Artesian Resources Corporation (ARTNA): Business Model Canvas [Dec-2025 Updated]

You're looking to cut through the noise of regulated utilities, and honestly, Artesian Resources Corporation (ARTNA)'s business model is a fascinating case study right now. As a seasoned analyst, I can tell you that while their regulated monopoly status on the Delmarva Peninsula provides stability, the real story for late 2025 is the tension between massive investment and compliance costs; they've already poured $40.5 million into capital expenditures year-to-date while generating $84.9 million in revenue through September 30th. We need to see how they manage key partnerships, like the DEPSC for rate approval, and address customer concerns stemming from issues like PFAS treatment. Dive into the nine building blocks below to see the precise mechanics of how Artesian Resources Corporation (ARTNA) generates revenue from water sales and Service Line Protection Plans while funding its extensive network renewal.

Artesian Resources Corporation (ARTNA) - Canvas Business Model: Key Partnerships

You're looking at the essential relationships Artesian Resources Corporation relies on to keep the water flowing and the business running smoothly across the Delmarva Peninsula. These aren't just vendors; they are co-regulators and critical suppliers that directly impact your near-term operational costs and long-term capital planning. Honestly, the regulatory environment in Delaware is the bedrock of their revenue stability, but the recent PFAS settlement shows how quickly external legal matters can become a direct customer-facing financial event.

The relationship with the Delaware Public Service Commission (DEPSC) is paramount. This body dictates how Artesian Resources Corporation can adjust rates to cover rising operational expenses and capital investments. For instance, on April 4, 2025, Artesian Water Company, Inc. filed an application with the DEPSC seeking a requested incremental revenue increase of 12.41%, which translates to approximately $10.8 million on an annualized basis. To bridge the gap while waiting for that comprehensive review, the company was permitted to place temporary rates into effect. A temporary rate increase of 1.22% of gross water sales began on June 3, 2025, which is expected to provide about $1.2 million in additional annual revenue until the permanent rates are finalized.

The need for this rate relief is clearly tied to necessary capital deployment and rising input costs, such as power. Artesian Resources Corporation entered into a new four-year electric supply contract with Constellation NewEnergy, Inc., starting in May 2025 and running through May 2029. This new arrangement carries an electric supply rate approximately 25% higher than the previous one. Here's the quick math on that impact: the total estimated annual increase in electric supply expense beginning in May 2025 is approximately $0.5 million.

Another major, albeit non-operational, partnership involves the legal settlement with 3M Company regarding PFAS contamination costs. Artesian Water Company received approximately $7.2 million to date from the settlement. What this estimate hides is the immediate action required: the DEPSC approved returning these proceeds to customers. Active Delaware water customers as of December 1, 2025, are set to receive a direct credit of about $73 on their December 2025 bills. This shows how quickly a legal resolution can translate into a direct financial transaction with the customer base.

The company's commitment to system reliability is evidenced by its spending with contractors for large-scale infrastructure projects and maintenance. For the first nine months of 2025, Artesian Resources Corporation invested a total of $40.5 million in water and wastewater infrastructure projects. This spending is focused on tangible assets, including:

• Rehabilitation of aging infrastructure systems.
• Installation of new water mains.
• Construction of a new wastewater treatment plant.
• Upgrading existing pumping and treatment stations, specifically including PFAS treatment upgrades.

To give you a clearer picture of the scale, the investment for the first half of 2025 (H1 2025) alone was $26.3 million.

Beyond these direct financial partners, Artesian Resources Corporation maintains crucial governmental relationships for its operating footprint across Delaware, Maryland, and Pennsylvania. These partnerships are essential for service continuity and expansion:

• Delaware Public Service Commission (DEPSC): For rate approval and ongoing regulatory oversight.
• State and county governmental entities: For securing necessary service territory permits across their operating areas.
• Town of Middletown, Delaware: Under a 20-year contract expiring in July 2039, Artesian Utility operates wastewater treatment facilities with a combined capacity up to approximately 3.8 mgd.

Here is a snapshot of the financial impact tied to the key regulatory and supplier relationships as of late 2025:

The ongoing capital program, which relies heavily on external contractors, shows a significant commitment to asset health. The investment through the first nine months of 2025 reached $40.5 million. Finance: draft 13-week cash view by Friday.

Artesian Resources Corporation (ARTNA) - Canvas Business Model: Key Activities

You're looking at the core engine of Artesian Resources Corporation, the day-to-day work that keeps the water flowing and the books balanced. This isn't just about turning on a tap; it's about the massive physical and regulatory footprint they manage across the Delmarva Peninsula.

A primary activity is the physical operation and maintenance of the system. Artesian Resources Corporation manages approximately 1,491 miles of transmission and distribution water mains, which range in diameter from two inches to twenty-four inches. Also, they are responsible for the utility plant, which includes 36 storage tanks in Delaware, providing total system storage of about 45.0 million gallons as of early 2025. This infrastructure supports water service to over a third of Delaware residents.

Next up is the critical function of water treatment, quality testing, and meeting regulatory demands. Artesian Water Company, the principal subsidiary, is actively upgrading existing pumping and treatment stations, specifically including PFAS treatment upgrades to stay ahead of evolving standards. They've taken a proactive approach, installing this specialized PFAS treatment ahead of final state and federal regulations. Still, this work contributes to increased operating costs, as noted by the mention of increased costs to treat for PFAS in early 2025.

Revenue recovery through regulatory negotiation is a constant, key activity. Artesian Water Company, Inc. filed a significant rate application with the Delaware Public Service Commission (DEPSC) on April 4, 2025. Here's the quick math on that filing:

• Requested total incremental increase in annualized revenue: 12.41%, or approximately $10.8 million.
• The Distribution System Improvement Charge (DSIC) currently in place is 1.66%.
• If fully approved, the net incremental increase to existing billed rates would be 10.75%, as the DSIC resets to 0.0% when new base rates take effect.
• Artesian Water also petitioned the DEPSC to implement a temporary incremental rate increase of 1.22%, effective June 3, 2025, which provides about $1.2 million in additional annualized revenue until permanent rates are set.

This capital expenditure (capex) program is directly tied to the rate case justification. Artesian Resources Corporation is pouring capital into system resilience and capacity. You can see the acceleration in investment through the first nine months of 2025:

These investments fund infrastructure renewals, new mains, and construction of a new wastewater treatment plant. Finally, the back-office work involves billing, customer service, and managing ancillary products. For instance, non-utility operating revenue saw an increase primarily due to the Service Line Protection Plan (SLP Plan) revenue, which benefited from a rate increase that went into effect on December 1, 2024. To be fair, the average residential customer using 4,000 gallons of water per month was billed $52.94 before the April 2025 rate filing. That's less than $2 per day for their water needs. Finance: draft 13-week cash view by Friday.

Artesian Resources Corporation (ARTNA) - Canvas Business Model: Key Resources

Regulated monopoly status in core service areas (Delmarva Peninsula)

Artesian Water Company, the principal subsidiary of Artesian Resources Corporation, operates as the oldest and largest regulated water utility on the Delmarva Peninsula.

Extensive portfolio of water rights and sources (e.g., aquifers)

Artesian Resources Corporation focuses on identifying new and dependable sources of water supply and providing responsible wastewater management to assist with the recharge of aquifers.

Utility plant and infrastructure network (wells, treatment, distribution)

The infrastructure supports the delivery of water to a growing population base.

Financial capital for CapEx, with $40.5 million invested YTD 2025

Artesian Resources Corporation invested $40.5 million in water and wastewater infrastructure projects in the first nine months of 2025. This investment level was materially higher than the $18.4 million invested through the first half of 2024.

Specialized technical and engineering staff for utility operations

The total workforce supports the design, construction, maintenance, and operation of the utility systems.

• Total Employees (as of December 31, 2024): 249
• Full-Time Employees (as of December 31, 2024): 245

Artesian Resources Corporation (ARTNA) - Canvas Business Model: Value Propositions

High-quality, reliable, and safe drinking water service

Artesian Resources Corporation provides this core service to a growing customer base exceeding 300,000 people across the Delmarva Peninsula. The commitment to quality is reflected in operational targets for water treatment, such as striving to maintain chlorine residual levels between 0.5 ppm and 3 ppm, which is below the U.S. Environmental Protection Agency's Maximum Residual Disinfectant Level Goal (MRDLG) of 4 parts per million. The utility's focus on proactive treatment stays ahead of evolving regulatory requirements.

Environmentally responsible wastewater treatment and recycling

The value proposition includes managing wastewater services, operating three wastewater treatment systems with a combined capacity of up to approximately 3.8 mgd. Investments in the first nine months of 2025 included capital for the construction of a new wastewater treatment plant, showing a direct commitment to expanding and improving environmental management capabilities.

Stability and predictability as a regulated utility provider

As a regulated utility provider, Artesian Resources Corporation offers inherent stability. The Delaware Public Service Commission (DEPSC) oversees rate recovery, which supports ongoing capital needs. For instance, a temporary rate increase of 1.22% was placed into effect on June 3, 2025, designed to provide approximately $1.2 million in additional annual revenue. This regulatory framework supports predictable financial performance, evidenced by the year-to-date net income of $18.7 million for the nine months ended September 30, 2025, representing a 12.9% increase over the same period in 2024. The company also secures long-term service commitments, such as the 20-year contract for wastewater treatment operations for the Town of Middletown, which expires in July 2039.

Service Line Protection Plans (SLPP) for customer peace of mind

Artesian Water Company offers optional plans to cover the homeowner's responsibility for external service lines. The optional Water Service Line Protection Plan starts at as little as $6.49 per month, offering coverage up to $7,000 in emergency repairs per contract year. The Sewer Service Line Protection Plan costs $11.99 per month and covers up to $8,500 per contract year for clogs or breaks. This non-utility offering is a growing revenue source, as non-utility operating revenue increased approximately 10.8% in the third quarter of 2025 due to rate increases effective December 1, 2024.

Long-term commitment to infrastructure renewal and compliance

Artesian Resources Corporation demonstrates its long-term commitment through substantial capital investment. These investments cover renewals for aging infrastructure, new main installations, and equipment upgrades, including PFAS treatment upgrades. The company invested $40.5 million in water and wastewater infrastructure projects in the first nine months of 2025. This figure follows a significant investment of $45.9 million made throughout the full fiscal year 2024.

Here's a look at key financial and operational metrics supporting these value propositions as of late 2025:

The company's Q3 2025 diluted net income per share was $0.68. Also, utility operating expenses increased by $2.0 million, or 5.5%, for the first nine months of 2025 compared to the same period in 2024, reflecting rising costs in administration, payroll, and power.

• Water Sales Revenue increased 3.1% in Q3 2025 due to the temporary rate increase.
• Other utility operating revenue increased approximately 12.6% in Q3 2025, driven by wastewater revenue.
• Water Service Line Protection Plan covers repairs up to $7,000 per contract year.
• Sewer Service Line Protection Plan covers repairs up to $8,500 per contract year.

Artesian Resources Corporation (ARTNA) - Canvas Business Model: Customer Relationships

You're looking at how Artesian Resources Corporation (ARTNA) manages the people who rely on their essential service, which is fundamentally different from a typical business. Because Artesian Water Company, Inc. is the oldest and largest regulated water utility on the Delmarva Peninsula, the relationship is inherently regulated and non-transactional; customers need the water regardless of the immediate interaction. Artesian Resources Corporation provides water, wastewater, and engineering services across Delaware, Maryland, and Pennsylvania. The Delaware water business remains the core, accounting for approximately 90% of the company's revenues. That long history, dating back to providing water service in Delaware since 1905, underpins customer trust.

Direct interaction happens through established service channels. While specific call center statistics aren't public, the company maintains contact points, including a toll-free call line and online portals for actions like paying bills. Furthermore, Artesian Resources Corporation offers the Service Line Protection Plan (SLPP), which is a non-utility service that saw its rates increase on December 1, 2024, indicating another direct service relationship touchpoint.

Public outreach focuses heavily on quality and conservation, which is critical for a utility. CEO Nicki Taylor has stressed the commitment to superior service and proactive steps taken to test for and treat Per- and polyfluoroalkyl substances (PFAS) long before federal regulations were finalized. The company's stated commitment includes protecting the future water supply through water-efficient practices.

Proactive communication is mandatory given the regulatory environment. For instance, on April 4, 2025, Artesian Water Company, Inc. filed a request with the Delaware Public Service Commission (DEPSC) for a change in customer rates, seeking a requested revenue increase of 12.41%, or approximately $10.8 million annualized. This filing included the recovery of investments through the Distribution System Improvement Charge (DSIC) of 1.66%, which was set to reset to 0.0% upon new base rate implementation. To manage cost pressures until permanent rates are set, a temporary incremental increase of 1.22% (about $1.2 million annualized) became effective on June 3, 2025. The company invested $40.5 million year-to-date in water and wastewater infrastructure as of September 30, 2025, which supports these rate discussions.

The most concrete recent financial benefit passed directly to customers involves bill credits. Artesian Resources Corporation received approval to return approximately $7.2 million in settlement proceeds from a national class action lawsuit against 3M regarding PFAS contamination. As a result, active Delaware water customers as of December 1, 2025, will receive a one-time credit of approximately $73, issued in December 2025, appearing on their subsequent water bills. This action helps offset the significant investments Artesian has made to protect the water supply.

Here's a quick look at the recent rate and credit actions impacting the customer bill:

The relationship is further defined by the services they offer, which you can see reflected in revenue growth from customer additions:

• Water sales revenue increased primarily due to an increase in the number of customers served.
• Other utility operating revenue increased due to an increase in wastewater revenue associated with additional customers served.
• Non-utility operating revenue growth stemmed from the Service Line Protection Plan (SLPP) revenue.

Artesian Resources Corporation (ARTNA) - Canvas Business Model: Channels

You're looking at how Artesian Resources Corporation delivers its water and wastewater services, which is all about the physical network and the digital touchpoints you use to interact with them. It's a utility, so the physical side is massive.

Physical utility network (pipes, mains, treatment plants) to end-users

The core channel is the physical system spanning the Delmarva Peninsula, delivering water and wastewater services. Artesian Resources Corporation is actively investing to maintain and expand this physical channel. For the nine months ended September 30, 2025, the company invested $40.5 million year-to-date in water and wastewater infrastructure. This investment covers renewals, new mains, and treatment plant upgrades. For context, in the first three months of 2025 alone, $10.4 million was invested in these projects. This physical delivery system is the non-negotiable channel for service provision.

The scope of this physical channel involves:

• Water treatment facilities and storage tanks.
• Wastewater treatment plants, including construction of a new one.
• Installation of new mains and renewal of aging infrastructure.
• Upgrading existing pumping and treatment stations.

Direct billing and customer service centers

Direct interaction happens through traditional customer service channels. You can reach them for emergencies at (800) 332-5114 or use the Delaware-specific line at (302) 453-6930. Billing is direct, tied to usage and specific charges. Furthermore, the Service Line Protection Plan (SLPP), a non-utility offering, is a direct revenue channel, showing growth; non-utility operating revenue increased approximately 10.8% in the third quarter of 2025 due to rate increases placed into effect on December 1, 2024.

Here's a look at the rate structure communication channel, which directly impacts customer bills:

Artesian Water Company website and online payment portals

The digital channel is essential for convenience. The Artesian Water Company website provides self-service options. You definitely see links for key transactional activities.

The website offers direct access to:

• The 'Pay My Bill' portal.
• Initiating 'Start, Stop or Move Service.'
• Reporting 'Emergencies & Shut-Off Valves.'

Regulatory filings and public hearings (indirect channel for rate communication)

Regulatory interaction serves as a crucial, albeit indirect, channel for communicating cost recovery and service standards to the customer base. Artesian Water Company, Inc. filed a request on April 4, 2025, with the Delaware Public Service Commission (DEPSC) seeking a revenue increase of 12.41%, or about $10.8 million on an annualized basis. This process dictates the final rates customers pay. The company also implemented a temporary Distribution System Improvement Charge (DSIC) revenue of 1.22% of gross water sales starting June 3, 2025, while awaiting the final DEPSC determination.

Meter reading equipment and smart meter upgrades

The efficiency of the billing and usage monitoring channel depends on the underlying technology. Investments are being made to modernize this area. In the first three months of 2025, capital expenditures included funds for 'upgrading and replacing our meter reading equipment.' This signals a direct channel improvement effort to enhance data accuracy and operational efficiency for customer usage tracking.

Finance: draft 13-week cash view by Friday.

Artesian Resources Corporation (ARTNA) - Canvas Business Model: Customer Segments

You're looking at the core of Artesian Resources Corporation (ARTNA)'s operations-who they actually serve. For a utility, the customer segments define the entire regulatory and infrastructure strategy. Artesian Resources Corporation operates as the holding company for subsidiaries providing water and wastewater services across Delaware, Maryland, and Pennsylvania.

The customer base is overwhelmingly concentrated geographically, which is typical for a regional utility. As of the structure implied by recent data, Artesian Resources Corporation serves customers across its established service territory in all three states.

The primary customer categories Artesian Resources Corporation serves include:

• Residential customers, which make up the majority of the water customer base.
• Commercial and industrial businesses.
• Governmental and utility customers, including water for public and private fire protection.

The geographic concentration is a key feature of this segment. Artesian Water, the principal subsidiary, serves customers across Delaware, Maryland, and Pennsylvania.

Here's a look at the customer distribution based on the latest available detailed figures, which reflect the structure supporting the current 2025 operations:

The concentration in Delaware is significant. Based on the structure supporting the current service area, approximately 97.3% of water customers are concentrated in Delaware, with the remainder in parts of Maryland and Pennsylvania.

Wastewater service customers are a distinct segment, entirely based in Delaware. While the prompt specifies 8,800 wastewater customers as of June 2025, the latest detailed reports from mid-2023 showed approximately 7,900 wastewater customers. Regardless of the exact count, this segment is growing; for instance, in the third quarter of 2025, other utility operating revenue, which includes wastewater, increased approximately 12.6% due to additional customers served.

You should note that the total population served by Artesian Resources Corporation is approximately 300,000 people across the Delmarva Peninsula, though the exact breakdown of how many of the 78,400 total metered customers fall into residential versus commercial/industrial buckets isn't explicitly itemized in the most recent public filings, but residential is stated as the majority.

Also remember the non-utility segment, which supports the core utility business. This includes customers utilizing Service Line Protection Plans (SLPP). This non-utility revenue stream saw an increase of approximately 10.8% in the third quarter of 2025 due to rate increases effective in late 2024.

Finance: draft 13-week cash view by Friday.

Artesian Resources Corporation (ARTNA) - Canvas Business Model: Cost Structure

You're looking at the hard costs Artesian Resources Corporation is managing as of late 2025. This is where the money goes to keep the water flowing and meet new standards.

Infrastructure and Depreciation

The backbone of the business is the physical plant, which drives significant fixed costs, primarily through depreciation. Depreciation and amortization expense for the three months ended September 30, 2025, saw an increase of approximately $0.1 million, representing a 0.9% rise. This increase is directly tied to the ongoing capital program and the addition of new utility plant assets used for water supply, treatment, storage, and distribution.

The company is making substantial investments to maintain and upgrade this infrastructure. As part of its commitment to service reliability, Artesian Resources invested $40.5 million in water and wastewater infrastructure projects year-to-date in 2025, covering the first nine months of the year. For the first six months of 2025 alone, the investment totaled $26.3 million.

Utility Operating Expenses

Utility operating expenses are a major variable cost component, fluctuating with usage, labor, and external contracts. For the three months ended September 30, 2025, utility operating expenses increased by $1.3 million, which is a 10.8% jump compared to the same period in 2024. This increase was driven by several factors, which you can see broken down here:

Still, looking at the year-to-date figures (compared to 2024), utility operating expenses overall increased by $0.7 million, or 2.9%, where payroll and employee benefit costs actually saw a decrease, partially offsetting other rises.

Purchased Power Costs

Energy is a critical input cost that has seen a notable shift. Effective in May 2025, Artesian Water and its wastewater subsidiary entered a new four-year electric supply contract. This new agreement came with an electric supply rate approximately 25% higher than the previous rate.

The financial impact of this change is clear:

• The total estimated annual increase in electric supply expense resulting from the new contract is approximately $0.5 million.
• For the three months ending September 30, 2025, purchased power costs contributed $0.3 million to the overall utility operating expense increase.

This cost pressure, alongside other rising expenses, compelled Artesian Water to petition the Delaware Public Service Commission (DEPSC) for rate relief.

Regulatory Compliance Costs

Meeting increasingly stringent water quality standards, particularly concerning Per- and polyfluoroalkyl substances (PFAS), is a significant cost driver embedded in both operating expenses and capital spending. Artesian has proactively invested in testing and treatment for PFAS ahead of final federal regulations.

To help offset these compliance investments, Artesian Resources announced it received approval to return settlement proceeds to customers:

• Artesian has received approximately $7.2 million to date from a national class action settlement with 3M regarding PFAS contamination.
• Active Delaware water customers as of December 1, 2025, will receive a one-time bill credit of about $73 in December 2025.
• Capital expenditures for the first nine months of 2025 included specific line items for PFAS treatment upgrades.

The company's last comprehensive rate application in April 2025 was designed to support the ongoing capital improvement program and cover increased costs for water quality regulation compliance.

Finance: draft 13-week cash view by Friday.

Artesian Resources Corporation (ARTNA) - Canvas Business Model: Revenue Streams

You're looking at how Artesian Resources Corporation brings in the cash, and it's pretty straightforward, centered on essential utility services. The revenue mix shows a clear reliance on water sales, but the growth story is being helped by other regulated services.

Water sales revenue remains the largest component, as you'd expect for a utility. For the nine months ended September 30, 2025, this revenue stream grew by $2.2 million, which is a 3.3% increase compared to the prior year period. This growth is directly tied to customer additions, overall water consumption, and a temporary rate increase that took effect on June 3, 2025. Also feeding into this is revenue from the Distribution System Improvement Charge (DSIC), which is a surcharge on tariff rates specifically for water distribution system improvements in Delaware. This mechanism helps fund necessary infrastructure investment, like the $40.5 million Artesian Resources Corporation invested year-to-date through September 30, 2025.

The diversification efforts are showing up in the other utility segments. Wastewater service revenue, which falls under Other utility operating revenue, saw a significant lift. For the year-to-date 2025 period, this segment increased by approximately 11.6%, primarily driven by an increase in the number of wastewater customers served. That's solid, dependable growth.

Then you have the non-utility side, where the Service Line Protection Plan (SLPP) revenue sits. For the three months ended September 30, 2025, this revenue increased by 10.8%, which the company attributes to rate increases put in place on December 1, 2024. You asked for the YTD 2025 number to be 10.8%, and the Q3 data supports the trend, showing a $0.2 million increase in non-utility operating revenue for the quarter.

Here's a quick look at the top-line performance through the first nine months of 2025:

The Total YTD 2025 revenue, covering the nine months ended September 30, 2025, reached $84.9 million. This represents an overall increase of $3.8 million, or 4.7%, compared to the same period in 2024. It's a clear picture of regulated, rate-supported growth.

You can see the key drivers contributing to that total revenue:

• Water sales revenue is the base, up 3.3% YTD 2025.
• Wastewater revenue is growing faster, up 11.6% YTD 2025.
• SLPP revenue is also showing double-digit growth momentum.
• Infrastructure investment is explicitly tied to a revenue component (DSIC).

Finance: draft 13-week cash view by Friday.