President & Chief Financial Officer

ATTEST: __________________________	ARTESIAN WASTEWATER MARYLAND, INC. By: (SEAL) David B. Spacht Chief Financial Officer

ATTEST: __________________________	ARTESIAN UTILITY DEVELOPMENT, INC. By: (SEAL) David B. Spacht Chief Financial Officer

ATTEST: __________________________	ARTESIAN DEVELOPMENT CORPORATION By: (SEAL) David B. Spacht Chief Financial Officer

ATTEST:

__________________________

TIDEWATER ENVIRONMENTAL
SERVICES, INC.

By: (SEAL)

David B. Spacht

President & Chief Financial Officer

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2023	Aug. 03, 2023
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Document Transition Report	false
Entity File Number	000-18516
Entity Registrant Name	ARTESIAN RESOURCES CORPORATION
Entity Central Index Key	0000863110
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	51-0002090
Entity Address, Address Line One	664 Churchmans Road
Entity Address, City or Town	Newark
Entity Address, State or Province	DE
Entity Address, Postal Zip Code	19702
City Area Code	302
Local Phone Number	453 – 6900
Title of 12(b) Security	Common Stock
Trading Symbol	ARTNA
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Class A Stock [Member]
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		9,393,636
Class B Stock [Member]
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		881,452

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
ASSETS
Utility plant, at original cost (less accumulated depreciation - 2023 - $179,667; 2022 - $179,667)	$ 695,526	$ 668,031
Current assets
Cash and cash equivalents	5,923	1,309
Accounts and other receivables (less allowance for doubtful accounts - 2023 - $409; 2022 - $416)	11,952	13,511
Income tax receivable	992	1,632
Unbilled operating revenues	1,631	1,586
Materials and supplies	5,788	4,702
Prepaid property taxes	3	2,186
Prepaid expenses and other	3,826	2,878
Total current assets	30,115	27,804
Other assets
Non-utility property (less accumulated depreciation - 2023 - $1,023; 2022 - $990)	3,712	3,740
Other deferred assets	11,013	10,536
Goodwill	1,939	1,939
Operating lease right of use assets	500	467
Total other assets	17,164	16,682
Regulatory assets, net	7,318	7,274
Total Assets	750,123	719,791
Stockholders' equity
Common stock	10,275	9,502
Preferred stock	0	0
Additional paid-in capital	142,910	107,143
Retained earnings	74,088	71,286
Total stockholders' equity	227,273	187,931
Long-term debt, net of current portion	175,597	175,619
Total stockholders' equity and long-term debt	402,870	363,550
Current liabilities
Lines of credit	0	20,174
Current portion of long-term debt	2,100	2,003
Accounts payable	9,222	10,929
Accrued expenses	6,158	4,246
Overdraft payable	558	43
Accrued interest	898	989
Income taxes payable	187	6
Customer and other deposits	2,569	2,489
Other	3,059	3,190
Total current liabilities	24,751	44,069
Commitments and contingencies
Deferred credits and other liabilities
Net advances for construction	3,489	3,686
Operating lease liabilities	494	466
Regulatory liabilities	28,537	28,721
Deferred investment tax credits	431	439
Deferred income taxes	55,207	54,552
Total deferred credits and other liabilities	88,158	87,864
Net contributions in aid of construction	234,344	224,308
Total Liabilities and Stockholders' Equity	$ 750,123	$ 719,791

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
ASSETS
Utility Plant, accumulated depreciation	$ 179,667	$ 172,954
Current assets
Accounts receivable, allowance for doubtful accounts	409	416
Other assets
Non-utility property, accumulated depreciation	$ 1,023	$ 990

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Operating revenues
Total Operating Revenues	$ 25,251	$ 25,011	$ 47,746	$ 47,198
Operating expenses
Utility operating expenses	11,626	10,070	22,899	20,566
Non-utility operating expenses	1,122	1,905	2,206	2,847
Depreciation and amortization	3,215	3,055	6,439	6,140
State and federal income taxes	1,593	1,725	2,906	3,144
Property and other taxes	1,487	1,413	3,027	2,914
Total Operating Expenses	19,043	18,168	37,477	35,611
Operating income	6,208	6,843	10,269	11,587
Other income
Allowance for funds used during construction (AFUDC)	588	324	1,046	505
Miscellaneous (expense) income	(12)	(33)	1,591	1,412
Income before interest charges	6,784	7,134	12,906	13,504
Interest charges	2,341	2,088	4,758	3,975
Net income applicable to common stock	$ 4,443	$ 5,046	$ 8,148	$ 9,529
Income per common share:
Basic (in dollars per share)	$ 0.44	$ 0.53	$ 0.84	$ 1.01
Diluted (in dollars per share)	$ 0.44	$ 0.53	$ 0.84	$ 1.01
Weighted average common shares outstanding:
Basic (in shares)	9,998	9,452	9,752	9,438
Diluted (in shares)	10,002	9,470	9,757	9,464
Cash dividends per share of common stock (in dollars per share)	$ 0.284	$ 0.2729	$ 0.5624	$ 0.5404
Water Sales [Member]
Operating revenues
Total Operating Revenues	$ 20,636	$ 19,722	$ 38,652	$ 37,865
Other Utility Operating Revenue [Member]
Operating revenues
Total Operating Revenues	3,032	2,914	5,848	5,440
Non-Utility Operating Revenue [Member]
Operating revenues
Total Operating Revenues	$ 1,583	$ 2,375	$ 3,246	$ 3,893

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 8,148	$ 9,529
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	6,439	6,140
Deferred income taxes, net	647	(640)
Stock compensation	116	104
AFUDC, equity portion	(648)	(349)
Changes in assets and liabilities, net of acquisitions:
Accounts and other receivables, net of allowance for doubtful accounts	1,559	204
Income tax receivable	640	1,468
Unbilled operating revenues	(45)	(704)
Materials and supplies	(1,086)	(936)
Income tax payable	181	792
Prepaid property taxes	2,183	2,862
Prepaid expenses and other	(948)	(130)
Other deferred assets	(494)	511
Regulatory assets	(101)	185
Regulatory liabilities	(260)	(254)
Accounts payable	(1,095)	(4,680)
Accrued expenses	158	(934)
Accrued interest	(91)	(21)
Deposits and other	(82)	441
NET CASH PROVIDED BY OPERATING ACTIVITIES	15,221	13,588
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (net of AFUDC, equity portion)	(32,314)	(23,266)
Investment in acquisitions, net of cash acquired	0	(6,341)
Proceeds from sale of assets	64	41
NET CASH USED IN INVESTING ACTIVITIES	(32,250)	(29,566)
CASH FLOWS FROM FINANCING ACTIVITIES
Net (repayments) under lines of credit agreements	(20,174)	(17,123)
Increase in overdraft payable	515	304
Net advances and contributions in aid of construction	10,149	8,013
Net proceeds from issuance of common stock	36,737	936
Issuance of long-term debt	1,235	30,000
Equity issuance costs	(313)	0
Dividends paid	(5,346)	(5,096)
Deferred debt issuance costs	0	(102)
Principal repayments of long-term debt	(1,160)	(826)
NET CASH PROVIDED BY FINANCING ACTIVITIES	21,643	16,106
NET INCREASE IN CASH AND CASH EQUIVALENTS	4,614	128
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	1,309	92
CASH AND CASH EQUIVALENTS AT END OF PERIOD	5,923	220
Non-cash Investing and Financing Activity:
Utility plant received as construction advances and contributions	1,726	3,243
Change in amounts included in accounts payable, accrued payables and other related to capital expenditures	(1,168)	1,761
Supplemental Disclosures of Cash Flow Information:
Interest paid	4,849	3,996
Income taxes paid	2,076	743
Purchase price of allocation of investment in acquisitions:
Utility plant	0	33,345
Cash	0	280
Goodwill	0	1,939
Other assets	0	1,033
Total assets	0	36,597
Less:
Liabilities	0	2,828
Future contractual obligation payable to seller	0	1,569
Contributions in aid of construction	0	25,597
Cash paid for acquisitions	0	6,621
Cash received from acquisitions	0	280
Net cash paid for acquisitions	$ 0	$ 6,341

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)
shares in Thousands, $ in Thousands

Common Stock [Member]

Common Shares Class A Non-Voting [Member]

Common Stock [Member]

Common Shares Class B Voting [Member]

Additional Paid-in Capital [Member]

Retained Earnings [Member]

Total

Balance at Dec. 31, 2021

$ 8,532

$ 881

$ 104,989

$ 63,607

$ 178,009

Balance (in shares) at Dec. 31, 2021

8,532

^[1],[2],[3]

881

^[4]

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net income

$ 0

4,483

Cash dividends declared

Common stock

(2,518)

Issuance of common stock

Dividend reinvestment plan

$ 2

$ 0

Dividend reinvestment plan (in shares)

^[1],[2],[3]

^[4]

Employee stock options and awards

^[3]

$ 22

$ 0

475

497

Employee stock options and awards (in shares)

^[3]

^[1],[2]

^[4]

Employee Retirement Plan

^[1]

$ 0

Employee Retirement Plan (in shares)

^[1]

^[2],[3]

^[4]

Balance at Mar. 31, 2022

$ 8,556

$ 881

105,551

65,572

180,560

Balance (in shares) at Mar. 31, 2022

8,556

^[1],[2],[3]

881

^[4]

Balance at Dec. 31, 2021

$ 8,532

$ 881

104,989

63,607

178,009

Balance (in shares) at Dec. 31, 2021

8,532

^[1],[2],[3]

881

^[4]

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net income

9,529

Balance at Jun. 30, 2022

$ 8,577

$ 881

105,984

65,459

180,901

Balance (in shares) at Jun. 30, 2022

8,577

^[1],[2],[3]

881

^[4]

Balance at Mar. 31, 2022

$ 8,556

$ 881

105,551

65,572

180,560

Balance (in shares) at Mar. 31, 2022

8,556

^[1],[2],[3]

881

^[4]

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net income

$ 0

5,046

Cash dividends declared

Common stock

(5,159)

Issuance of common stock

Dividend reinvestment plan

$ 2

$ 0

Dividend reinvestment plan (in shares)

^[1],[2],[3]

^[4]

Employee stock options and awards

^[3]

$ 19

$ 0

336

355

Employee stock options and awards (in shares)

^[3]

^[1],[2]

^[4]

Employee Retirement Plan

^[1]

$ 0

Employee Retirement Plan (in shares)

^[1]

^[2],[3]

^[4]

Balance at Jun. 30, 2022

$ 8,577

$ 881

105,984

65,459

180,901

Balance (in shares) at Jun. 30, 2022

8,577

^[1],[2],[3]

881

^[4]

Balance at Dec. 31, 2022

$ 8,621

$ 881

107,143

71,286

187,931

Balance (in shares) at Dec. 31, 2022

8,621

^[1],[2],[3]

881

^[4]

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net income

$ 0

3,705

Cash dividends declared

Common stock

(2,646)

Issuance of common stock

Dividend reinvestment plan

$ 2

$ 0

Dividend reinvestment plan (in shares)

^[1],[2],[3]

^[4]

Employee stock options and awards

^[3]

$ 0

Employee stock options and awards (in shares)

^[3]

^[1],[2]

^[4]

Employee Retirement Plan

^[1]

$ 0

Employee Retirement Plan (in shares)

^[1]

^[2],[3]

^[4]

Balance at Mar. 31, 2023

$ 8,623

$ 881

107,290

72,345

189,139

Balance (in shares) at Mar. 31, 2023

8,623

^[1],[2],[3]

881

^[4]

Balance at Dec. 31, 2022

$ 8,621

$ 881

107,143

71,286

187,931

Balance (in shares) at Dec. 31, 2022

8,621

^[1],[2],[3]

881

^[4]

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net income

8,148

Balance at Jun. 30, 2023

$ 9,394

$ 881

142,910

74,088

227,273

Balance (in shares) at Jun. 30, 2023

9,394

^[1],[2],[3]

881

^[4]

Balance at Mar. 31, 2023

$ 8,623

$ 881

107,290

72,345

189,139

Balance (in shares) at Mar. 31, 2023

8,623

^[1],[2],[3]

881

^[4]

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net income

$ 0

4,443

Cash dividends declared

Common stock

(2,700)

Issuance of common stock

Public offering, net of costs

$ 764

$ 0

35,467

36,231

Public offering, net of costs (in shares)

764

^[1],[2],[3]

^[4]

Dividend reinvestment plan

^[3]

$ 2

$ 0

100

Dividend reinvestment plan (in shares)

^[3]

^[1],[2]

^[4]

Employee stock options and awards

^[3]

$ 5

$ 0

Employee stock options and awards (in shares)

^[3]

^[1],[2]

^[4]

Employee Retirement Plan

^[1]

$ 0

Employee Retirement Plan (in shares)

^[1],[2],[3]

^[4]

Balance at Jun. 30, 2023

$ 9,394

$ 881

$ 142,910

$ 74,088

$ 227,273

Balance (in shares) at Jun. 30, 2023

9,394

^[1],[2],[3]

881

^[4]

[1]	Artesian Resources Corporation registered 200,000 shares of Class A Common Stock, subsequently adjusted for stock splits, available for purchase through the Company’s 401(k) retirement plan.
[2]	At June 30, 2023 and June 30, 2022, Class A Common Stock had 15,000,000 shares authorized. For the same periods, shares issued, inclusive of treasury shares, were 9,422,321 and 8,606,597, respectively.
[3]	Under the Equity Compensation Plan, effective December 9, 2015, or the 2015 Plan, Artesian Resources Corporation authorized up to 331,500 shares of Class A Common Stock for issuance of grants in the form of stock options, stock units, dividend equivalents and other stock-based awards, subject to adjustment in certain circumstances as discussed in the 2015 Plan. Includes stock compensation expense for June 30, 2023, and June 30, 2022, see Note 6-Stock Compensation Plans.
[4]	At June 30, 2023 and June 30, 2022, Class B Common Stock had 1,040,000 shares authorized and 881,452 shares issued.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	Jun. 30, 2023	Jun. 30, 2022	Dec. 09, 2015
Common Stock [Member] \| Common Shares Class A Non-Voting [Member]
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized (in shares)	15,000,000	15,000,000
Common Stock Shares Issued (in shares)	9,422,321	8,606,597
Shares available for purchase through retirement plans (in shares)	200,000
Shares authorized for issuance of grants under equity compensation plan (in shares)			331,500
Common Stock [Member] \| Common Shares Class B Voting [Member]
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized (in shares)	1,040,000	1,040,000
Common Stock Shares Issued (in shares)	881,452	881,452

GENERAL	6 Months Ended
GENERAL	Jun. 30, 2023
GENERAL [Abstract]
GENERAL	NOTE 1 – GENERAL Artesian Resources Corporation, or Artesian Resources, includes income from the earnings of all of our wholly owned subsidiaries. The terms "we", "our", "Artesian" and the "Company" as used herein refer to Artesian Resources and its subsidiaries. DELAWARE REGULATED UTILITY SUBSIDIARIES Artesian Water Company, Inc., or Artesian Water, distributes and sells water to residential, commercial, industrial, governmental, municipal and utility customers 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. Artesian Water also provides water for public and private fire protection to customers in our service territories. 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. Artesian Wastewater Management, Inc., or Artesian Wastewater, began providing wastewater services in Sussex County, Delaware in July 2005. Artesian Wastewater is a regulated entity that owns wastewater collection and treatment infrastructure and provides wastewater services to customers in Delaware as a regulated public wastewater service company. 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. MARYLAND REGULATED UTILITY SUBSIDIARIES Artesian Water Maryland, Inc., or Artesian Water Maryland, began operations in August 2007. Artesian Water Maryland distributes and sells water to residential, commercial, industrial and municipal customers in Cecil County, Maryland. Artesian Wastewater Maryland, Inc., or Artesian Wastewater Maryland, was incorporated on June 3, 2008 and is authorized and able to provide regulated wastewater services to customers in the State of Maryland. It is currently not providing these services. PENNSYLVANIA REGULATED UTILITY SUBSIDIARY Artesian Water Pennsylvania, Inc., or Artesian Water Pennsylvania, began operations in 2002. It provides water service to a residential community in Chester County, Pennsylvania. OTHER NON-UTILITY SUBSIDIARIES Our three other subsidiaries, none of which are regulated, are Artesian Utility Development, Inc., or Artesian Utility, Artesian Development Corporation, or Artesian Development, and Artesian Storm Water Services, Inc., or Artesian Storm Water. Artesian Utility was formed in 1996 and designs and builds water and wastewater infrastructure and provides contract water and wastewater operation services on the Delmarva Peninsula to private, municipal and governmental institutions. Artesian Utility also evaluates land parcels, provides recommendations to developers on the size of water or wastewater facilities and the type of technology that should be used for treatment at such facilities, and operates water and wastewater facilities in Delaware for municipal and governmental agencies. Artesian Utility also contracts with developers and government agencies for design and construction of wastewater infrastructure throughout the Delmarva Peninsula. Artesian Utility currently operates wastewater treatment facilities for the Town of Middletown, in southern New Castle County, Delaware, or Middletown, under a 20-year contract that expires in July 2039. Artesian Utility currently operates three wastewater treatment systems with a combined capacity of up to approximately 3.8 million gallons per day. The wastewater treatment facilities in Middletown provide reclaimed wastewater for use in spray irrigation on public and agricultural lands in the area. 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. 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. Artesian Development is a real estate holding company that owns properties, including land approved for office buildings, a water treatment plant and 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 nearly 10,000 square feet of warehouse space. 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. Artesian Storm Water elected to not seek new opportunities. 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 to be effective as of June 20, 2023.

BASIS OF PRESENTATION	6 Months Ended
BASIS OF PRESENTATION	Jun. 30, 2023
BASIS OF PRESENTATION [Abstract]
BASIS OF PRESENTATION	NOTE 2 – BASIS OF PRESENTATION Basis of Presentation The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC, for Form 10-Q. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. Accordingly, these condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes in the Company's annual report on Form 10-K for fiscal year 2022 as filed with the SEC on March 10, 2023. The condensed consolidated financial statements include the accounts of Artesian Resources Corporation and its wholly owned subsidiaries, including its principal operating company, Artesian Water. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments (unless otherwise noted) necessary to present fairly the Company's balance sheet position as of June 30, 2023, the results of its operations for the three and six-month periods ended June 30, 2023 and June 30, 2022, its cash flows for the six-month periods ended June 30, 2023 and June 30, 2022 and the changes in stockholders’ equity for the three and six-month periods ended June 30, 2023 and June 30, 2022. The December 31, 2022 Condensed Consolidated Balance Sheet was derived from the Company’s December 31, 2022 audited consolidated financial statements, but does not include all disclosures and notes normally provided in annual financial statements. The results of operations for the interim periods presented are not necessarily indicative of the results for the full year or for future periods. Regulated Utility Accounting The accounting records of Artesian Water, Artesian Wastewater, and, effective January 14, 2022, TESI are maintained in accordance with the uniform system of accounts as prescribed by the Delaware Public Service Commission, or the DEPSC. The accounting records of Artesian Water Pennsylvania are maintained in accordance with the uniform system of accounts as prescribed by the Pennsylvania Public Utility Commission, or the PAPUC. The accounting records of Artesian Water Maryland and Artesian Wastewater Maryland are maintained in accordance with the uniform system of accounts as prescribed by the Maryland Public Service Commission, or the MDPSC. Each of these subsidiaries follow the provisions of Financial Accounting Standards Board, or FASB, ASC Topic 980, which provide guidance for companies in regulated industries. These regulated subsidiaries account for the majority of our operating revenue. See Note 17 to our Condensed Consolidated Financial Statements for a full description of our segment information. Use of Estimates The condensed consolidated financial statements were prepared in conformity with generally accepted accounting principles in the U.S., which require management to make certain estimates and assumptions regarding the reported amounts of assets and liabilities including unbilled revenues, credit losses and reserves for bad debt, regulatory asset recovery, lease agreements, goodwill and contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from management's estimates. All additions to utility plant are recorded at cost. Business combinations pursuant to ASC Topic 805 may result in a purchase price allocation and the acquired assets are required to be evaluated by the applicable regulatory agency. Artesian Wastewater acquired TESI in January 2022 and Artesian Water purchased substantially all of the water operating assets from the Town of Clayton in May 2022. As of December 31, 2022, the fair value determination for TESI and the water operating assets acquired from the Town of Clayton was finalized. A third-party valuation specialist assisted with the valuation of the assets acquired.

REVENUE RECOGNITION

6 Months Ended

Jun. 30, 2023

REVENUE RECOGNITION [Abstract]

REVENUE RECOGNITION

NOTE 3 – REVENUE RECOGNITION

Background

Tariff Contract Revenues

Non-tariff Contract Revenues

Sales Tax

Disaggregated Revenues

The following table shows the Company’s revenues disaggregated by service type; all revenues are generated within a similar geographical location:

(in thousands)	Three months ended June 30, 2023		Three months ended June 30, 2022		Six months ended June 30, 2023		Six months ended June 30, 2022
Tariff Revenue
Consumption charges	$	12,936	$	12,182	$	23,383	$	22,749
Fixed fees		8,028		7,751		16,066		15,529
Service charges		174		137		354		293
DSIC		1,340		1,282		2,519		2,464
Metered wastewater services		146		129		251		269
Industrial wastewater services		402		422		848		828
Total Tariff Revenue	$	23,026	$	21,903	$	43,421	$	42,132

Non-Tariff Revenue
Service line protection plans	$	1,372	$	1,217	$	2,735	$	2,439
Contract operations		276		242		521		453
Design and installation		16		978		121		1,101
Inspection fees		109		66		187		106
Total Non-Tariff Revenue	$	1,773	$	2,503	$	3,564	$	4,099
Other Operating Revenue	$	452	$	605	$	761	$	967
Total Operating Revenue	$	25,251	$	25,011	$	47,746	$	47,198

Contract Assets and Contract Liabilities

Our contract assets and liabilities consist of the following:

(in thousands)	June 30, 2023		December 31, 2022

Contract Assets – Tariff	$	2,800	$	2,618

Deferred Revenue
Deferred Revenue – Tariff	$	1,394	$	1,231
Deferred Revenue – Non-Tariff		554		438
Total Deferred Revenue	$	1,948	$	1,669

The changes in Contract Assets and Deferred Revenue are primarily due to normal timing differences between our performance and customer payments.

Remaining Performance Obligations

ACCOUNTS RECEIVABLE

6 Months Ended

Jun. 30, 2023

ACCOUNTS RECEIVABLE [Abstract]

ACCOUNTS RECEIVABLE

NOTE 4 – ACCOUNTS RECEIVABLE

	June 30,		December 31,
(in thousands)	2023		2022

Customer accounts receivable – water	$	7,562	$	5,981
Customer accounts receivable – wastewater		544		482
Settlement agreement receivable		2,518		2,532
Miscellaneous accounts receivable		1,115		3,781
Developer receivable		622		1,151
		12,361		13,927
Less allowance for doubtful accounts		409		416
Net accounts receivable	$	11,952	$	13,511

LEASES

6 Months Ended

Jun. 30, 2023

LEASES [Abstract]

LEASES

NOTE 5 – LEASES

Rent expense for all operating leases, except those with terms of 12 months or less comprises:

	(in thousands)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022

Minimum rentals	$	4	$	2	$	6	$	9
Contingent rentals		—		—		—		—

	$	4	$	2	$	6	$	9

Supplemental cash flow information related to leases is as follows:

	(in thousands)
	Six Months Ended		Six Months Ended
	June 30, 2023		June 30, 2022

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6	$	9
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	500	$	445

Supplemental balance sheet information related to leases is as follows:

	(in thousands, except lease term and discount rate)
	June 30, 2023			December 31, 2022

Operating Leases:
Operating lease right-of-use assets	$	500		$	467

Other current liabilities	$	8			2
Operating lease liabilities		494			466
Total operating lease liabilities	$	502		$	468


Weighted Average Remaining Lease Term
Operating leases	57 years			61 years
Weighted Average Discount Rate
Operating leases		5.0	%		5.0	%

Maturities of operating lease liabilities that have initial or remaining non-cancelable lease terms in excess of one year as of June 30, 2023 are as follows:

	(in thousands)
	Operating Leases
Year
2024	$	34
2025		34
2026		34
2027		34
2028		34
Thereafter		1,402
Total undiscounted lease payments	$	1,572
Less effects of discounting		(1,070	)
Total lease liabilities recognized	$	502

As of June 30, 2023, we have not entered into operating or finance leases that will commence at a future date.

STOCK COMPENSATION PLANS

6 Months Ended

Jun. 30, 2023

STOCK COMPENSATION PLANS [Abstract]

STOCK COMPENSATION PLANS

NOTE 6 – STOCK COMPENSATION PLANS

There was no stock compensation cost capitalized as part of an asset.

The following summary reflects changes in the shares of Class A Stock underlying options and restricted stock awards for the six months ended June 30, 2023:

	Options								Restricted Awards
	Option Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (Yrs.)		Aggregate Intrinsic Value (in thousands)		Outstanding Restricted Stock Awards			Weighted Average Grant Date FairValue
Plan options/restricted stock awards
Outstanding at January 1, 2023		6,750	$	21.86			$	248		5,000		$	45.58
Granted		—		—				—		5,000			54.88
Exercised/vested and released		—		—				—		(5,000	)		45.58
Expired/cancelled		—		—				—		—			—
Outstanding at June 30, 2023		6,750	$	21.86		0.854	$	171		5,000		$	54.88

Exercisable/vested at June 30, 2023		6,750	$	21.86		0.854	$	171		—			—

There were no options exercised during the six months ended June 30, 2023.

There were no unvested option shares outstanding under the 2015 Plan during the six months ended June 30, 2023.

As of June 30, 2023, there were no unrecognized expenses related to non-vested option shares granted under the 2015 Plan.

OTHER DEFERRED ASSETS

6 Months Ended

Jun. 30, 2023

OTHER DEFERRED ASSETS [Abstract]

OTHER DEFERRED ASSETS

NOTE 7 – OTHER DEFERRED ASSETS

(in thousands)	June 30, 2023	December 31, 2022

Investment in CoBank	$5,882	$5,351
Settlement agreement receivable-long term	4,991	4,991
Other deferred assets	140	194
	$11,013	$10,536

REGULATORY ASSETS

6 Months Ended

Jun. 30, 2023

REGULATORY ASSETS [Abstract]

REGULATORY ASSETS

NOTE 8 – REGULATORY ASSETS

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.

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	2.5
Maryland rate proceedings	5
Debt related costs	15 to 30 (based on term of related debt)
Deferred costs affiliated interest agreement	20
Goodwill (resulting from acquisition of Mountain Hill Water Company in 2008)	50
Deferred acquisition costs (resulting from purchase of water assets in Cecil County, Maryland in 2011 and Port Deposit, Maryland in 2010)	20
Franchise Costs (resulting from purchase of water assets in Cecil County, Maryland in 2011)	80

Regulatory assets, net of amortization, comprise:
	(in thousands)
	June 30, 2023		December 31, 2022

Deferred contract costs and other	$	238	$	227
Rate case studies		138		57
Rate proceedings		164		—
Deferred income taxes		454		465
Debt related costs		4,504		4,682
Deferred costs affiliated interest agreement		1,114		1,114
Goodwill		262		266
Deferred acquisition and franchise costs		444		463
	$	7,318	$	7,274

REGULATORY LIABILITIES

6 Months Ended

Jun. 30, 2023

REGULATORY LIABILITIES [Abstract]

REGULATORY LIABILITIES

NOTE 9 – REGULATORY LIABILITIES

Regulatory liabilities comprise:
	(in thousands)
	June 30, 2023		December 31, 2022

Utility plant retirement cost obligation	$	31	$	-
Deferred settlement refunds		7,487		7,487
Deferred income taxes (related to TCJA)		21,019		21,234
	$	28,537	$	28,721

NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE

6 Months Ended

Jun. 30, 2023

NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE [Abstract]

NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE

NOTE 10 – NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE

The following table summarizes the shares used in computing basic and diluted net income per share:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Weighted average common shares outstanding during the period for Basic computation		9,998		9,452		9,752		9,438
Dilutive effect of employee stock options and awards		4		18		5		26

Weighted average common shares outstanding during the period for Diluted computation		10,002		9,470		9,757		9,464

For the three and six months ended June 30, 2023 and 2022, no shares of restricted stock awards were excluded from the calculations of diluted net income per share.

REGULATORY PROCEEDINGS

6 Months Ended

Jun. 30, 2023

REGULATORY PROCEEDINGS [Abstract]

REGULATORY PROCEEDINGS

NOTE 11 – REGULATORY PROCEEDINGS

We are subject to regulation by the following state regulatory commissions:

• The DEPSC, regulates Artesian Water, Artesian Wastewater, and TESI.

• The MDPSC, regulates both Artesian Water Maryland and Artesian Wastewater Maryland.

• The PAPUC, regulates Artesian Water Pennsylvania.

Water and Wastewater Rates

Other Proceedings

The following table summarizes (1) Artesian Water’s application with the DEPSC to collect DSIC rates and (2) the rate upon which eligible plant improvements are based:

Application Date	11/20/20
DEPSC Approval Date	12/14/20
Effective Date	01/01/21
Cumulative DSIC Rate	7.50%
Net Eligible Plant Improvements – Cumulative Dollars (in millions)	$43.1
Eligible Plant Improvements – Installed Beginning Date	10/01/2014
Eligible Plant Improvements – Installed Ending Date	04/30/2019

INCOME TAXES	6 Months Ended
INCOME TAXES	Jun. 30, 2023
INCOME TAXES [Abstract]
INCOME TAXES	NOTE 12 – INCOME TAXES Deferred income taxes are provided in accordance with FASB ASC Topic 740 on all differences between the tax basis of assets and liabilities and the amounts at which they are carried in the consolidated financial statements based on the enacted tax rates expected to be in effect when such temporary differences are expected to reverse. The Company’s rate regulated subsidiaries recognize regulatory liabilities, to the extent considered in ratemaking, for deferred taxes provided in excess of the current statutory tax rate and regulatory assets for deferred taxes provided at rates less than the current statutory rate. Such tax-related regulatory assets and liabilities are reported at the revenue requirement level and amortized to income as the related temporary differences reverse, generally over the lives of the related properties. Under FASB ASC Topic 740, an uncertain tax position represents our expected treatment of a tax position taken, or planned to be taken in the future, that has not been reflected in measuring income tax expense for financial reporting purposes. The Company establishes reserves for uncertain tax positions based upon management's judgment as to the sustainability of these positions. These accounting estimates related to the uncertain tax position reserve require judgments to be made as to the sustainability of each uncertain tax position based on its technical merits. The Company believes its tax positions comply with applicable law and that it has adequately recorded reserves as required. However, to the extent the final tax outcome of these matters is different than the estimates recorded, the Company would then adjust its tax reserves or unrecognized tax benefits in the period that this information becomes known. The statute of limitations for the 2018 tax returns lapsed during the third quarter of 2022, which resulted in the reversal of the reserve in the amount of approximately $212,000. The Company has elected to recognize accrued interest (net of related tax benefits) and penalties related to uncertain tax positions as a component of its income tax expense. During the third quarter of 2022, the Company reversed approximately $10,000 in penalties and interest leaving a zero balance. The Company remains subject to examination by federal and state authorities for the tax years 2019 through 2022. Investment tax credits were deferred through 1986 and are recognized as a reduction of deferred income tax expense over the estimated economic useful lives of the related assets.

FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2023

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

NOTE 13 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value.

Current Assets and Liabilities

For those current assets and liabilities that are considered financial instruments, the carrying amounts approximate fair value because of the short maturity of those instruments.

Long-term Financial Liabilities

(in thousands)
	June 30, 2023		December 31, 2022
Carrying amount	$	177,697	$	177,622
Estimated fair value	$	158,543	$	155,425

COMMON STOCK OFFERING	6 Months Ended
COMMON STOCK OFFERING	Jun. 30, 2023
COMMON STOCK OFFERING [Abstract]
COMMON STOCK OFFERING	NOTE 14 – COMMON STOCK OFFERING On May 23, 2023, the Company completed the sale of 695,650 shares of its Class A Stock, par value $1.00 per share, at a price to the public of $50 per share. The net proceeds to the Company from the offering, after deducting the underwriting discounts and commissions and other offering costs, are approximately $33.0 million. The Company also granted the underwriter a 30-day option to purchase up to an additional 104,348 shares of Class A Stock at the public offering price, less the underwriting discount. On June 16, 2023, the underwriter exercised its over-allotment option, to purchase 67,689 shares of Class A Stock at the public offering price. The net proceeds to the Company resulting from the exercise of the over-allotment option, after deducting the underwriting discounts and commissions and other offering costs, are approximately $3.2 million. All of the shares of Class A Stock sold in the offering were offered by the Company. The proceeds from both the initial offering and the over-allotment option were used to repay short-term borrowings, including borrowings incurred under our lines of credit with Citizens Bank and CoBank, incurred primarily to finance capital expenditures, including investment in utility plant and equipment, and other general corporate purposes.

BUSINESS COMBINATIONS

6 Months Ended

Jun. 30, 2023

BUSINESS COMBINATIONS [Abstract]

BUSINESS COMBINATIONS

NOTE 15 – BUSINESS COMBINATIONS

The table below sets forth the final purchase price allocation of this acquisition as of December 31, 2022.

(in thousands)
		TESI
	Utility plant	$	25,354
	Cash		280
	Goodwill		1,939
	Other assets		1,033
	Total assets		28,606
	Less: Liabilities and contributions in aid of construction (CIAC)
	Liabilities		2,808
	CIAC		22,676
	Net cash purchase price	$	3,122

As of December 31, 2022, the fair value determination for TESI and the water operating assets acquired from the Town of Clayton was finalized.

GEOGRAPHIC CONCENTRATION OF CUSTOMERS	6 Months Ended
GEOGRAPHIC CONCENTRATION OF CUSTOMERS	Jun. 30, 2023
GEOGRAPHIC CONCENTRATION OF CUSTOMERS [Abstract]
GEOGRAPHIC CONCENTRATION OF CUSTOMERS	NOTE 16 – GEOGRAPHIC CONCENTRATION OF CUSTOMERS Artesian Water, Artesian Water Maryland and Artesian Water Pennsylvania provide water utility service to customers within their established service territory in all three counties of Delaware and in portions of Maryland and Pennsylvania, pursuant to rates filed with and approved by the DEPSC, the MDPSC and the PAPUC. As of June 30, 2023, Artesian Water was serving approximately 95,400 customers, Artesian Water Maryland was serving approximately 2,600 customers and Artesian Water Pennsylvania was serving approximately 40 customers. Artesian Wastewater and TESI provide wastewater utility service to customers within their established service territory in Sussex County, Delaware pursuant to rates filed with and approved by the DEPSC. As of June 30, 2023, the number of wastewater customers served was approximately 7,900, including one large industrial customer.

BUSINESS SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2023

BUSINESS SEGMENT INFORMATION [Abstract]

BUSINESS SEGMENT INFORMATION

NOTE 17 – BUSINESS SEGMENT INFORMATION

(in thousands)
	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Revenues:
Regulated Utility	$	23,668		$	22,636		$	44,501		$	43,305
Other (non-utility)		1,637			2,408			3,353			3,960
Inter-segment elimination		(54	)		(33	)		(108	)		(67	)
Consolidated Revenues	$	25,251		$	25,011		$	47,746		$	47,198

Operating Income:
Regulated Utility	$	6,066		$	6,526		$	9,824		$	10,864
Other (non-utility)		142			317			445			723
Consolidated Operating Income	$	6,208		$	6,843		$	10,269		$	11,587

Income Taxes:
Regulated Utility	$	1,303		$	1,570		$	2,370		$	2,813
Other (non-utility)		290			155			536			331
Consolidated Income Taxes	$	1,593		$	1,725		$	2,906		$	3,144

	June 30, 2023		December 31, 2022
Assets:
Regulated Utility	$	740,135	$	713,113
Other (non-utility)		9,988		6,678
Consolidated Assets	$	750,123	$	719,791

LEGAL PROCEEDINGS	6 Months Ended
LEGAL PROCEEDINGS	Jun. 30, 2023
LEGAL PROCEEDINGS [Abstract]
LEGAL PROCEEDINGS	NOTE 18 – LEGAL PROCEEDINGS Periodically, we are involved in other proceedings or litigation arising in the ordinary course of business. We do not believe that the ultimate resolution of these matters will materially affect our business, financial position or results of operations. However, we cannot ensure that we will prevail in any litigation and, regardless of the outcome, may incur significant litigation expense and may have significant diversion of management attention. On July 19, 2022, final judgment was entered by the United States District Court, or Court, for a Consent Decree between the Delaware Sand and Gravel Remedial Trust, or Trust, and the United States Environmental Protection Agency, or USEPA, that governs the implementation of Amendment No 2 to the USEPA’s 1988 Record of Decision for the Delaware Sand & Gravel Landfill Superfund Site, or Site, located in New Castle County, Delaware, issued on December 12, 2017, or ROD Amendment No. 2, confirming, among other things, the terms and conditions set forth in a Settlement Agreement upon which The Chemours Company FC, LLC, Hercules, LLC, Waste Management of Delaware, Inc., SC Holdings, Inc., Cytec Industries, Inc., Zeneca Inc., and Bayer CropScience Inc., collectively the Percentage Settlors, and the Trust, on one hand, and Artesian Water, on the other hand, have agreed to resolve certain of Artesian Water’s claims and issues relating to releases of contaminants from the Site. ROD Amendment No. 2 sets forth the remedy for the contamination existing at and emanating from the Site, or the Remedy, to address a release of contaminants of concern and of emerging concern, or COC’s, from the Site into groundwater. Artesian Water has found in groundwater that Artesian Water uses for public potable water supply certain COC’s that the Remedy is designed to address, as a result of which Artesian has incurred, and potentially will incur additional, capital and operating costs to treat the groundwater to meet applicable drinking water standards. The Remedy includes requirements that are directly linked to Artesian’s continued operation of the treatment plant associated with groundwater around the Site. As set forth in the Settlement Agreement, Artesian Water shall have access to financial assurances that the Percentage Settlors have provided, or will provide, to the USEPA in connection with the Consent Decree governing the implementation of the Remedy. In addition, the Trust shall reimburse Artesian Water for past capital and operating costs, totaling approximately $10.0 million. Approximately $2.5 million was paid in each of August 2022 and July 2023, and the remaining $5.0 million is payable in two equal installments annually on the second and third anniversary date of the Court’s approval of the Consent Decree. In addition, the Trust shall reimburse Artesian Water for documented reasonable and necessary capital and operating costs after July 1, 2021 that Artesian Water incurs to treat Site-related COC’s. Any reimbursements Artesian Water receives from the Trust shall be subject to final determination by the DEPSC as to the appropriate regulatory rate-making treatment. Artesian Water received approval from the DEPSC in October 2022 to refund the reimbursements for past capital and operating costs to its customers. The refund for the reimbursements will be applied to current and future customer bills in annual installments. The first refund occurred in October 2022, and future customer refunds will occur no later than August of each year from 2023 through 2025. The amount of the credit is calculated by dividing the amount of the reimbursement by the number of eligible customers. Artesian Water will record 2022 and future recovery of capital expenditures as Contributions in Aid of Construction and will record expense recovery as an offset to operations and maintenance expense, with the intention that those recoveries will then be available for inclusion and consideration in any future rate applications. The Trust’s reimbursement of such costs shall end if and when, based upon testing information from the Trust’s Remedy facilities and Artesian Water’s facilities, treatment of Site-related COC’s is no longer necessary for Artesian Water to meet the treatment levels that Artesian Water chooses to not exceed in water it distributes to the general public throughout its service territory to provide a margin of safety in complying with applicable drinking water standards.

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS	6 Months Ended
IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS	Jun. 30, 2023
IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS [Abstract]
IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS	NOTE 19 – IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS There was no new guidance issued by the FASB during the six months ended June 30, 2023 that is applicable to the Company.

BASIS OF PRESENTATION (Policies)	6 Months Ended
BASIS OF PRESENTATION (Policies)	Jun. 30, 2023
BASIS OF PRESENTATION [Abstract]
Basis of Presentation	Basis of Presentation The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC, for Form 10-Q. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. Accordingly, these condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes in the Company's annual report on Form 10-K for fiscal year 2022 as filed with the SEC on March 10, 2023. The condensed consolidated financial statements include the accounts of Artesian Resources Corporation and its wholly owned subsidiaries, including its principal operating company, Artesian Water. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments (unless otherwise noted) necessary to present fairly the Company's balance sheet position as of June 30, 2023, the results of its operations for the three and six-month periods ended June 30, 2023 and June 30, 2022, its cash flows for the six-month periods ended June 30, 2023 and June 30, 2022 and the changes in stockholders’ equity for the three and six-month periods ended June 30, 2023 and June 30, 2022. The December 31, 2022 Condensed Consolidated Balance Sheet was derived from the Company’s December 31, 2022 audited consolidated financial statements, but does not include all disclosures and notes normally provided in annual financial statements. The results of operations for the interim periods presented are not necessarily indicative of the results for the full year or for future periods.
Regulated Utility Accounting	Regulated Utility Accounting The accounting records of Artesian Water, Artesian Wastewater, and, effective January 14, 2022, TESI are maintained in accordance with the uniform system of accounts as prescribed by the Delaware Public Service Commission, or the DEPSC. The accounting records of Artesian Water Pennsylvania are maintained in accordance with the uniform system of accounts as prescribed by the Pennsylvania Public Utility Commission, or the PAPUC. The accounting records of Artesian Water Maryland and Artesian Wastewater Maryland are maintained in accordance with the uniform system of accounts as prescribed by the Maryland Public Service Commission, or the MDPSC. Each of these subsidiaries follow the provisions of Financial Accounting Standards Board, or FASB, ASC Topic 980, which provide guidance for companies in regulated industries. These regulated subsidiaries account for the majority of our operating revenue. See Note 17 to our Condensed Consolidated Financial Statements for a full description of our segment information.
Use of Estimates	Use of Estimates The condensed consolidated financial statements were prepared in conformity with generally accepted accounting principles in the U.S., which require management to make certain estimates and assumptions regarding the reported amounts of assets and liabilities including unbilled revenues, credit losses and reserves for bad debt, regulatory asset recovery, lease agreements, goodwill and contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from management's estimates. All additions to utility plant are recorded at cost. Business combinations pursuant to ASC Topic 805 may result in a purchase price allocation and the acquired assets are required to be evaluated by the applicable regulatory agency. Artesian Wastewater acquired TESI in January 2022 and Artesian Water purchased substantially all of the water operating assets from the Town of Clayton in May 2022. As of December 31, 2022, the fair value determination for TESI and the water operating assets acquired from the Town of Clayton was finalized. A third-party valuation specialist assisted with the valuation of the assets acquired.

REVENUE RECOGNITION (Tables)

6 Months Ended

Jun. 30, 2023

REVENUE RECOGNITION [Abstract]

Disaggregation of Revenues

The following table shows the Company’s revenues disaggregated by service type; all revenues are generated within a similar geographical location:

(in thousands)	Three months ended June 30, 2023		Three months ended June 30, 2022		Six months ended June 30, 2023		Six months ended June 30, 2022
Tariff Revenue
Consumption charges	$	12,936	$	12,182	$	23,383	$	22,749
Fixed fees		8,028		7,751		16,066		15,529
Service charges		174		137		354		293
DSIC		1,340		1,282		2,519		2,464
Metered wastewater services		146		129		251		269
Industrial wastewater services		402		422		848		828
Total Tariff Revenue	$	23,026	$	21,903	$	43,421	$	42,132

Non-Tariff Revenue
Service line protection plans	$	1,372	$	1,217	$	2,735	$	2,439
Contract operations		276		242		521		453
Design and installation		16		978		121		1,101
Inspection fees		109		66		187		106
Total Non-Tariff Revenue	$	1,773	$	2,503	$	3,564	$	4,099
Other Operating Revenue	$	452	$	605	$	761	$	967
Total Operating Revenue	$	25,251	$	25,011	$	47,746	$	47,198

Contract Assets and Contract Liabilities

Our contract assets and liabilities consist of the following:

(in thousands)	June 30, 2023		December 31, 2022

Contract Assets – Tariff	$	2,800	$	2,618

Deferred Revenue
Deferred Revenue – Tariff	$	1,394	$	1,231
Deferred Revenue – Non-Tariff		554		438
Total Deferred Revenue	$	1,948	$	1,669

ACCOUNTS RECEIVABLE (Tables)

6 Months Ended

Jun. 30, 2023

ACCOUNTS RECEIVABLE [Abstract]

Changes in Accounts Receivable

The following table summarizes the changes in the Company’s accounts receivable balance:

	June 30,		December 31,
(in thousands)	2023		2022

Customer accounts receivable – water	$	7,562	$	5,981
Customer accounts receivable – wastewater		544		482
Settlement agreement receivable		2,518		2,532
Miscellaneous accounts receivable		1,115		3,781
Developer receivable		622		1,151
		12,361		13,927
Less allowance for doubtful accounts		409		416
Net accounts receivable	$	11,952	$	13,511

LEASES (Tables)

6 Months Ended

Jun. 30, 2023

LEASES [Abstract]

Rent Expense for All Operating Leases Except Those with Terms of 12 Months or Less

Rent expense for all operating leases, except those with terms of 12 months or less comprises:

	(in thousands)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022

Minimum rentals	$	4	$	2	$	6	$	9
Contingent rentals		—		—		—		—

	$	4	$	2	$	6	$	9

Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases is as follows:

	(in thousands)
	Six Months Ended		Six Months Ended
	June 30, 2023		June 30, 2022

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6	$	9
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	500	$	445

Supplemental Balance Sheet Information Related to Leases

Supplemental balance sheet information related to leases is as follows:

	(in thousands, except lease term and discount rate)
	June 30, 2023			December 31, 2022

Operating Leases:
Operating lease right-of-use assets	$	500		$	467

Other current liabilities	$	8			2
Operating lease liabilities		494			466
Total operating lease liabilities	$	502		$	468


Weighted Average Remaining Lease Term
Operating leases	57 years			61 years
Weighted Average Discount Rate
Operating leases		5.0	%		5.0	%

Maturities of Operating Lease Liabilities

Maturities of operating lease liabilities that have initial or remaining non-cancelable lease terms in excess of one year as of June 30, 2023 are as follows:

	(in thousands)
	Operating Leases
Year
2024	$	34
2025		34
2026		34
2027		34
2028		34
Thereafter		1,402
Total undiscounted lease payments	$	1,572
Less effects of discounting		(1,070	)
Total lease liabilities recognized	$	502

STOCK COMPENSATION PLANS (Tables)

6 Months Ended

Jun. 30, 2023

STOCK COMPENSATION PLANS [Abstract]

Changes in Shares of Class A Common Stock Underlying Options and Restricted Stock Awards

The following summary reflects changes in the shares of Class A Stock underlying options and restricted stock awards for the six months ended June 30, 2023:

	Options								Restricted Awards
	Option Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (Yrs.)		Aggregate Intrinsic Value (in thousands)		Outstanding Restricted Stock Awards			Weighted Average Grant Date FairValue
Plan options/restricted stock awards
Outstanding at January 1, 2023		6,750	$	21.86			$	248		5,000		$	45.58
Granted		—		—				—		5,000			54.88
Exercised/vested and released		—		—				—		(5,000	)		45.58
Expired/cancelled		—		—				—		—			—
Outstanding at June 30, 2023		6,750	$	21.86		0.854	$	171		5,000		$	54.88

Exercisable/vested at June 30, 2023		6,750	$	21.86		0.854	$	171		—			—

OTHER DEFERRED ASSETS (Tables)

6 Months Ended

Jun. 30, 2023

OTHER DEFERRED ASSETS [Abstract]

Other Deferred Assets

(in thousands)	June 30, 2023	December 31, 2022

Investment in CoBank	$5,882	$5,351
Settlement agreement receivable-long term	4,991	4,991
Other deferred assets	140	194
	$11,013	$10,536

REGULATORY ASSETS (Tables)

6 Months Ended

Jun. 30, 2023

REGULATORY ASSETS [Abstract]

Amortization Period of Other Regulatory Expense

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	2.5
Maryland rate proceedings	5
Debt related costs	15 to 30 (based on term of related debt)
Deferred costs affiliated interest agreement	20
Goodwill (resulting from acquisition of Mountain Hill Water Company in 2008)	50
Deferred acquisition costs (resulting from purchase of water assets in Cecil County, Maryland in 2011 and Port Deposit, Maryland in 2010)	20
Franchise Costs (resulting from purchase of water assets in Cecil County, Maryland in 2011)	80

Regulatory Assets, Net of Amortization, Comprise

Regulatory assets, net of amortization, comprise:
	(in thousands)
	June 30, 2023		December 31, 2022

Deferred contract costs and other	$	238	$	227
Rate case studies		138		57
Rate proceedings		164		—
Deferred income taxes		454		465
Debt related costs		4,504		4,682
Deferred costs affiliated interest agreement		1,114		1,114
Goodwill		262		266
Deferred acquisition and franchise costs		444		463
	$	7,318	$	7,274

REGULATORY LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2023

REGULATORY LIABILITIES [Abstract]

Regulatory Liabilities

Regulatory liabilities comprise:
	(in thousands)
	June 30, 2023		December 31, 2022

Utility plant retirement cost obligation	$	31	$	-
Deferred settlement refunds		7,487		7,487
Deferred income taxes (related to TCJA)		21,019		21,234
	$	28,537	$	28,721

NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE (Tables)

6 Months Ended

Jun. 30, 2023

NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE [Abstract]

Shares Used in Computing Basic and Diluted Net Income Per Share

The following table summarizes the shares used in computing basic and diluted net income per share:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Weighted average common shares outstanding during the period for Basic computation		9,998		9,452		9,752		9,438
Dilutive effect of employee stock options and awards		4		18		5		26

Weighted average common shares outstanding during the period for Diluted computation		10,002		9,470		9,757		9,464

REGULATORY PROCEEDINGS (Tables)

6 Months Ended

Jun. 30, 2023

REGULATORY PROCEEDINGS [Abstract]

Eligible Plant Improvements

The following table summarizes (1) Artesian Water’s application with the DEPSC to collect DSIC rates and (2) the rate upon which eligible plant improvements are based:

Application Date	11/20/20
DEPSC Approval Date	12/14/20
Effective Date	01/01/21
Cumulative DSIC Rate	7.50%
Net Eligible Plant Improvements – Cumulative Dollars (in millions)	$43.1
Eligible Plant Improvements – Installed Beginning Date	10/01/2014
Eligible Plant Improvements – Installed Ending Date	04/30/2019

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2023

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

Carrying Amount and Fair Value of Long-Term Debt

(in thousands)
	June 30, 2023		December 31, 2022
Carrying amount	$	177,697	$	177,622
Estimated fair value	$	158,543	$	155,425

BUSINESS COMBINATIONS (Tables)

6 Months Ended

Jun. 30, 2023

BUSINESS COMBINATIONS [Abstract]

Preliminary Purchase Price Allocation

The table below sets forth the final purchase price allocation of this acquisition as of December 31, 2022.

(in thousands)
		TESI
	Utility plant	$	25,354
	Cash		280
	Goodwill		1,939
	Other assets		1,033
	Total assets		28,606
	Less: Liabilities and contributions in aid of construction (CIAC)
	Liabilities		2,808
	CIAC		22,676
	Net cash purchase price	$	3,122

BUSINESS SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2023

BUSINESS SEGMENT INFORMATION [Abstract]

Segment Reporting Information, by Segment

(in thousands)
	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Revenues:
Regulated Utility	$	23,668		$	22,636		$	44,501		$	43,305
Other (non-utility)		1,637			2,408			3,353			3,960
Inter-segment elimination		(54	)		(33	)		(108	)		(67	)
Consolidated Revenues	$	25,251		$	25,011		$	47,746		$	47,198

Operating Income:
Regulated Utility	$	6,066		$	6,526		$	9,824		$	10,864
Other (non-utility)		142			317			445			723
Consolidated Operating Income	$	6,208		$	6,843		$	10,269		$	11,587

Income Taxes:
Regulated Utility	$	1,303		$	1,570		$	2,370		$	2,813
Other (non-utility)		290			155			536			331
Consolidated Income Taxes	$	1,593		$	1,725		$	2,906		$	3,144

	June 30, 2023		December 31, 2022
Assets:
Regulated Utility	$	740,135	$	713,113
Other (non-utility)		9,988		6,678
Consolidated Assets	$	750,123	$	719,791

GENERAL (Details) $ in Thousands, gal / d in Millions		3 Months Ended	6 Months Ended
GENERAL (Details) $ in Thousands, gal / d in Millions	Jan. 14, 2022 USD ($)	Jun. 30, 2023 Plan Facility	Jun. 30, 2023 USD ($) gal / d Subsidiary Squarefeet	Jun. 30, 2022 USD ($)
Business Operations [Abstract]
Consideration transferred			$ 0	$ 6,341
Number of subsidiaries not regulated \| Subsidiary			3
Artesian Development purchased area of office space (in square feet) \| Squarefeet			10,000
Artesian Development purchased area of warehouse space (in square feet) \| Squarefeet			10,000
Tidewater Environmental Services Inc [Member]
Business Operations [Abstract]
Consideration transferred	$ 6,400
Note forgiven	$ 2,100
Artesian Utility [Member]
Business Operations [Abstract]
Initial contract period of operating wastewater treatment facilities in Middletown		20 years
Number of wastewater treatment systems facility operations in Middletown \| Facility		3
Capacity of wastewater treatment facilities \| gal / d			3.8
Number of protection plans offered to customers \| Plan		3

REVENUE RECOGNITION, Disaggregated Revenues (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($) Contract	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)
REVENUE RECOGNITION [Abstract]
Minimum number of days for accounts receivable from tariff contract customers			25 days
Minimum number of days due for accounts receivable from SLP Plan customer			25 days
Minimum number of days customers services invoiced in advance			30 days
Number of operation contracts paid in advance \| Contract	1
Disaggregation of Revenue [Abstract]
Other Operating Revenue not in scope of ASC 606	$ 452	$ 605	$ 761	$ 967
Revenue from acquisition	25,251	25,011	47,746	47,198
Tariff Revenue [Member]
Disaggregation of Revenue [Abstract]
Revenue from acquisition	23,026	21,903	43,421	42,132
Tariff Revenue [Member] \| Consumption Charges [Member]
Disaggregation of Revenue [Abstract]
Revenue from acquisition	12,936	12,182	23,383	22,749
Tariff Revenue [Member] \| Fixed Fees [Member]
Disaggregation of Revenue [Abstract]
Revenue from acquisition	8,028	7,751	16,066	15,529
Tariff Revenue [Member] \| Service Charges [Member]
Disaggregation of Revenue [Abstract]
Revenue from acquisition	174	137	354	293
Tariff Revenue [Member] \| DSIC [Member]
Disaggregation of Revenue [Abstract]
Revenue from acquisition	1,340	1,282	2,519	2,464
Tariff Revenue [Member] \| Metered Wastewater Services [Member]
Disaggregation of Revenue [Abstract]
Revenue from acquisition	146	129	251	269
Tariff Revenue [Member] \| Industrial Wastewater Services [Member]
Disaggregation of Revenue [Abstract]
Revenue from acquisition	402	422	848	828
Non-Tariff Revenue [Member]
Disaggregation of Revenue [Abstract]
Revenue from acquisition	1,773	2,503	3,564	4,099
Non-Tariff Revenue [Member] \| Service Line Protection Plans [Member]
Disaggregation of Revenue [Abstract]
Revenue from acquisition	1,372	1,217	2,735	2,439
Non-Tariff Revenue [Member] \| Contract Operations [Member]
Disaggregation of Revenue [Abstract]
Revenue from acquisition	276	242	521	453
Non-Tariff Revenue [Member] \| Design and Installation [Member]
Disaggregation of Revenue [Abstract]
Revenue from acquisition	16	978	121	1,101
Non-Tariff Revenue [Member] \| Inspection Fees [Member]
Disaggregation of Revenue [Abstract]
Revenue from acquisition	$ 109	$ 66	$ 187	$ 106

REVENUE RECOGNITION, Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Contract with Customer, Asset and Liability [Abstract]
Total Deferred Revenue	$ 1,948	$ 1,669
Tariff Revenue [Member]
Contract with Customer, Asset and Liability [Abstract]
Contract Assets	2,800	2,618
Total Deferred Revenue	1,394	1,231
Tariff Deferred Revenue	1,200
Non-Tariff Revenue [Member]
Contract with Customer, Asset and Liability [Abstract]
Total Deferred Revenue	554	$ 438
Tariff Deferred Revenue	$ 300

ACCOUNTS RECEIVABLE (Details) $ in Thousands		1 Months Ended	6 Months Ended
ACCOUNTS RECEIVABLE (Details) $ in Thousands	Jul. 19, 2022 USD ($) Installment	Aug. 31, 2022 USD ($)	Jun. 30, 2023 USD ($) Installment	Dec. 31, 2022 USD ($)
Accounts Receivable [Abstract]
Litigation settlement amount	$ 10,000		$ 10,000
Litigation settlement amount received		$ 2,500
Litigation settlement, remaining amount	$ 5,000		$ 5,000
Number of installments \| Installment	2		2
Changes in Accounts Receivable [Abstract]
Gross accounts receivable			$ 12,361	$ 13,927
Less allowance for doubtful accounts			409	416
Net accounts receivable			11,952	13,511
Customer Accounts Receivable - Water [Member]
Changes in Accounts Receivable [Abstract]
Gross accounts receivable			7,562	5,981
Customer Accounts Receivable - Wastewater [Member]
Changes in Accounts Receivable [Abstract]
Gross accounts receivable			544	482
Settlement Agreement Receivable [Member]
Changes in Accounts Receivable [Abstract]
Gross accounts receivable			2,518	2,532
Miscellaneous Accounts Receivable [Member]
Changes in Accounts Receivable [Abstract]
Gross accounts receivable			1,115	3,781
Developer Receivable [Member]
Changes in Accounts Receivable [Abstract]
Gross accounts receivable			$ 622	$ 1,151

LEASES (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
LEASES (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Operating Lease, Description [Abstract]
Percentage of increase in annual lease payments			3.00%
Rent Expense [Abstract]
Minimum rentals	$ 4	$ 2	$ 6	$ 9
Contingent rentals	0	0	0	0
Rent expenses	4	$ 2	6	9
Cash paid for amounts included in the measurement of lease liabilities [Abstract]
Operating cash flows from operating leases			6	9
Right-of-use assets obtained in exchange for lease obligations [Abstract]
Operating leases			500	$ 445
Operating leases [Abstract]
Operating lease right-of-use assets	500		500		$ 467
Operating lease, liability [Abstract]
Other current liabilities	8		8		2
Operating lease liabilities	494		494		466
Total operating lease liabilities	$ 502		$ 502		$ 468
Weighted Average Remaining Lease Term [Abstract]
Operating leases	57 years		57 years		61 years
Weighted Average Discount Rate [Abstract]
Operating leases	5.00%		5.00%		5.00%
Maturities of Operating Lease Liabilities [Abstract]
2024	$ 34		$ 34
2025	34		34
2026	34		34
2027	34		34
2028	34		34
Thereafter	1,402		1,402
Total undiscounted lease payments	1,572		1,572
Less effects of discounting	(1,070)		(1,070)
Total lease liabilities recognized	$ 502		$ 502		$ 468
Minimum [Member]
Operating Lease, Description [Abstract]
Remaining lease term	5 years		5 years
Maximum [Member]
Operating Lease, Description [Abstract]
Remaining lease term	74 years		74 years
Option to extend lease term	66 years		66 years

STOCK COMPENSATION PLANS (Details)			3 Months Ended		6 Months Ended
STOCK COMPENSATION PLANS (Details)	May 09, 2023 $ / shares shares	May 03, 2022 $ / shares shares	Jun. 30, 2023 USD ($) $ / shares shares	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) Director $ / shares shares	Jun. 30, 2022 USD ($)
Stock Compensation Plans [Abstract]
Compensation expense \| $					$ 116,000	$ 104,000
Number of directors in committee \| Director					3
Stock Options [Member] \| 2015 Equity Compensation Plan [Member]
Stock Compensation Plans [Abstract]
Unvested shares outstanding (in shares)			0		0
Unrecognized expense related to non-vested option shares \| $			$ 0		$ 0
Restricted Stock [Member]
Stock Compensation Plans [Abstract]
Compensation expense \| $					116,000	$ 104,000
Restricted Stock [Member] \| 2015 Equity Compensation Plan [Member]
Stock Compensation Plans [Abstract]
Unrecognized expense related to non-vested option shares \| $			$ 235,000		$ 235,000
Period over which unvested options cost will recognized					10 months 9 days
Class A Stock [Member] \| Stock Options [Member]
Shares [Roll Forward]
Outstanding at beginning of period (in shares)					6,750
Granted (in shares)					0
Exercised/vested and released (in shares)					0
Expired/cancelled (in shares)					0
Outstanding at end of period (in shares)			6,750		6,750
Exercisable/vested at end of period (in shares)			6,750		6,750
Weighted Average Exercise Price [Abstract]
Outstanding at beginning of period (in dollars per shares) \| $ / shares					$ 21.86
Granted, weighted average exercise price (in dollars per share) \| $ / shares					0
Exercised/vested and released, weighted average exercise price (in dollars per shares) \| $ / shares					0
Expired/cancelled, weighted average exercise price (in dollars per share) \| $ / shares					0
Outstanding at end of period (in dollars per shares) \| $ / shares			$ 21.86		21.86
Options exercisable at period end (in dollars per shares) \| $ / shares			$ 21.86		$ 21.86
Shares of Class A Non-Voting Common Stock under option [Abstract]
Outstanding at end of period, weighted average remaining life					10 months 7 days
Exercisable/vested at end of period, weighted average remaining life					10 months 7 days
Outstanding at beginning of period, aggregate intrinsic value \| $					$ 248,000
Granted, aggregate intrinsic value \| $					0
Exercised/vested and released, aggregate intrinsic value \| $					0
Expired/cancelled, aggregate intrinsic value \| $					0
Outstanding at end of period, aggregate intrinsic value \| $			$ 171,000		171,000
Exercisable/vested at end of period, aggregate intrinsic value \| $			171,000		$ 171,000
Class A Stock [Member] \| Restricted Stock [Member]
Stock Compensation Plans [Abstract]
Compensation expense \| $			$ 60,000	$ 55,000
Fair value per share (in dollars per share) \| $ / shares	$ 54.88	$ 45.58
Shares [Roll Forward]
Granted (in shares)	5,000	5,000
Shares [Roll Forward]
Outstanding at beginning of period (in shares)					5,000
Granted (in shares)					5,000
Exercised/vested and released (in shares)					(5,000)
Cancelled (in shares)					0
Outstanding at end of period (in shares)			5,000		5,000
Weighted Average Grant Date Fair Value [Abstract]
Outstanding at beginning of period (in dollars per shares) \| $ / shares					$ 45.58
Granted (in dollars per share) \| $ / shares					54.88
Exercised/vested and released (in dollars per shares) \| $ / shares					45.58
Expired/cancelled (in dollars per share) \| $ / shares					0
Outstanding at end of period (in dollars per shares) \| $ / shares			$ 54.88		$ 54.88

OTHER DEFERRED ASSETS (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Other Deferred Assets [Abstract]
Investment in CoBank	$ 5,882	$ 5,351
Settlement agreement receivable-long-terrm	4,991	4,991
Other deferred assets	140	194
Other deferred assets	$ 11,013	$ 10,536

REGULATORY ASSETS (Details) - USD ($) $ in Thousands	6 Months Ended
REGULATORY ASSETS (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Amortization period of other regulatory expense [Abstract]
Deferred contract costs and other	5 years
Rate case studies	5 years
Deferred costs affiliated interest agreement	20 years
Goodwill	50 years
Deferred acquisition costs	20 years
Franchise costs	80 years
Regulatory assets net of amortization, comprise [Abstract]
Regulatory assets, net	$ 7,318	$ 7,274
Maximum [Member]
Amortization period of other regulatory expense [Abstract]
Debt related cost	30 years
Minimum [Member]
Amortization period of other regulatory expense [Abstract]
Debt related cost	15 years
Delaware [Member]
Amortization period of other regulatory expense [Abstract]
Regulatory rate proceedings	2 years 6 months
Maryland [Member]
Amortization period of other regulatory expense [Abstract]
Regulatory rate proceedings	5 years
Deferred Contract Costs and Other [Member]
Regulatory assets net of amortization, comprise [Abstract]
Regulatory assets, net	$ 238	227
Rate Case Studies [Member]
Regulatory assets net of amortization, comprise [Abstract]
Regulatory assets, net	138	57
Rate Proceedings [Member]
Regulatory assets net of amortization, comprise [Abstract]
Regulatory assets, net	164	0
Deferred Income Taxes [Member]
Regulatory assets net of amortization, comprise [Abstract]
Regulatory assets, net	454	465
Debt Related Costs [Member]
Regulatory assets net of amortization, comprise [Abstract]
Regulatory assets, net	4,504	4,682
Deferred Costs Affiliated Interest Agreement [Member]
Regulatory assets net of amortization, comprise [Abstract]
Regulatory assets, net	1,114	1,114
Goodwill [Member]
Regulatory assets net of amortization, comprise [Abstract]
Regulatory assets, net	262	266
Deferred Acquisition and Franchise Costs [Member]
Regulatory assets net of amortization, comprise [Abstract]
Regulatory assets, net	$ 444	$ 463

REGULATORY LIABILITIES (Details) $ in Thousands		1 Months Ended	6 Months Ended	12 Months Ended
REGULATORY LIABILITIES (Details) $ in Thousands	Jul. 19, 2022 USD ($) Installment	Aug. 31, 2022 USD ($)	Jun. 30, 2023 USD ($) Installment	Dec. 31, 2017 USD ($)	Dec. 31, 2022 USD ($)	Jan. 31, 2019 USD ($)
REGULATORY LIABILITIES [Abstract]
Litigation settlement amount	$ 10,000		$ 10,000
Litigation settlement amount received		$ 2,500
Litigation settlement, remaining amount	$ 5,000		$ 5,000
Number of installments \| Installment	2		2
Federal corporate tax rate			21.00%	34.00%
Decrease in the net deferred income tax liability				$ 24,300
Regulatory Liabilities [Abstract]
Regulatory liabilities			$ 28,537	$ 22,800	$ 28,721
DEPSC [Member]
Regulatory Liabilities [Abstract]
Regulatory liabilities						$ 22,200
Regulatory liabilities, amortization period			49 years 6 months
MDPSC [Member]
Regulatory Liabilities [Abstract]
Regulatory liabilities			$ 600
Utility Plant Retirement Cost Obligation [Member]
Regulatory Liabilities [Abstract]
Regulatory liabilities			31		0
Deferred Settlement Refunds [Member]
Regulatory Liabilities [Abstract]
Regulatory liabilities			7,487		7,487
Deferred Income Taxes [Member]
Regulatory Liabilities [Abstract]
Regulatory liabilities			$ 21,019		$ 21,234

NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE (Details) - $ / shares

3 Months Ended

6 Months Ended

12 Months Ended

Jun. 30, 2023

Jun. 30, 2022

Jun. 30, 2023

Jun. 30, 2022

Dec. 31, 2022

May 23, 2023

Shares used in computing basic and diluted net income per share [Abstract]

Weighted average common shares outstanding during the period for Basic computation (in shares)

9,998,000

9,452,000

9,752,000

9,438,000

Dilutive effect of employee stock options and awards (in shares)

4,000

18,000

5,000

26,000

Weighted average common shares outstanding during the period for Diluted computation (in shares)

10,002,000

9,470,000

9,757,000

9,464,000

Earnings Per Share [Abstract]

Equity per common share (in dollars per share)

$ 0.44

$ 0.53

$ 0.84

$ 1.01

Class A Stock [Member]

Common Stock [Abstract]

Common stock, par value (in dollars per share)

$ 1

Common Stock [Member] | Class A Stock [Member]

Common Stock [Abstract]

Common stock, shares authorized (in shares)

15,000,000

Common stock, shares issued (in shares)

9,393,344

8,577,620

9,393,344

8,577,620

Common stock, shares outstanding (in shares)

9,393,344

8,577,620

9,393,344

8,577,620

Common stock, par value (in dollars per share)

$ 1

Common stock, shares issued during period (in shares)

^[1],[2],[3]

764,000

Earnings Per Share [Abstract]

Equity per common share (in dollars per share)

$ 23.3

$ 19.86

Common Stock [Member] | Class B Stock [Member]

Common Stock [Abstract]

Common stock, shares authorized (in shares)

1,040,000

Common stock, shares issued (in shares)

881,452

Common stock, shares outstanding (in shares)

881,452

Common stock, par value (in dollars per share)

$ 1

Common stock, shares issued during period (in shares)

^[4]

Restricted Stock [Member]

Antidilutive Securities Excluded from Computation of Earnings Per Share [Abstract]

Shares excluded from calculations of diluted net income per share (in shares)

[1]	Artesian Resources Corporation registered 200,000 shares of Class A Common Stock, subsequently adjusted for stock splits, available for purchase through the Company’s 401(k) retirement plan.
[2]	At June 30, 2023 and June 30, 2022, Class A Common Stock had 15,000,000 shares authorized. For the same periods, shares issued, inclusive of treasury shares, were 9,422,321 and 8,606,597, respectively.
[3]	Under the Equity Compensation Plan, effective December 9, 2015, or the 2015 Plan, Artesian Resources Corporation authorized up to 331,500 shares of Class A Common Stock for issuance of grants in the form of stock options, stock units, dividend equivalents and other stock-based awards, subject to adjustment in certain circumstances as discussed in the 2015 Plan. Includes stock compensation expense for June 30, 2023, and June 30, 2022, see Note 6-Stock Compensation Plans.
[4]	At June 30, 2023 and June 30, 2022, Class B Common Stock had 1,040,000 shares authorized and 881,452 shares issued.

REGULATORY PROCEEDINGS (Details) - USD ($) $ in Millions			3 Months Ended		6 Months Ended
REGULATORY PROCEEDINGS (Details) - USD ($) $ in Millions	Apr. 28, 2023	Nov. 20, 2020	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Rate Proceedings [Abstract]
Percentage of revenue increase requested for new rates	23.84%
Annual revenue performance obligation	$ 17.5
Percentage of distribution system infrastructure charge	7.50%
Percentage of DSIC rate upon implementation of temporary increase in base rates charged to customers	16.34%
Percentage of temporary rates permitted	15.00%
Amount of temporary rates permitted	$ 2.5
Term of statutory resolve timeframe					7 months
Period permitted to implement temporary rates					60 days
Other Proceedings [Abstract]
Cumulative DSIC Rate		7.50%
Net Eligible Plant Improvements - Cumulative Dollars		$ 43.1
Maximum [Member]
Rate Proceedings [Abstract]
Percentage of gross water sales in temporary rate increase placed into effect until new rates approved	15.00%
Delaware [Member]
Rate Proceedings [Abstract]
Percentage of gross water sales					15.00%
Period to complete rate case by law					7 months
Delaware [Member] \| Maximum [Member]
Rate Proceedings [Abstract]
Temporary annual rate increase subject to 15% gross water sales limitation					$ 2.5
Percentage of rate relief allowed should a rate case not complete					15.00%
Other Proceedings [Abstract]
Distribution System Improvement Charge rate increase applied between base rate filings					7.50%
Distribution System Improvement Charge rate increase within a 12-month period					5.00%
Artesian Water [Member]
Other Proceedings [Abstract]
Revenue earned in DSIC rate increases			$ 1.3	$ 1.3	$ 2.5	$ 2.5

INCOME TAXES (Details) - USD ($)	3 Months Ended	6 Months Ended
INCOME TAXES (Details) - USD ($)	Sep. 30, 2022	Jun. 30, 2023
Income Taxes [Abstract]
Reversal of reserve related to uncertain tax positions	$ 212,000
Reversal of penalties and interest		$ (10,000)
Income tax penalties and interest accrued for unrecognized tax position		$ 0
State Authorities [Member]
Income Taxes [Abstract]
Tax year open to examination		2019 2020 2021 2022
Federal Authorities [Member]
Income Taxes [Abstract]
Tax year open to examination		2019 2020 2021 2022

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Carrying Amount [Member]
Long-term Financial Liabilities [Abstract]
Long-term debt	$ 177,697	$ 177,622
Estimated Fair Value [Member]
Long-term Financial Liabilities [Abstract]
Long-term debt	$ 158,543	$ 155,425

COMMON STOCK OFFERING (Details) - Class A Stock [Member] - USD ($) $ / shares in Units, $ in Millions			6 Months Ended
	Jun. 16, 2023	May 23, 2023	Jun. 30, 2023
Sale of Common Stock [Abstract]
Sale of common stock (in shares)		695,650
Common stock, par value (in dollars per share)		$ 1
Sale of stock, share price (in dollars per share)		$ 50
Net proceeds from issuance of common stock	$ 3.2	$ 33.0
Option for underwriters to purchase additional units, term			30 days
Option to purchase additional common shares (in shares)	67,689	104,348

BUSINESS COMBINATIONS (Details) $ in Thousands			6 Months Ended
BUSINESS COMBINATIONS (Details) $ in Thousands	May 26, 2022 USD ($) Installment	Jan. 14, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Business Combinations [Abstract]
Consideration transferred			$ 0	$ 6,341
Amount of purchase price paid			0	6,621
Remaining purchase price			0	1,569
Preliminary purchase price allocation [Abstract]
Utility plant			0	33,345
Cash			0	280
Goodwill			1,939		$ 1,939
Other assets			0	1,033
Total assets			0	36,597
Less: Liabilities and contributions in aid of construction (CIAC) [Abstract]
Liabilities			0	2,828
CIAC			0	$ 25,597
Tidewater Environmental Services Inc [Member]
Business Combinations [Abstract]
Consideration transferred		$ 6,400
Note forgiven		2,100
Amount of purchase price paid		$ 3,100
Preliminary purchase price allocation [Abstract]
Utility plant					25,354
Cash					280
Goodwill					1,939
Other assets					1,033
Total assets					28,606
Less: Liabilities and contributions in aid of construction (CIAC) [Abstract]
Liabilities					2,808
CIAC					22,676
Net cash purchase price					$ 3,122
Clayton [Member]
Business Combinations [Abstract]
Amount of purchase price paid	$ 3,400
Remaining purchase price	$ 1,600
Number of installments \| Installment	5
Interest rate	2.00%
Estimated annual revenue from customers acquired			$ 500
Less: Liabilities and contributions in aid of construction (CIAC) [Abstract]
Net cash purchase price	$ 5,000
Clayton [Member] \| Utility Plant [Member]
Less: Liabilities and contributions in aid of construction (CIAC) [Abstract]
CIAC	2,900
Net cash purchase price	$ 7,900

GEOGRAPHIC CONCENTRATION OF CUSTOMERS (Details)	6 Months Ended
GEOGRAPHIC CONCENTRATION OF CUSTOMERS (Details)	Jun. 30, 2023 Customer County
Concentration Risks [Abstract]
Number of counties in which water utility service provided \| County	3
Large Industrial Customer [Member]
Concentration Risks [Abstract]
Number of customers	1
Artesian Water [Member]
Concentration Risks [Abstract]
Number of customers	95,400
Artesian Water Maryland [Member]
Concentration Risks [Abstract]
Number of customers	2,600
Artesian Water Pennsylvania [Member]
Concentration Risks [Abstract]
Number of customers	40
Artesian Wastewater [Member]
Concentration Risks [Abstract]
Number of customers	7,900

BUSINESS SEGMENT INFORMATION (Details) $ in Thousands	3 Months Ended		6 Months Ended
BUSINESS SEGMENT INFORMATION (Details) $ in Thousands	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) Segment Business Subsidiary	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
BUSINESS SEGMENT INFORMATION [Abstract]
Number of reportable segments \| Segment			1
Number of regulated utility subsidiaries \| Subsidiary			5
Number of non-utility businesses \| Business			1
Segment Reporting, Revenue [Abstract]
Revenues	$ 25,251	$ 25,011	$ 47,746	$ 47,198
Segment Reporting, Operating Income [Abstract]
Operating Income	6,208	6,843	10,269	11,587
Segment Reporting, Income Taxes [Abstract]
Income Taxes	1,593	1,725	2,906	3,144
Segment Reporting, Assets [Abstract]
Assets	750,123	719,791	750,123	719,791	$ 719,791
Intersegment Eliminations [Member]
Segment Reporting, Revenue [Abstract]
Revenues	(54)	(33)	(108)	(67)
Regulated Utility [Member] \| Operating Segments [Member]
Segment Reporting, Revenue [Abstract]
Revenues	23,668	22,636	44,501	43,305
Segment Reporting, Operating Income [Abstract]
Operating Income	6,066	6,526	9,824	10,864
Segment Reporting, Income Taxes [Abstract]
Income Taxes	1,303	1,570	2,370	2,813
Segment Reporting, Assets [Abstract]
Assets	740,135	713,113	740,135	713,113
Other (non-utility) [Member] \| Operating Segments [Member]
Segment Reporting, Revenue [Abstract]
Revenues	1,637	2,408	3,353	3,960
Segment Reporting, Operating Income [Abstract]
Operating Income	142	317	445	723
Segment Reporting, Income Taxes [Abstract]
Income Taxes	290	155	536	331
Segment Reporting, Assets [Abstract]
Assets	$ 9,988	$ 6,678	$ 9,988	$ 6,678

LEGAL PROCEEDINGS (Details) $ in Millions		1 Months Ended	6 Months Ended
LEGAL PROCEEDINGS (Details) $ in Millions	Jul. 19, 2022 USD ($) Installment	Aug. 31, 2022 USD ($)	Jun. 30, 2023 USD ($) Installment
LEGAL PROCEEDINGS [Abstract]
Litigation settlement amount	$ 10.0		$ 10.0
Litigation settlement amount to be received		$ 2.5
Litigation settlement, remaining amount	$ 5.0		$ 5.0
Number of installments \| Installment	2		2

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