Artesian Resources Corp (NASDAQ:ARTNA), a Delaware-based water supply company, has received approval for a rate increase from the Delaware Public Service Commission (DEPSC). The final order, issued on Wednesday, allows the company to increase water sales revenue by approximately $11.2 million annually, translating to a 15.2% hike effective from the same day.
The approved rates replace temporary rates set since November 28, 2023, which had authorized a revenue increase of about $10.8 million or 14.6%. This adjustment aligns with the settlement agreement reached on May 22, 2024, between Artesian Water Company, Inc., DEPSC staff, and the Division of the Public Advocate to resolve Artesian Water’s rate application from April 2023.
Artesian Water, a subsidiary of Artesian Resources, will leverage the new rates to support its capital improvement initiatives and manage rising operational costs. These costs include chemicals and electricity for water treatment, water quality testing, fuel, taxes, interest, labor, and benefits. The company last filed a comprehensive application for a base rate increase in April 2014.
Additionally, the DEPSC has approved a Distribution System Improvement Charges (DSIC) increase of 0.34%, set to take effect on July 1, 2024. The DSIC mechanism permits recovery of specific infrastructure investments. Previously, a 7.50% DSIC had been in place since January 1, 2021, which was reset to zero when the temporary rates were implemented in November 2023. The DSIC is subject to periodic DEPSC audits.
The new rates are expected to provide Artesian Water with the financial support necessary for maintaining and enhancing its water distribution infrastructure while ensuring the provision of high-quality water services to its customers.
This information is based on a press release statement.
In other recent news, Artesian Resources Corporation has announced a 2% increase in its quarterly dividend for Class A and Class B common stock, setting the annualized dividend at $1.182 per share. The forthcoming quarterly rate is projected at $0.2955 per share, with shareholders on record as of the close of business on a recent day now eligible for the dividend. This increase marks Artesian's 126th consecutive quarterly dividend and extends its record to 28 years of consistent dividend growth.
Dian C. Taylor, Chair, President, and CEO of Artesian Resources, underscored the dividend increase as a testament to the company's ongoing commitment to its long-term strategy, which includes proactive investments in infrastructure and customer base expansion. These are the most recent developments for Artesian Resources Corporation, a key water utility on the Delmarva Peninsula.
InvestingPro Insights
Artesian Resources Corp (NASDAQ:ARTNA) has demonstrated a commitment to consistent shareholder returns, having raised its dividend for 31 consecutive years and maintained dividend payments for 32 consecutive years. This consistency is a notable aspect for investors seeking stable dividend-paying stocks. The company's ability to handle its short-term obligations is also evident, as its liquid assets exceed these liabilities.
InvestingPro Data shows that Artesian Resources has a market capitalization of $348.79M and a P/E ratio of 19.96, which adjusts to 21.34 when considering the last twelve months as of Q1 2024. Furthermore, the company's revenue growth for the last quarter of Q1 2024 was 9.11%, indicating a healthy upward trend in sales.
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