Decision Reached on Artesian's Request for Rate Increase

March 20, 2003

The Delaware Public Service Commission (PSC) approved an increase for Artesian Water Company in response to the request for a rate increase filed by Artesian on April 2, 2002.

Since its last filing for rate relief, Artesian has invested about $27 million in infrastructure improvements which include

• Addition of new sources of supply and installation of enhanced water treatment facilities, including those necessary to meet new government mandated water quality standards;

• Acceleration in completion of steps already underway to assure the security of Artesian's production wells and sources of supply;

• Relocation of water mains due to state highway expansion and relocation projects; and

• Replacement and rehabilitation of aging transmission and distribution infrastructure.

Also included are additional expenses associated with an increase in the number of employees to meet increasing regulatory requirements and to assure adequate water quality.

Artesian placed a temporary rate increase of 7.71 percent into effect as permitted by law on June 1, 2002. After eight months without resolution, Artesian placed an additional 3.69 percent temporary rate increase into effect on December 3, 2002, as permitted by law. As such, a total of 11.4 percent in temporary rate increases have been in effect since December 3, 2002. Pending review of the final order by the PSC, determination will be reached as to the impact of the new rate on customer bills. If customer overpayment has occurred, such overpayments with interest will be applied to current and future customer bills.

"We continue our efforts to minimize costs and keep our customers' rates as low as possible. In order to ensure secure sources of quality supply and the high level of service that Artesian's customers expect, ongoing improvements to infrastructure are necessary," said Dian C. Taylor, Artesian president and CEO.

Source: Artesian Water Company