About Artesian Resources

Artesian Resources Corporation, through its wholly-owned subsidiaries, provides water, wastewater and other services in Delaware, Maryland, and Pennsylvania. The company distributes and sells water, including water for public and private fire protection, to residential, commercial, industrial, municipal and utility customers in the states of Delaware, Maryland, and Pennsylvania. The company provides wastewater services to customers in Delaware. In addition, the company provides contract water and wastewater operations, and water, sewer and internal Service Line Protection Plans. The company is the holding company of five regulated public utilities: Artesian Water Company, Inc., or Artesian Water; Artesian Water Pennsylvania, Inc., or Artesian Water Pennsylvania; Artesian Water Maryland, Inc., or Artesian Water Maryland; Artesian Wastewater Management, Inc., or Artesian Wastewater; and Artesian Wastewater Maryland, Inc., or Artesian Wastewater Maryland, as well as three non-utility subsidiaries: Artesian Utility Development, Inc., or Artesian Utility; Artesian Development Corporation, or Artesian Development; and Artesian Storm Water Services, Inc., or Artesian Storm Water. Effective January 14, 2022, Artesian Wastewater is the holding company of Tidewater Environmental Services, Inc. dba Artesian Wastewater, or TESI, a regulated public utility. Market The company’s market area is the Delmarva Peninsula. The company’s largest service area is in the state of Delaware. Substantial portions of Delaware, particularly outside of northern New Castle County, are not served by a public water or wastewater system and represent potential opportunities for Artesian Water and Artesian Wastewater to obtain new exclusive franchised service areas. The company continues to focus resources on developing and serving existing service territories and obtaining new territories throughout Delaware. The company holds Certificates of Public Convenience and Necessity, or CPCNs, for approximately 305 square miles of exclusive water service territory, most of which is in Delaware with some territory being in Maryland and Pennsylvania. The company’s largest connected regional water system, consisting of approximately 141 square miles and 78,600 metered customers, is located in northern New Castle County and portions of southern New Castle County, Delaware. The company holds CPCNs for approximately 58 square miles of wastewater service territory located in Sussex County, Delaware. In January 2022, approximately 23 square miles of wastewater service territory, located in Sussex County, Delaware, was added upon the closing of the acquisition of TESI. A significant portion of the company’s exclusive service territory is in Sussex County, Delaware and remains undeveloped, and if and when development occurs and there is population growth in these areas, the company anticipates it will increase the company’s customer base by providing water and/or wastewater service to the newly developed areas and new customers. Subsidiaries Artesian Water Artesian Water, the company’s principal subsidiary, 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 the company’s 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. The company derive about 90% of the company’s self-supplied groundwater from wells that pump groundwater from aquifers and other formations located in the Atlantic Coastal Plain. The remaining 10% of the company’s groundwater supply comes from wells in the Piedmont Province. The company uses a variety of treatment methods, including aeration, pH adjustment, chlorination, fluoridation, ultra violet oxidation, arsenic removal, nitrate removal, radium removal, iron removal, and carbon adsorption to meet federal, state and local water quality standards. Additionally, a corrosion inhibitor is added to the company’s self-supplied groundwater and to supply from interconnections. The company has different water treatment facilities in its Delaware systems. All water supplies that the company purchases from neighboring utilities are potable. To supplement the company’s groundwater supply, the company purchases treated surface water through interconnections only in the northern service area of the company’s New Castle County, Delaware system. The treated surface water is blended with the company’s groundwater supply for distribution to its customers. Nearly 95% of the overall 8.6 billion gallons of water the company distributed in all of the company’s Delaware systems during 2022 came from the company’s groundwater wells, while the remaining 5% came from interconnections with other utilities and municipalities. In Delaware in 2022, the company pumped an average of 22.2 million gallons per day, or mgd, from the company’s groundwater wells and obtained an average of approximately 1.3 mgd from interconnections. The company’s peak water supply capacity is approximately 57.7 mgd. Most of the company’s New Castle County, Delaware water system is interconnected. In the remainder of the state of Delaware, the company has several satellite systems that have not yet been connected by transmission and distribution facilities. The company intends to join these systems into larger integrated regional systems through the construction of a transmission and distribution network as development continues and the company’s expansion efforts provide the company with contiguous exclusive service territories. In Delaware, the company has 21 interconnections with two neighboring water utilities and six municipalities that provide the company with the ability to purchase or sell water. As of December 31, 2022, the company was serving customers through approximately 1,442 miles of transmission and distribution mains. Mains range in diameter from two inches to twenty-four inches, and most of the mains are made of ductile iron or cast iron. The company has 35 storage tanks in Delaware, most of which are elevated, providing total system storage of approximately 44.0 million gallons. The company has developed and is using an Aquifer Storage and Recovery, or ASR, system in New Castle County, Delaware. The company’s ASR system provides approximately 130.0 million gallons of storage capacity, which can be withdrawn at an average rate of approximately 1.0 mgd. At some locations, the company relies on hydro-pneumatic tanks to maintain adequate system pressures. Where possible, the company combines its smaller satellite systems with systems having elevated storage facilities. Artesian Water Maryland Artesian Water Maryland distributes and sells water to residential, commercial, industrial and municipal customers in Cecil County, Maryland. Artesian Water Maryland owns and operates 9 public water systems. The majority of the 0.1 billion gallons of water the company distributed in all of its Maryland systems during 2022 came from the company’s groundwater wells, while a portion came from treated surface water. The company has ten separate water treatment facilities in its Maryland systems. The company has one water treatment facility that treats surface water through an intake in the Susquehanna River, located in Cecil County, Maryland, which has the ability to supply up to 1.0 mgd of water. The company’s peak water supply capacity is approximately 2.0 mgd. The company has 8 storage tanks capable of storing approximately 2.5 million gallons. The company has in place sufficient capacity to provide water service for the foreseeable future to all existing and new customers in all of the company’s service territories. In Maryland, the company has one interconnection with the Artesian Water system in Delaware, one interconnection with a neighboring utility, and four interconnections with municipalities. These interconnections are capable of providing over 3.0 mgd of water to the company’s Maryland systems. Artesian Water Pennsylvania Artesian Water Pennsylvania provides water service to a residential community in Chester County, Pennsylvania. Artesian Wastewater 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. Artesian Wastewater owns and operates four wastewater treatment facilities, which, combined, are permitted to treat and/or dispose of approximately 2.3 mgd. Artesian Wastewater and Sussex County, a political subdivision of Delaware, provide reciprocal services to address the need of each for additional wastewater treatment and disposal capacity in certain service areas within Sussex County. Artesian Wastewater received an operations permit in March 2020 for a disposal facility that includes a 90-million gallon storage lagoon and spray irrigation to agricultural land. This facility provides treated process wastewater disposal services for an industrial customer at a rate up to 1.5 mgd. The company began operating this facility in late June 2021, shortly after the industrial customer received its process wastewater treatment operating permit. TESI 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 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. This acquisition more than doubled the number of wastewater customers served by Artesian’s Delaware wastewater subsidiaries in Sussex County, Delaware and included all residents within the town of Milton, Delaware. TESI owns and operates seven wastewater treatment facilities, which, combined, are permitted to treat and/or dispose of approximately 713,000 gallons per day. Artesian Wastewater Maryland Artesian Wastewater Maryland is authorized and able to provide regulated wastewater services to customers in the state of Maryland. It is not providing these services. Artesian Utility Artesian Utility 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 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 operates three wastewater treatment systems with a combined capacity of up to approximately 3.8 mgd. 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 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 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 Artesian Storm Water provides design, installation, maintenance and repair services related to existing or proposed storm water management systems in Delaware and the surrounding areas. The ability to offer storm water services will complement the primary water and wastewater services that the company provides. Artesian Storm Water is not actively seeking new opportunities. Government Regulations The United States Environmental Protection Agency, or the EPA, the Delaware Department of Natural Resources and Environmental Control, or DNREC, and DPH, regulate the water quality of the company’s treatment and distribution systems in Delaware, as do the EPA and the MDE, with respect to the company’s operations in Maryland. The Chester Water Authority, which supplies water to Artesian Water through an interconnection in northern New Castle County, is regulated by the Pennsylvania Department of Environmental Protection, as well as the EPA. The company is in material compliance with all current federal, state and local water quality standards, including regulations under the federal Safe Drinking Water Act. The company is in full compliance with the requirements of the Safe Drinking Water Act. The company is fully compliant with the current LCR and is actively examining the revised LCR to ensure the company is fully compliant on or before the compliance deadline date, which is expected to be in October 2024. The DPH is the EPA's agent for enforcing the Safe Drinking Water Act in Delaware and, in that capacity, monitors the activities of Artesian Water and reviews the results of water quality tests performed by Artesian Water for adherence to applicable regulations. Artesian Water is also subject to other laws regulating substances and contaminants in water, including rules for volatile organic compounds and the Total Coliform Rule. Under Delaware state laws and regulations, the company is required to file applications with DNREC for water allocation permits for each of the company’s operating wells pumping greater than 50,000 gallons per day. For any wells in the Delaware River Basin, the company must also file allocation permits with the Delaware River Basin Commission, or DRBC. Under Delaware state laws and regulations, the company is required to hold a permit from DNREC for the construction, operation, maintenance or repair of any on-site wastewater treatment and disposal systems with daily design flow rates of 2,500 gallons or greater. The company works to ensure that the company operates environmentally friendly wastewater systems that meet federal, state and local laws. History Artesian Resources Corporation was founded in 1905. The company, a Delaware Corporation, was incorporated in Delaware in 1927.