SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q
                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                                          Commission File
For Quarter Ended: March 31, 2003                         No. 0-422

                             MIDDLESEX WATER COMPANY
             (Exact name of registrant as specified in its charter)

INCORPORATED IN NEW JERSEY                               22-1114430
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                           Identification No.)

1500 RONSON ROAD, ISELIN, NJ                             08830
(Address of principal executive offices)                 (Zip Code)

                                 (732) 634-1500
              (Registrant's telephone number, including area code)

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 and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that this registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 30 days.

                                YES |X|.  NO |_|.

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12-2 of the Securities Exchange Act of 1934). Yes |X| No |_|

Indicate the number of shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date.

            Class                        Outstanding at March 31, 2003
            -----                        -----------------------------
Common Stock, No Par Value                        7,810,409

INDEX PART I. FINANCIAL INFORMATION PAGE Item 1. Financial Statements: Consolidated Statements of Income 1 Consolidated Balance Sheets 2 Consolidated Statements of Capitalization and Retained Earnings 4 Consolidated Statements of Cash Flows 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 3. Quantitative and Qualitative Disclosures of Market Risk 11 PART II. OTHER INFORMATION 12 SIGNATURE 13 CERTIFICATIONS 14-15

MIDDLESEX WATER COMPANY CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Twelve Months Ended March 31, Ended March 31, 2003 2002 2003 2002 ---- ---- ---- ---- Operating Revenues $14,981,373 $14,229,403 $62,684,756 $60,723,650 ----------- ----------- ----------- ----------- Operating Expenses: Operations 7,811,629 7,213,568 30,516,982 29,212,127 Maintenance 975,854 657,564 3,165,499 2,753,784 Depreciation 1,280,180 1,295,718 4,947,730 5,097,272 Other Taxes 1,923,990 1,851,660 7,931,203 7,789,069 Federal Income Taxes 613,871 698,905 3,792,543 3,937,614 ----------- ----------- ----------- ----------- Total Operating Expenses 12,605,524 11,717,415 50,353,957 48,789,866 ----------- ----------- ----------- ----------- Operating Income 2,375,849 2,511,988 12,330,799 11,933,784 Other Income: Allowance for Funds Used During Construction 92,606 70,283 291,991 193,987 Other - Net 774 27,913 145,071 319,105 ----------- ----------- ----------- ----------- Total Other Income 93,380 98,196 437,062 513,092 Income Before Interest Charges 2,469,229 2,610,184 12,767,861 12,446,876 ----------- ----------- ----------- ----------- Interest Charges 1,244,348 1,333,478 5,054,333 5,100,836 ----------- ----------- ----------- ----------- Net Income 1,224,881 1,276,706 7,713,528 7,346,040 Preferred Stock Dividend Requirements 63,697 63,697 254,786 254,786 ----------- ----------- ----------- ----------- Earnings Applicable to Common Stock $ 1,161,184 $ 1,213,009 $ 7,458,742 $ 7,091,254 =========== =========== =========== =========== Earnings per share of Common Stock: Basic $ 0.15 $ 0.16 $ 0.96 $ 0.93 Diluted $ 0.15 $ 0.16 $ 0.96 $ 0.93 Average Number of Common Shares Outstanding : Basic 7,783,877 7,639,843 7,745,741 7,613,209 Diluted 8,041,232 7,897,198 8,003,096 7,870,564 Cash Dividends Paid per Common Share $ 0.215 $ 0.210 $ 0.850 $ 0.833 See Notes to Consolidated Financial Statements. -1-

MIDDLESEX WATER COMPANY CONSOLIDATED BALANCE SHEETS ASSETS AND OTHER DEBITS (Unaudited) March 31, December 31, 2003 2002 ------------ ------------ UTILITY PLANT: Water Production $ 73,034,406 $ 72,212,878 Transmission and Distribution 162,514,527 158,412,075 General 18,810,740 18,618,211 Construction Work in Progress 4,904,817 6,619,767 ------------ ------------ TOTAL 259,264,490 255,862,931 Less Accumulated Depreciation 49,027,484 47,919,527 ------------ ------------ UTILITY PLANT-NET 210,237,006 207,943,404 ------------ ------------ NONUTILITY ASSETS-NET 3,736,618 3,424,492 ------------ ------------ CURRENT ASSETS: Cash and Cash Equivalents 4,923,968 2,937,894 Temporary Cash Investments-Restricted 5,396,206 6,146,699 Accounts Receivable (net of allowance for doubtful accounts) 5,535,992 6,028,302 Unbilled Revenues 3,140,548 3,181,091 Materials and Supplies (at average cost) 1,261,034 1,190,337 Prepayments and Other Current Assets 613,440 815,392 ------------ ------------ TOTAL CURRENT ASSETS 20,871,188 20,299,715 ------------ ------------ DEFERRED CHARGES: Unamortized Debt Expense 3,200,904 3,239,364 Preliminary Survey and Investigation Charges 1,397,671 1,098,468 Regulatory Assets Income Taxes 6,287,873 6,287,873 Post Retirement Costs 847,708 869,260 Other 1,425,092 1,441,656 ------------ ------------ TOTAL DEFERRED CHARGES 13,159,248 12,936,621 ------------ ------------ TOTAL $248,004,060 $244,604,232 ============ ============ See Notes to Consolidated Financial Statements. -2-

MIDDLESEX WATER COMPANY CONSOLIDATED BALANCE SHEETS LIABILITIES AND OTHER CREDITS (Unaudited) March 31, December 31, 2003 2002 ------------ ------------ CAPITALIZATION (see accompanying statements) $168,526,024 $168,047,689 ------------ ------------ CURRENT LIABILITIES: Current Portion of Long-term Debt 637,729 639,427 Notes Payable 18,475,000 17,650,000 Accounts Payable 2,453,722 2,059,877 Taxes Accrued 7,864,708 5,898,751 Interest Accrued 1,190,803 1,614,278 Other 1,337,371 1,716,270 ------------ ------------ TOTAL CURRENT LIABILITIES 31,959,333 29,578,603 ------------ ------------ DEFERRED CREDITS: Customer Advances for Construction 10,937,971 10,881,815 Accumulated Deferred Investment Tax Credits 1,834,145 1,853,799 Accumulated Deferred Federal Income Taxes 13,329,517 13,241,901 Employee Benefit Plans 5,513,564 5,279,737 Other 746,267 814,897 ------------ ------------ TOTAL DEFERRED CREDITS 32,361,464 32,072,149 ------------ ------------ CONTRIBUTIONS IN AID OF CONSTRUCTION 15,157,239 14,905,791 ------------ ------------ TOTAL $248,004,060 $244,604,232 ============ ============ See Notes to Consolidated Financial Statements. -3-

MIDDLESEX WATER COMPANY CONSOLIDATED STATEMENTS OF CAPITALIZATION AND RETAINED EARNINGS (Unaudited) March 31, December 31, 2003 2002 ------------- ------------- CAPITALIZATION: Common Stock, No Par Value (Note 6): Shares Authorized, 20,000,000 Shares Outstanding - 2003 - 7,810,409 $ 54,779,698 $ 53,866,250 2002 - 7,767,367 Restricted Stock Plan (495,429) (552,081) ------------- ------------- TOTAL COMMON STOCK 54,284,269 53,314,169 ------------- ------------- Cumulative Preference Stock, No Par Value Shares Authorized, 100,000; Shares Outstanding, None Cumulative Preferred Stock, No Par Value Shares Authorized - 140,497 Convertible: Shares Outstanding, $7.00 Series - 14,881 1,562,505 1,562,505 Shares Outstanding, $8.00 Series - 12,000 1,398,857 1,398,857 Nonredeemable: Shares Outstanding, $7.00 Series - 1,017 101,700 101,700 Shares Outstanding, $4.75 Series - 10,000 1,000,000 1,000,000 ------------- ------------- TOTAL CUMULATIVE PREFERRED STOCK 4,063,062 4,063,062 ------------- ------------- Long-term Debt: 8.05% Amortizing Secured Note, due December 20, 2021 3,187,242 3,203,401 4.22% State Revolving Trust Note, due December 31, 2022 192,281 67,350 4.00% State Revolving Trust Bond, due September 1, 2021 850,000 850,000 0.00% State Revolving Fund Bond, due September 1, 2021 718,634 730,017 First Mortgage Bonds: 5.20%, Series S, due October 1, 2022 12,000,000 12,000,000 5.25%, Series T, due October 1, 2023 6,500,000 6,500,000 6.40%, Series U, due February 1, 2009 15,000,000 15,000,000 5.25%, Series V, due February 1, 2029 10,000,000 10,000,000 5.35%, Series W, due February 1, 2038 23,000,000 23,000,000 0.00%, Series X, due September 1, 2018 848,464 862,088 4.25%, Series Y, due September 1, 2018 1,010,000 1,010,000 0.00%, Series Z, due September 1, 2019 1,875,500 1,907,568 5.25%, Series AA, due September 1, 2019 2,265,000 2,265,000 0.00%, Series BB, due September 1, 2021 2,251,718 2,287,385 4.00%, Series CC, due September 1, 2021 2,440,000 2,440,000 5.10%, Series DD, due January 1, 2032 6,000,000 6,000,000 ------------- ------------- SUBTOTAL LONG-TERM DEBT 88,138,839 88,122,809 ------------- ------------- Less: Current Portion of Long-term Debt (637,729) (639,427) ------------- ------------- TOTAL LONG-TERM DEBT 87,501,110 87,483,382 ------------- ------------- TOTAL CAPITALIZATION $ 145,848,441 $ 144,860,613 ============= ============= Three Months Ended Year Ended March 31, December 31, 2003 2002 ------------- ------------- RETAINED EARNINGS: BALANCE AT BEGINNING OF PERIOD $ 23,187,076 $ 22,190,691 Net Income 1,224,881 7,765,353 ------------- ------------- TOTAL 24,411,957 29,956,044 ------------- ------------- Cash Dividends: Cumulative Preferred Stock 63,697 254,786 Common Stock 1,670,677 6,510,494 Common Stock Expenses -- 3,688 ------------- ------------- TOTAL DEDUCTIONS 1,734,374 6,768,968 ------------- ------------- BALANCE AT END OF PERIOD $ 22,677,583 $ 23,187,076 ============= ============= See Notes to Consolidated Financial Statements. -4-

MIDDLESEX WATER COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, Twelve Months Ended March 31, 2003 2002 2003 2002 ---- ---- ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 1,224,881 $ 1,276,706 $ 7,713,528 $ 7,346,040 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 1,391,893 1,392,152 4,963,008 5,369,609 Provision for Deferred Income Taxes 39,393 766 186,651 363,933 Allowance for Funds Used During Construction (92,606) (70,283) (291,991) (193,987) Changes in Current Assets and Liabilities: Accounts Receivable 492,310 1,240,077 (110,349) 187,717 Accounts Payable 393,845 (262,284) 319,671 245,740 Accrued Taxes 1,965,957 2,044,084 (510,253) 626,337 Accrued Interest (423,475) (963,699) 340,606 136,107 Unbilled Revenues 40,543 (175,652) (163,881) (336,657) Employee Benefit Plans 233,827 151,873 99,016 527,023 Other-Net (250,724) (371,978) (694,480) 9,882 ------------ ------------ ------------ ------------ NET CASH PROVIDED BY OPERATING ACTIVITIES 5,015,844 4,261,762 11,851,526 14,281,744 ------------ ------------ ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Utility Plant Expenditures* (3,797,087) (3,803,987) (16,482,195) (15,267,847) Note Receivable -- -- -- 105,500 Preliminary Survey and Investigation Charges (299,203) 32,899 (486,948) (110,646) Other-Net (32,891) (5,366) 1,417 573,295 ------------ ------------ ------------ ------------ NET CASH USED IN INVESTING ACTIVITIES (4,129,181) (3,776,454) (16,967,726) (14,699,698) ------------ ------------ ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Redemption of Long-term Debt (108,901) (6,062,301) (490,436) (6,216,618) Proceeds from Issuance of Long-term Debt 124,931 6,000,000 192,281 12,390,000 Short-term Bank Borrowings 825,000 (1,600,000) 6,850,000 4,600,000 Deferred Debt Issuance Expenses (35,442) (600,301) 54,041 (611,741) Temporary Cash Investments-Restricted 750,493 1,179,098 2,634,979 (5,428,735) Proceeds from Issuance of Common Stock-Net 970,100 769,693 3,411,267 1,706,150 Payment of Common Dividends (1,670,677) (1,602,400) (6,578,771) (6,340,902) Payment of Preferred Dividends (63,697) (63,697) (254,786) (254,786) Construction Advances and Contributions-Net 307,604 50,310 1,131,499 481,098 ------------ ------------ ------------ ------------ NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES 1,099,411 (1,929,598) 6,950,074 324,466 ------------ ------------ ------------ ------------ NET CHANGE IN CASH AND CASH EQUIVALENTS 1,986,074 (1,444,290) 1,833,874 (93,488) ------------ ------------ ------------ ------------ CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,937,894 4,534,384 3,090,094 3,183,582 ------------ ------------ ------------ ------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,923,968 $ 3,090,094 $ 4,923,968 $ 3,090,094 ============ ============ ============ ============ * Excludes Allowance for Funds Used During Construction SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: Cash Paid During the Period for: Interest (net of amounts capitalized) $ 1,578,168 $ 2,217,732 $ 4,194,555 $ 4,686,925 Income Taxes $ -- $ 60,000 $ 4,177,000 $ 3,609,792 See Notes to Consolidated Financial Statements. -5-

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 - Summary of Significant Accounting Policies Organization - Middlesex Water Company (Middlesex) is the parent company and sole shareholder of Tidewater Utilities, Inc. (Tidewater), Pinelands Water Company, Pinelands Wastewater Company, Utility Service Affiliates, Inc. (USA), Utility Service Affiliates (Perth Amboy) Inc. (USA-PA) and Bayview Water Company. Southern Shores Water Company, LLC and White Marsh Environmental Systems, Inc. are wholly-owned subsidiaries of Tidewater. The financial statements for Middlesex and its wholly owned subsidiaries (the Company) are reported on a consolidated basis. All intercompany accounts and transactions have been eliminated. The consolidated notes accompanying the 2002 Form 10-K are applicable to this report and, in the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of March 31, 2003 and the results of operations and cash flows for the periods ended March 31, 2003 and 2002. Information included in the Balance Sheet as of December 31, 2002, has been derived from the Company's audited financial statements included in its annual report on Form 10-K for the year ended December 31, 2002. Note 2 - Capitalization Common Stock - During the three months ended March 31, 2003, there were 43,042 common shares ($0.9 million) issued under the Company's Dividend Reinvestment and Common Stock Purchase Plan. The increase in participation in this Plan can be attributed to the 5% discount on optional cash payments and reinvested dividends that began on February 28, 2003. The discount is scheduled to continue until the earlier of September 2, 2003 or when 150,000 shares are issued during the discount period. Long-term Debt - Tidewater received approval from the Delaware Public Service Commission (PSC) to borrow $13.8 million to fund a portion of its multi-year capital program and refinance some of its short-term debt. Subsequent to the PSC approval, Tidewater closed on a Delaware State Revolving Fund (SRF) loan of $3.3 million. The Delaware SRF program will allow, but does not obligate, Tidewater to draw down against a General Obligation Note for six specific projects. Tidewater will be charged an annual fee, which is a combination of interest charges and administrative fees, of 3.60% on the outstanding principal amount. All unpaid principal and fees must be paid on or before May 1, 2025. Tidewater is in the process of completing a loan transaction of $10.5 million with CoBank, a financial institution specializing in loans to rural utilities. Terms of the loan include a maximum loan life of twenty-five years with monthly principal payments. The proceeds will be used to retire short-term debt. The CoBank loan is expected to close in May 2003. -6-

Note 3 - Earnings Per Share Basic earnings per share (EPS) are computed on the basis of the weighted average number of shares outstanding. Diluted EPS assumes the conversion of both the Convertible Preferred Stock $7.00 Series and the Convertible Preferred Stock $8.00 Series. (In Thousands Except for per Share Amounts) Three Months Ended Twelve Months Ended March 31 March 31 2003 2002 2003 2002 Basic: Income Shares Income Shares Income Shares Income Shares - ----------------------------------------------------------------------------------------------------------------- Net Income $ 1,225 7,784 $ 1,277 7,640 $ 7,714 7,746 $ 7,346 7,613 Preferred Dividend (64) (64) (255) (255) -------- -------- -------- -------- -------- -------- -------- -------- Earnings Applicable to Common Stock $ 1,161 7,784 $ 1,213 7,640 $ 7,459 7,746 $ 7,091 7,613 Basic EPS $ 0.15 $ 0.16 $ 0.96 $ 0.93 Diluted: - ----------------------------------------------------------------------------------------------------------------- Earnings Applicable to Common Stock $ 1,161 7,784 $ 1,213 7,640 $ 7,459 7,746 $ 7,091 7,613 $7.00 Series Dividend 26 134 26 134 104 134 104 134 $8.00 Series Dividend 24 123 24 123 96 123 96 123 -------- -------- -------- -------- -------- -------- -------- -------- Adjusted Earnings Applicable to Common Stock $ 1,211 8,041 $ 1,263 7,897 $ 7,659 8,003 $ 7,291 7,870 Diluted EPS $ 0.15 $ 0.16 $ 0.96 $ 0.93 Note 4 - Business Segment Data The Company has identified two reportable segments. One is the regulated business of collecting, treating and distributing water on a retail and wholesale basis to residential, commercial, industrial and fire protection customers in parts of New Jersey and Delaware. It also operates a regulated wastewater system in New Jersey. The Company is subject to regulations as to its rates, services and other matters by the States of New Jersey and Delaware with respect to utility service within these States. The other segment is the non-regulated contract services for the operation and maintenance of municipal and private water and wastewater systems in New Jersey and Delaware. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 1 to the Consolidated Financial Statements. Inter-segment transactions relating to operational costs are treated as pass through expenses. Finance charges on inter-segment loan activities are based on interest rates that are below what would normally be charged by a third party lender. -7-

(Thousands of Dollars) Three Months Ended Twelve Months Ended March 31, March 31, Operations by Segments: 2003 2002 2003 2002 - ------------------------------------------------------------------------------------------ Revenues: Regulated $ 12,949 $ 12,527 $ 54,820 $ 53,412 Non - Regulated 2,044 1,711 7,909 7,347 Inter-segment Elimination (12) (9) (44) (36) ------------------------------------------------ Consolidated Revenues $ 14,981 $ 14,229 $ 62,685 $ 60,723 ------------------------------------------------ Operating Income: Regulated $ 2,273 $ 2,456 $ 11,849 $ 11,527 Non - Regulated 103 56 482 407 Inter-segment Elimination -- -- -- -- ------------------------------------------------ Consolidated Operating Income $ 2,376 $ 2,512 $ 12,331 $ 11,934 ------------------------------------------------ Depreciation/Amortization: Regulated $ 1,270 $ 1,287 $ 4,908 $ 5,046 Non - Regulated 10 9 40 51 Inter-segment Elimination Consolidation -- -- -- -- ------------------------------------------------ Depreciation/Amortization $ 1,280 $ 1,296 $ 4,948 $ 5,097 ------------------------------------------------ Other Income: Regulated $ 610 $ 422 $ 2,964 $ 1,959 Non - Regulated -- 34 (12) 46 Inter-segment Elimination (517) (358) (2,515) (1,492) ------------------------------------------------ Consolidated Other Income $ 93 $ 98 $ 437 $ 513 ------------------------------------------------ Interest Expense: Regulated $ 1,550 $ 1,581 $ 6,252 $ 6,006 Non - Regulated 15 13 56 55 Inter-segment Elimination (321) (261) (1,254) (960) ------------------------------------------------ Consolidated Interest Expense $ 1,244 $ 1,333 $ 5,054 $ 5,101 ------------------------------------------------ Net Income: Regulated $ 1,333 $ 1,298 $ 8,558 $ 7,481 Non - Regulated 88 76 416 397 Inter-segment Elimination (196) (97) (1,260) (532) ------------------------------------------------ Consolidated Net Income $ 1,225 $ 1,277 $ 7,714 $ 7,346 ------------------------------------------------ Capital Expenditures: Regulated $ 3,471 $ 3,760 $ 15,771 $ 15,161 Non - Regulated 326 44 711 107 Inter-segment Elimination -- -- -- -- ------------------------------------------------ Total Capital Expenditures $ 3,797 $ 3,804 $ 16,482 $ 15,268 ------------------------------------------------ As of As of March 31, December 31, 2003 2002 ---- ---- Assets: Regulated $ 284,482 $ 280,655 Non - Regulated 4,163 4,093 Inter-segment Elimination (40,641) (40,144) ---------------------- Consolidated Assets $ 248,004 $ 244,604 ---------------------- -8-

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations - Three Months Ended March 31, 2003 Operating revenues for the three months ended March 31, 2003 were up $0.8 million or 5.3% from the same period in 2002. Higher base rates in Delaware service territories provided $0.1 million of the increase along with a $0.2 million increase in consumption and connection fees. Consumption increased by $0.2 million in our New Jersey systems. Service fees from our operations and maintenance contracts rose $0.3 million due to an increase in fees under the City of Perth Amboy contract. Operating expenses increased $0.9 million or 7.6%. Operations and maintenance expenses increased $0.9 million or 11.6% over the prior period. There were higher sewer costs of $0.3 million for USA-PA. Costs relating to main breaks resulting from severe winter weather conditions in the first quarter of 2003 contributed to additional O & M expenses of $0.3 million. Increases in audit fees, legal fees and employee benefits pushed up O & M costs by $0.2 million. All other costs of operations increased by $0.1 million. Federal income taxes decreased $0.1 million or 9.9%, reflecting a lower amount of current taxable income. Even though there is a higher level of long-term and short-term debt outstanding compared to last year, lower interest rates on short-term debt and the refinancing of $6.0 million of long-term debt at a lower rate helped to reduce the interest expense by $0.1 million or 6.7%. Net income decreased by 4.1% to $1.2 million and basic and diluted earnings per share decreased to $0.15 from $0.16 per share. Results of Operations - Twelve Months Ended March 31, 2003 Operating revenues for the twelve months ended March 31, 2003 were up $2.0 million to $62.7 million amounting to a 3.2% increase. Higher consumption in Delaware of $1.4 million contributed to additional revenue. Fueling the consumption growth in Delaware was the 10.0% increase in the customer base since March 2002. Rate increases accounted for $0.5 million and increased consumption accounted for $0.9 million. Service fees from our operations and maintenance contracts rose $0.5 million due to an increase in fees earned under the City of Perth Amboy contract. Lower consumption in our New Jersey service territories led to a $0.2 million decrease in operating revenues. The $0.3 million balance of the increase is the result of the acquisition of the Southern Shores Water Company in August 2001. Operating expenses increased $1.6 million or 3.2%. Operations and maintenance expenses increased $1.7 million or 5.4%. There were higher sewer costs of $0.5 million for USA-PA. Costs relating to main breaks resulting from severe winter weather conditions in the first quarter of 2003 contributed to additional O & M expenses of $0.3 million. Increased labor and operating costs associated with the increased consumption in the Delaware operations amounted to $0.5 million. Increases in audit fees and employee benefits pushed up O & M costs by $0.4 million. Other taxes increased by $0.1 million due to higher payroll related taxes. Federal income taxes decreased $0.1 million or 3.3%. Net income increased 5.0% to $7.7 million. Basic and diluted earnings per share increased by 3.2% to $0.96 per share. -9-

Capital Resources The Company's capital program for 2003 is estimated to be $30.5 million and includes $17.9 million for water system additions and improvements for our Delaware systems, $3.0 million for the RENEW Program, which is our program to clean and cement line approximately nine miles of unlined mains in the Middlesex System. There is a total of approximately 143 miles of unlined mains in the 730 mile Middlesex System. Additional expenditures on the upgrade to the CJO Plant are estimated at $2.3 million. The capital program also includes $7.3 million for scheduled upgrades to our existing systems in New Jersey. The scheduled upgrades consist of $0.8 million for mains, $0.9 million for service lines, $0.3 million for meters, $0.3 million for hydrants,$1.2 million for distribution system improvements, $0.1 million for computer systems and $3.7 million for various other items. Liquidity The capital program in Delaware will be financed through a combination of a capital contribution and short-term debt financing from Middlesex, as well as long-term financing through the State Revolving Fund (SRF) in Delaware. Middlesex, Tidewater and Bayview each have secured long-term financing with their respective state agencies for certain capital projects. SRF provides low cost financing for projects that meet certain water quality improvement benchmarks. The proceeds from those loans will be used in 2003 through 2005. (See Note 2 to the Consolidated Financial Statements).Other capital expenditures will be financed through internally generated funds and sale of common stock through the Dividend Reinvestment and Common Stock Purchase Plan (DRP). Capital expenditures of $3.8 million have been incurred in the three months ended March 31, 2003. The Company will also utilize short-term borrowings through $30.0 million of available lines of credit it has with three commercial banks for working capital purposes. At March 31, 2003, there was $18.5 million outstanding against the lines of credit. Outlook While revenues continue to grow in Delaware because of customer growth and rate increases, the lingering winter-like weather in March and April appears to have affected consumption demands in our New Jersey systems. Tidewater is assessing the need to file for a Distribution System Improvement Charge (DSIC) with the Delaware Public Service Commission (PSC). The DSIC is a separate rate mechanism that allows for cost recovery of certain capital improvement costs incurred in between base rate filings. Delaware regulated water utilities are allowed to apply for a DSIC every six months with the maximum increase limited to 5.0% in any six month period and a 7.5% overall limitation. If applied for, the DSIC would be effective for services rendered on or after July 1, 2003. The Company continues to pursue non-regulated opportunities in New Jersey and Delaware. There are several projects that we feel confident will come to fruition. Although the expected income is not material compared to the consolidated group, we believe it puts us in a better position for additional, larger projects. -10-

Forward Looking Information Certain matters discussed in this report on Form 10-Q are "forward-looking statements" intended to qualify for safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. Such statements may address future plans, objectives, expectations and events concerning various matters such as capital expenditures, earnings, litigation, growth potential, rate and other regulatory matters, liquidity, capital resources and accounting matters. Actual results in each case could differ materially from those currently anticipated in such statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Item 3. Quantitative and Qualitative Disclosures of 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 interest rate risk related to existing fixed rate, long-term debt is not material due to the term of the majority of our First Mortgage Bonds, which have maturity dates ranging from 2009 to 2038. Over the next twelve months, approximately $0.6 million of the current portion of nine existing long-term debt instruments will mature. Applying a hypothetical change in the rate of interest charged by 10% on those borrowings would not have a material effect on earnings. -11-

Item 4. Controls and Procedures As required by Rule 13a-15 under the Exchange Act, within the 90 days prior to the filing date of this report, the Company carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer along with the Company's Chief Financial Officer. Based upon that evaluation, the Company's Chief Executive Officer along with the Company's Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective. There have been no significant changes in the Company's internal controls or in other factors, which could significantly affect internal controls subsequent to the date the Company carried out its evaluation. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in Company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Company reports filed under the Exchange Act is accumulated and communicated to management, including the Company's Chief Executive Officer and Chief Financial Officer as appropriate, to allow timely decisions regarding disclosure. PART II. OTHER INFORMATION Item 1. Legal Proceedings None. Item 2. Changes in Securities None. Item 3. Defaults upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: None. (b) Reports on Form 8-K: Filed April 30, 2003 -12-

SIGNATURES I, Dennis G. Sullivan, hereby certify that, to the best of my knowledge, the periodic report being filed herewith containing financial statements fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (16 U.S.C. 78m or 78o(d)) and that information contained in said periodic report fairly presents, in all material respects, the financial condition and results of operations of Middlesex Water Company for the period covered by said periodic report. /s/ Dennis G. Sullivan --------------------------------- Dennis G. Sullivan Chief Executive Officer I, A. Bruce O'Connor, hereby certify that, to the best of my knowledge, the periodic report being filed herewith containing financial statements fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (16 U.S.C. 78m or 78o(d)) and that information contained in said periodic report fairly presents, in all material respects, the financial condition and results of operations of Middlesex Water Company for the period covered by said periodic report. /s/ A. Bruce O'Connor --------------------------------- A. Bruce O'Connor Chief Financial Officer Date: May 12, 2003 -13-

CERTIFICATIONS I, Dennis G. Sullivan, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Middlesex Water Company; 2. Based on my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have; a) designed such disclosure controls and procedures 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 quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluations as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 12, 2003 /s/ Dennis G. Sullivan --------------------------------- Dennis G. Sullivan Chief Executive Officer -14-

CERTIFICATIONS I, A. Bruce O'Connor, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Middlesex Water Company; 2. Based on my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have; a. designed such disclosure controls and procedures 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 quarterly report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c. presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluations as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 12, 2003 /s/ A. Bruce O'Connor --------------------------------- A. Bruce O'Connor Chief Financial Officer -15-