Middlesex Water Company

Middlesex Water Company
1500 Ronson Road
Iselin, New Jersey 08830-3020
tel.732-634-1500
fax.732-750-5581
www.middlesexwater.com
NASDAQ Stock Market Symbol: MSEX

April 16, 200217, 2003

Dear Stockholder:

I am pleased to invite you to attend Middlesex Water Company's
Annual Meeting of ShareholdersStockholders that will take place on Wednesday, May 22, 2002,28, 2003,
at 11:00 a.m., at the office of the Company, 1500 Ronson Road, Iselin, New
Jersey.

YOUR VOTE IS IMPORTANT TO US. Whether or not you plan to attend the
annual meeting, I urge you to vote. Please specify your choice by marking the
appropriate boxes on the enclosed proxy card and sign, date and return your
proxy in the enclosed postpaid return envelope as promptly as possible. If you
date, sign and return your proxy card without indicating your choices, the
persons designated as proxies will vote your shares in accordance with the
recommendations of the Directors and management.

The primary business of the meeting will be election of directors,
approval of the selection of Deloitte & Touche LLP as independent auditors for
2002, and
approval of an amendment to the Restated Certificate of Incorporation to
increase the number of authorized shares of common stock,2003, and transaction of such other business as may properly come before the
meeting.

During the meeting, we will report to you on the Company's financial
status, operations and other activities during 2001,2002, together with our goals for
2002.2003. We welcome this opportunity to meet with our stockholders and look forward
to your comments and questions.

I look forward to seeing you on May 22nd.28th.

Sincerely,
/s/J. Richard Tompkins
----------------------

J. Richard Tompkins
Chairman of the Board
Quality Water Service Since 1897

TABLE OF CONTENTS

Page
----

SOLICITATION AND REVOCATION OF PROXIES . . . . . . . . . . . . . . . . . . . . . . 1

SHARES ENTITLED TO VOTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

VOTE REQUIRED AND METHOD OF COUNTING VOTES . . . . . . . . . . . . . . . . . . . 1

GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

PROPOSAL 1 - ELECTION OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . 2

NOMINEES FOR ELECTION AS DIRECTOR WITH TERM EXPIRING IN 2005 - CLASS III . . . . 3

DIRECTORS WHOSE TERMS CONTINUE BEYOND THE 2002 ANNUAL MEETING . . . . . . 4

SECURITY OWNERSHIP OF DIRECTORS, MANAGEMENT AND CERTAIN
BENEFICIAL OWNERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Summary Compensation Table . . . . . . . . . . . . . . . . . . . . . . . . . 6

Compensation of Directors . . . . . . . . . . . . . . . . . . . . . . . . .. 7

Compensation Pursuant to Pension Plans . . . . . . . . . . . . . . . . . . . 7

Compensation Committee Interlocks and Insider Participation . . . . . . . . . 8

EXECUTIVE DEVELOPMENT AND COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

AUDIT COMMITTEE REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

STOCK PERFORMANCE GRAPH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

PROPOSAL 2 - APPOINTMENT OF INDEPENDENT AUDITORS . . . . . . . . . . . . . . . . 13

ACCOUNTING FIRM FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

PROPOSAL 3 - AMENDMENT TO THE RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE THE AUTHORIZED COMMON
STOCK FROM 10,000,000 SHARES TO 20,000,000 SHARES . 14

DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS . . . . . . . . . . . . . . . . . . . 14

OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

MINUTES OF 2001 MEETING OF STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . 15

APPENDIX - PROPOSED AMENDMENT OF ARTICLE 7A OF THE RESTATED
CERTIFICATE OF INCORPORATION . . . . . . . . . . . . . . . . . . . . . . . A-1
TABLE OF CONTENTS

Page
----
SOLICITATION AND REVOCATION OF PROXIES 2

SHARES ENTITLED TO VOTE 2

VOTE REQUIRED AND METHOD OF COUNTING VOTES 2

GENERAL INFORMATION 2

PROPOSAL 1 - ELECTION OF DIRECTORS 4

NOMINEES FOR ELECTION AS DIRECTOR WITH TERM EXPIRING IN 2006- CLASS I 5

NOMINEES FOR ELECTION AS DIRECTOR WITH TERM EXPIRING IN 2004- CLASS II 6

DIRECTORS WHOSE TERMS CONTINUE BEYOND THE 2003 ANNUAL MEETING 7

SECURITY OWNERSHIP OF DIRECTORS, MANAGEMENT AND CERTAIN 8
BENEFICIAL OWNERS

EXECUTIVE COMPENSATION 9
Summary Compensation Table 9
Compensation of Directors 9
Compensation Pursuant to Pension Plans 10
Compensation Committee Interlocks and Insider Participation 11

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION 12

AUDIT COMMITTEE REPORT 13

STOCK PERFORMANCE GRAPH 15

PROPOSAL 2 - APPOINTMENT OF INDEPENDENT AUDITORS 16

ACCOUNTING FIRM FEES 16

DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS 16

OTHER MATTERS 17

MINUTES OF 2002 MEETING OF STOCKHOLDERS 17

Middlesex Water Company[LOGO] MIDDLESEX WATER COMPANY

1500 Ronson Road
Iselin, New Jersey 08830-302008830-0452
732-634-1500
www.middlesexwater.com

___________-----------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 22, 200228, 2003
AND
PROXY STATEMENT

____________------------

To the Stockholders of Middlesex Water Company

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
MIDDLESEX WATER COMPANY will be held at the office of the Company, 1500 Ronson
Road, Iselin, New Jersey, on Wednesday, May 22, 2002 ,28, 2003, at 11:00 a.m., for the
following purposes:

1. To elect three members of Class IIII of the Board of Directors to hold
office until the Annual Meeting of Stockholders in the year 2005,2006,
and to elect two members of Class II of the Board of Directors to
hold office until the Annual Meeting of Stockholders in the year
2004, and in each case until their respective successors are elected
and qualify.

2. To consider and act upon the approval of the appointment of Deloitte
& Touche LLP as independent auditors for the year 2002.2003.

3. To amend the Restated Certificate of Incorporation to increase the
authorized Common Stock from 10,000,000 shares to 20,000,000 shares.

4. To transact such other business as may properly come before the
meeting and any adjournment thereof.

Only holders of record of Common Stock at the close of business on March
29, 2002,31, 2003, will be entitled to notice of and to vote at the meeting or any
adjournment thereof.

The Company's Annual Report for the year ended December 31, 2001,2002, has
already been mailed to stockholders.

If you are unable to be present at the meeting but desire to have your
shares voted, please execute the enclosed proxy and return it in the
accompanying envelope, to which no postage need be affixed if mailed in the
United States.

By Order of the Board of Directors,

/s/MARION F. REYNOLDS
---------------------
MARION F. REYNOLDS
Secretary

April 16, 200217, 2003

- --------------------------------------------------------------------------------
IMPORTANT
To assure your representation at the meeting, please
mail the enclosed proxy promptly.
- --------------------------------------------------------------------------------

Middlesex Water Company[LOGO] MIDDLESEX WATER COMPANY

1500 Ronson Road
Iselin, New Jersey 08830-302008830-0452
732-634-1500
www.middlesexwater.com

____________------------

PROXY STATEMENT

____________------------

Notice of the Annual Meeting of Stockholders of Middlesex Water Company to
be held on May 22, 2002,28, 2003, is attached. You are cordially invited to attend the
meeting. If you are unable to attend, you are requested to sign and complete the
enclosed proxy and return it in the accompanying envelope.

SOLICITATION AND REVOCATION OF PROXIES

The enclosed proxy is solicited by and on behalf of the Board of Directors
of the Company. The cost of soliciting proxies will be borne by the Company. In
addition to solicitation by mail, the Company may make arrangements with
brokerage houses and other custodians, nominees, and fiduciaries to send proxies
and proxy material to their principals and will reimburse them for their
expenses in so doing. The solicitations will be initially by mail, and it may
later be decided to make further solicitations by mail, telephone, telegram,
fax, e-mail or in person by Directors, Officers and employees of the Company.
This proxy statement and the accompanying proxy are first being sent to
stockholders on or about April 16, 2002.17, 2003.

The giving of a proxy does not preclude the right to vote in person should
the stockholder giving the proxy so desire, and a proxy may be revoked by giving
notice to the Secretary of the Company in writing at any time prior to the
commencement of the meeting or in open meeting prior to the taking of the vote
to which such revocation relates.

SHARES ENTITLED TO VOTE

As of March 29, 2002,31, 2003, there were outstanding 7,659,2247,810,409 shares of Common
Stock, which is the only class of capital stock entitled to vote at the Annual
Meeting. Each holder of Common Stock is entitled to one vote for each share
held. As stated in the Notice of Meeting, holders of record of Common Stock at
the close of business on March 29, 2002,31, 2003, will be entitled to vote at the meeting
or any adjournment thereof.

VOTE REQUIRED AND METHOD OF COUNTING VOTES

The affirmative vote of a plurality of the votes cast at the meeting is
required for the election of Directors. For the ratification of the appointment
of Deloitte & Touche LLP, the affirmative vote of the holders of a majority of
the shares represented, in person or by proxy, and entitled to vote on the item
will be required. The amendment of Article 7A of the Certificate of Amendment to
the Restated Certificate of Incorporation will require the affirmative vote of
the holders of two-thirds of the shares of the Company's Common Stock voting at
the 2002 Annual Meeting. Abstentions and broker non-votes will not be included in
determining the number of votes cast concerning any matter.

GENERAL INFORMATION

Management of the Company is under the general direction of the Board of
Directors who are elected by the stockholders. The Board of Directors holds
regular monthly meetings and meets on other 1
occasions when required in special
circumstances. The Board of Directors held twelve meetings and the Board

Committees held eleveneighteen meetings during the year 2001.2002. Each incumbent Director
attended 95% or more of the total number of meetings of the Board and Committees
on which each served.

The Board of Directors has an Audit Committee, consisting of Annette
Catino (appointed in January 2003), John C. Cutting, John R. Middleton, M.D. and
John P. Mulkerin, which reviews with the independent auditors the scope of the
audit,annual audit; receives and reviews the auditors' annual report,report; reviews the
Audit Committee Charter annuallyindependence of the independent auditors, services provided by them and their
fees; recommends to the Board of Directors the inclusion of the audited
financial statements in the Company's Annual Report to the Securities and
Exchange Commission on Form 10-K; and makes a recommendation to the Board for
the appointment of an independent accounting firm for the following calendar
year. The Board of Directors has adopted a written Charter for the Audit
Committee. The Committee held threefour meetings during the year 2001.2002.

The Board of Directors has an Executive Development and Compensationa Capital Improvement Committee, consisting of
John C. Cutting, Stephen H. Mundy and J. Richard Tompkins, which reviews the
Capital Budget and monitors the capital projects and expenditures during the
year. The Committee reports its findings to the Board of Directors. The
Committee was appointed in January 2003.

The Board of Directors has a Compensation Committee (formerly the
Executive Development and Compensation Committee), consisting of John R.
Middleton, M.D., Stephen H. Mundy and Jeffries Shein, which reviews and makes
recommendations to the Board of Directors as to the salaries and benefits of the
Executive Officers of the Company and administers the 1989 Restricted Stock Plan. The
Committee held fourfive meetings during the year 2001.2002.

The Board of Directors has a Corporate Governance Committee, consisting of
John R. Middleton, M.D., John P. Mulkerin and Walter G. Reinhard, which reviews
and makes recommendations relating to the governance of the Company, the
performance and composition of the Board and Board committees, succession
planning and significant organization changes. The Board of Directors has
adopted a written Charter for the Corporate Governance Committee. The Committee
held two meetings during the year 2002.

The Board of Directors has a Nominating Committee, consisting of John P.
Mulkerin, Stephen H. Mundy and Jeffries Shein, which makes recommendations to
the Board of Directors with respect to nominations for the Board. The Committee
held two meetings during the year 2002. The Nominating Committee will consider
stockholders' recommendations for nominees for election to the Board of
Directors. Recommendations should be sent to Middlesex Water Company, Office of
the Secretary, 1500 Ronson Road, P.O. Box 1500, Iselin, New Jersey 08830-0452.
Nominations must be accompanied by the written consent of any such person to
serve if nominated and elected and by biographical material to permit evaluation
of the individual recommended. The Secretary of the Company should receive any
nominations for Director by the close of business on December 17, 2003, in order
to be considered for inclusion in the Company's proxy statement and form of
proxy relating to the 2004 Annual Meeting of Stockholders.

The Board of Directors has a Pension Committee, consisting of John C.
Cutting, John P. Mulkerin and Jeffries Shein, which reviews investment policies
and determines recommended investment objectives for the Company's Pension Plan
and serves as trustee for the Company's Voluntary Employees' Beneficiary
Association Trust. The Committee meets quarterly with the Company's Investment
Managers. The Committee held four meetings during the year 2001.2002.

The Board of Directors appoints an ad hoc NominatingPricing Committee from time to
time as needed. Such aIn January 2002 the Committee met to approve the sale of Series
DD First Mortgage Bonds. The Committee, consisting of John C. Cutting, John P.
Mulkerin Stephen H.
Mundy and Jeffries Shein, was appointed in September 2000 and Septemberof 2001.

The Committee did not meet during the year 2001. The ad hoc Nominating Committee
will consider qualified nominations for Directors recommended by stockholders.
Recommendations should be sent to Middlesex Water Company, Office of the
Secretary, 1500 Ronson Road, P.O. Box 1500, Iselin, New Jersey 08830-0452. The
Secretary should receive any nominations for Director on or before December 18,
2002.

J. Richard Tompkins has announced that he intends to retire as Chief
Executive Officer of the Company on or about January 31, 2003. IfWalter G. Reinhard was elected a Director at this annual meeting, however, he expects to remain onby the Board of Directors
effective September 1, 2002, and Annette Catino was elected a Director by the
Board of Directors effective January 1, 2003, both for terms expiring with the
2003 Annual Meeting. Mr. Reinhard and Ms. Catino have been nominated to serve as
Directors in his current position as Chairman ofClass II for one-year terms, which will expire at the Board.2004 Annual
Meeting.

PROPOSAL 1

ELECTION OF DIRECTORS

At the Annual Meeting of Stockholders three members of Class IIII of the
Board of Directors are to be elected each to hold office until the Annual
Meeting of Stockholders in the year 2005,2006, and two members of Class II of the
Board of Directors are to be elected to hold office until the Annual Meeting of
Stockholders in the year 2004, and in each case until their respective
successors are elected and qualified. The present terms of the three Directors
included in Class IIII and the two Directors included in Class II expire at the
year 20022003 Annual Meeting.

Proxies in the accompanying form will be voted for these nominees, unless
authority to vote for one or more of them shall have been withheld by so marking
the enclosed proxy. Directors shall be elected by a plurality of the votes cast
at the election.

If at the time of the meeting any of the nominees listed should be unable
to serve, which is not anticipated, it is the intention of the persons
designated as proxies to vote, in their discretion, for other nominees, unless
the number of Directors constituting a full Board is reduced.

There is shown as to each nominee, and as to each Director whose term of
office will continue after the year 20022003 Annual Meeting, age as of the date of
the Annual Meeting, the period of service as a Director of the Company, and
business experience during the last five years.
2

NOMINEES FOR ELECTION AS
DIRECTORS WITH TERMS EXPIRING IN 2006 - CLASS I

NOMINEES FOR ELECTION AS
DIRECTORS WITH TERMS EXPIRING IN 2005 - CLASS III
Business Experience
Name, Period Served as During Past Five Years
Director of Company Age and Other Affiliations
------------------- --- ----------------------

John C. Cutting 66 Retired. Formerly Senior Engineer, Science Applications
Director since 1997 International Corporation, specialists in information, energy
and military systems, Pittsburgh, Pennsylvania.
Chairman of Pension Committee and Capital Improvement Committee
and Member of Audit Committee and ad hoc Pricing Committee.

John P. Mulkerin (1) 65 Retired. Formerly President and Chief Executive Officer of First
Director since 1997 Sentinel Bancorp, Inc., Holding Company for First Savings
Bank, Perth Amboy, New Jersey. Director of First Sentinel
Bancorp, Inc., Raritan Bay Medical Center and Daytop Village
Foundation.
Chairman of Audit Committee and Member of Corporate Governance
Committee, Nominating Committee, Pension Committee and ad hoc
Pricing Committee.

Dennis G. Sullivan 61 President and Chief Executive Officer of the Company since
Director since 1999 January 2003, prior to that date was President and General
Counsel since May 2001; Senior Vice President and General
Counsel since July 2000 and Vice President and General Counsel
since May 1990. Director of Tidewater Utilities, Inc. (TUI);
Director and Chairman of Pinelands Water Company and Pinelands
Wastewater Company; Director of Utility Service Affiliates,
Inc., and Utility Service Affiliates (Perth Amboy) Inc., and
Director and President of Bayview Water Company, subsidiaries
of the Company. Director of White Marsh Environmental Systems,
Inc., a subsidiary of TUI.

(1) See Footnote on page 7.

NOMINEES FOR ELECTION AS
DIRECTORS WITH TERMS EXPIRING IN 2004 - CLASS II

Business Experience
Name, Period Served as During Past Five Years
Director of Company Age and Other Affiliations
------------------- --- ----------------------

Annette Catino 46 President and CEO of QualCare Alliance Networks, Inc., of
Director since January 2003 Piscataway, New Jersey, a managed care organization,
since 1991. Director of Caucus NJ Educational
Corporation, New Jersey Shore Medical Center Foundation,
Executive Women of New Jersey and Liberty Bancorp Inc.
Member of Somerset Medical Center, Women's Health
Advisory Board and The Val Skinner Foundation.
Member of Audit Committee.

Walter G. Reinhard (2) 57 Partner, Law Firm of Norris, McLaughlin & Marcus, P.A. of
Director since September 2002 Bridgewater, New Jersey, since 1984. Director of the
Fanwood-Scotch Plains YMCA.
Chairman of Corporate Governance Committee.

(2) See Footnote on page 7.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR PROPOSAL 1.

DIRECTORS WHOSE TERMS CONTINUE BEYOND
THE 2003 ANNUAL MEETING AND ARE NOT
SUBJECT TO REELECTION THIS YEAR

Expiration Business Experience
Name, Period Served as Date of Term During Past Five Years
Director of Company Age and Class and Other Affiliations
------------------- --- --------- ----------------------

John R. Middleton, M.D. 5758 2005 Chair of the Department of Medicine and
Director since 1999 Class III Chief Medical Officer of Raritan Bay
Medical Center. Fellow of American
College of Physicians and Member of Editorial Board (Infectious
Diseases)the
Infectious Diseases Society of New Jersey Medicine.America.
Member of Audit Committee, Compensation
Committee and Corporate Governance
Committee.

Stephen H. Mundy 69 2004 Retired. Formerly Vice President, A.
Director since 1977 Class II Stanley Mundy, Inc., Public Utility
Contractor, Virginia Beach, Virginia.
Chairman of Compensation Committee and
Member of Capital Improvement Committee
and Nominating Committee.

Jeffries Shein (1) 6263 2005 Managing Partner, JGT Management Co., LLC, a
Director since 1990 Class III management and investment firm, since 2003
and formerly Partner, Jacobson, Goldfarb &
Tanzman DirectorAssociates, a commercial real
estate brokerage firm, since 1990 Industrial and Commercial Brokerage
Firm,1972,
Woodbridge, New Jersey. Director of First
Sentinel Bancorp, Inc., Holding Company
for First Savings Bank, Perth Amboy, New
Jersey, and Chairman of the Board of
Raritan Bay Medical Center.Jersey.
Chairman of Nominating Committee and ad hoc
Pricing Committee and Member of Executive Development and Compensation
Committee and Pension Committee.

J. Richard Tompkins 6364 2005 Chairman of the Board of the Company since May
Director since 1981 since May 2001Class III 2002 and prior to that date was Chairman
of the Board and President since May
1990. Past President of National
Association of Water Companies and Director of New
Jersey Utilities Association. Director
Chairman and PresidentChairman of Tidewater Utilities, Inc.
(TUI);
Director of Pinelands Water Company,
Pinelands Wastewater Company and
Bayview Water Company; and Director
and President of Utility Service
Affiliates, Inc., and Utility Service
Affiliates (Perth Amboy) Inc.,
subsidiaries of the Company. Director
and Chairman of White Marsh
Environmental Systems, Inc., a
subsidiary of TUI.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR PROPOSAL 1.
---

_______________

(1) See Footnote on page 4.

DIRECTORS WHOSE TERMS CONTINUE BEYOND
THE 2002 ANNUAL MEETING AND ARE NOT
SUBJECT TO REELECTION THIS YEAR

Expiration Business Experience
Name, Period Served as Date of Term During Past Five Years
Director of Company Age And Class And Other Affiliations
------------------- --- --------- ----------------------

John C. Cutting 65 2003 Retired. Formerly Consulting Senior
Director since 1997 Class I Engineer, Science Applications
International Corporation,
specialists in information, energy
and military systems, Pittsburgh,
Pennsylvania.
Chairman of Pension Committee and Member
of Audit Committee and Executive
Development and Compensation
Committee.

John P. Mulkerin (1) 64 2003 President, Chief Executive Officer and
Director since 1997 Class I Director of First Sentinel Bancorp,
Inc., Holding Company for First
Savings Bank, Perth Amboy, New
Jersey. Director of FSB Financial
Corp., Raritan Bay Medical Center and
Daytop Village Foundation.
Chairman of Audit Committee and Member of
Nominating and Pension Committees

Stephen H. Mundy 68 2004 Retired. Formerly Vice President, A.
Director since 1977 Class II Stanley Mundy, Inc., Public Utility
Contractor, Virginia Beach, Virginia.
Chairman of Executive Development and
Compensation Committee and Member of
Nominating Committee.

Dennis G. Sullivan 60 2003 President and General Counsel of the
Director since 1999 Class I Company since May 2001, prior to that
date was Senior Vice President and
General Counsel since July 2000 and
prior to that date was Vice President
and General Counsel since May 1990.
Director and Assistant Secretary and
Assistant Treasurer of Tidewater
Utilities, Inc. (TUI); Director and
Chairman of Pinelands Water Company
and Pinelands Wastewater Company;
Director of Utility Service Affiliates, Inc.,
and Utility Service Affiliates (Perth
Amboy) Inc., and Director and President of Bayview
Water Company, Pinelands Water Company,
Pinelands Wastewater Company, subsidiaries
of the Company. Director and Chairman of
White Marsh Environmental Systems, Inc., a
subsidiary of TUI.
_______________Member of Capital Improvement Committee

- ----------
(1) The Company has established a $10,000,000 line of credit with First
Savings Bank, Perth Amboy, New Jersey. At December 31, 2001,2002, there was an
outstanding loan of $1,125,000$2,200,000 at an interest rate of 3.65%3.238% with First
Savings Bank.

4(2) Norris, McLaughlin & Marcus, P.A., has provided legal services to the
Company in the area of utility and regulatory matters for over 30 years.

SECURITY OWNERSHIP OF DIRECTORS, MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS

The following table sets forth, as of March 29, 2002,31, 2003, beneficial ownership
of Middlesex Water Company Common Stock by the elected Directors, Executive
Officers named in the table appearing under Executive Compensation and all
elected Directors and Executive Officers as a group. Jeffries Shein owned 1.46%1.63%
of the shares outstanding on March 29, 2002.31, 2003. All other individual elected
Directors and Executive Officers owned less than 1% of the shares outstanding on
March 29, 2002.

Amount and Nature
of Beneficial
Name Ownership
---- ---------
Directors

John C. Cutting 24,569
John R. Middleton 2,079
John P. Mulkerin 5,250
Stephen H. Mundy 30,005
Jeffries Shein* 111,771
Dennis G. Sullivan 10,615
J. Richard Tompkins** 36,750
Named Executive Officers
Walter J. Brady 15,806
A. Bruce O'Connor 10,284
Ronald F.Williams 7,126

All elected Directors and Executive Officers as a group
including those named above (11) 275,684*31, 2003.

Amount
and Nature
of Beneficial
Name Ownership
---- ---------
Directors
Annette Catino 2,700
John C. Cutting 24,653
John R. Middleton, M.D. 3,003
John P. Mulkerin 5,250
Stephen H. Mundy 41,776
Walter G. Reinhard 1,011
Jeffries Shein* 127,508
Dennis G. Sullivan 8,820
J. Richard Tompkins** 28,611
Named Executive Officers
Walter J. Brady 17,224
A. Bruce O'Connor 13,113
Ronald F. Williams 8,858
All elected Directors and Executive Officers as a group
including those named above (13) 305,711***

_____________- ----------
* Disclaims beneficial ownership of 3,7713,894 additional shares.
** Disclaims beneficial ownership of 700728 additional shares.
*** 3.60%3.91% of the shares outstanding on March 29, 2002.31, 2003.

The following table sets forth information made known to the Company as of
March 25, 2002,11, 2003, of any person or group to be the beneficial owner of more than
five percent of the Company's Common Stock:

Number of Shares
Beneficially Owned
and Nature of Percent
Name and Address Beneficial Ownership (1) of Class
---------------- ------------------------ --------

Verona Construction Company 494,700 6.46%Number of Shares
Beneficially Owned
and Nature of Percent
Name and Address Beneficial Ownership (1) of Class
---------------- ------------------------ --------

Verona Construction Company 494,700 6.33%
Wilmington, Delaware 19801

____________- ----------
(1) Beneficial owner has sole power to vote and dispose of such shares.

EXECUTIVE COMPENSATION

There is shown below information concerning the annual and long-term
compensation for services in all capacities to the Company for the years 2002,
2001 2000 and 19992000 for the Chief Executive Officer and the four most highly
compensated executive officers of the Company.

SUMMARY COMPENSATION TABLE
Restricted All
Name and Stock Other Annual
Principal Position Year Salary Bonus Award Compensation
------------------ ---- ------ ----- ----- ------------
(1) (2)

J. Richard Tompkins 2001 $276,631 -- $ 26,180 $ 9,003
Chairman of the Board and 2000 $273,400 -- $ 43,700 $ 8,845
Chief Executive Officer 1999 $265,000 $ 10,192 $ 51,700 $ 9,416

Richard A 2001 $199,500 -- -- $ 5,082
Russo (3) 2000 $182,400 -- $ 23,300 $ 7,119
Executive Vice President 1999 $176,000 $ 6,769 $ 25,850 $ 6,512

Dennis G. Sullivan 2001 $164,246 -- $ 13,090 $ 7,379
President & General 2000 $142,862 -- $ 23,300 $ 5,786
Counsel and Chief 1999 $130,000 $ 5,000 $ 25,850 $ 5,577
Operating Officer

Walter J. Brady 2001 $142,169 -- $ 13,090 $ 6,301
Senior Vice President - 2000 $139,400 -- $ 23,300 $ 5,671
Administration 1999 $133,000 $ 5,115 $ 25,850 $ 5,400

A. Bruce O'Connor 2001 $140,016 -- $ 13,090 $ 5,086
Vice President and 2000 $135,400 -- $ 23,300 $ 4,882
Controller and Chief 1999 $128,000 $ 4,923 $ 25,850 $ 4,710
Financial Officer

Ronald F. Williams 2001 $133,939 -- $ 13,090 $ 5,106
Vice President - 2000 $128,400 -- $ 23,300 $ 4,837
Operations 1999 $122,000 $ 4,692 $ 25,850 $ 4,837
SUMMARY COMPENSATION TABLE

Restricted All
Name and Stock Other Annual
Principal Position Year Salary Award Compensation
------------------ ---- ------ ----- ------------
(1) (2)
J. Richard Tompkins (3) 2002 $294,631 $52,605 $9,406
Chairman of the Board and 2001 $276,631 $26,180 $9,003
Chief Executive Officer 2000 $273,400 $43,700 $8,845

Dennis G. Sullivan 2002 $191,073 $14,028 $8,943
President and Chief 2001 $164,246 $13,090 $7,379
Operating Officer 2000 $142,862 $23,300 $5,786

A. Bruce O'Connor 2002 $153,939 $14,028 $5,590
Vice President, Controller 2001 $140,016 $13,090 $5,086
and Chief Financial Officer 2000 $135,400 $23,300 $4,883

Walter J. Brady 2002 $152,515 $14,028 $7,376
Senior Vice President - 2001 $142,169 $13,090 $6,361
Administration 2000 $139,400 $23,300 $5,671

Ronald F. Williams 2002 $147,518 $14,028 $6,222
Vice President - 2001 $133,939 $13,090 $5,106
Operations 2000 $128,400 $23,300 $4,837

(1) The number and value of Restricted Stock held in escrow as of December 31,
2001,2002, were as follows: Mr. Tompkins - 11,700/10,950/$264,572;229,622; Mr. Sullivan -
5,400/6,000/$122,110;125,820; Mr. O'Connor - 5,800/$121,626; Mr. Brady - 5,400/5,800/$122,110; Mr. O'Connor -
5,400/$122,110121,626;
and Mr. Williams - 5,400/5,800/$122,110. Upon Mr. Russo's
retirement on July 1, 2001, restrictions lapsed on 2,450 shares
previously held in escrow for his benefit. At that same time, another
2,450 shares held in escrow for Mr. Russo were forfeited and returned
to the Company. Generally, the restrictions lapse on these awards five
years from the date of grant. The restrictions also lapse in the event
of a change in control of the Company. All dividends on these shares
are paid to the awardees.121,626.

(2) Includes employer contributions to the Company's defined contribution plan
and life insurance premiums for 2002: Mr. Tompkins ($6,417 and $2,989),
Mr. Sullivan ($7,000 and $1,943), Mr. O'Connor ($5,374 and $216), Mr.
Brady ($5,907 and $1,469), and Mr. Williams ($5,732 and $490); for 2001:
Mr. Tompkins ($5,950 and $3,053), Mr. Russo ($3,798 and $1,284), Mr. Sullivan ($5,735 and $1,644), Mr.
O'Connor ($4,887 and $199), Mr. O'Connor ($4,887 and $199), Mr. Brady
($4,962 and $1,399), Mr. O'Connor ($4,887 and $199) and Mr. Williams ($4,674 and $432); for 2000: Mr.
Tompkins ($5,950 and $2,895), Mr. Russo ($5,950 and $1,169), Mr. Sullivan ($4,962 and $824), Mr. O'Connor
($4,697 and $186), Mr. Brady ($4,841 and $830), Mr. O'Connor ($4,697

and $186) and Mr. Williams ($4,270 and $567); for 1999: Mr. Tompkins
($5,600 and $3,816), Mr. Russo ($5,600 and $912), Mr. Sullivan ($4,550 and
$1,027), Mr. Brady ($4,341 and $1,059) , Mr. O'Connor ($4,480 and $230) and Mr. Williams ($4,270
and $567).

(3) Richard A. RussoMr. Tompkins retired on Julyas an employee of the Company effective February 1,
2001.2003.

COMPENSATION OF DIRECTORS

A Director who is not an officer of the Company or its subsidiaries is
paid an annual retainer of $8,100 and a fee of $600 for attendance at Board of
Directors (Board) meetings; a fee of $300 for attendance at special meetings of
the Board and a fee of $150 for attendance at special Board Committee meetings
by

means of communications facilities and a fee of $400 for each committee meeting
attended. Committee chairmen receive an additional $200 for each committee
meeting chaired. Directors who are officers of the Company are paid a fee of
$300 for each meeting of the Board attended.

COMPENSATION PURSUANT TO PENSION PLANS

Annual Benefit based on Average Annual Compensation and Years of Service

Remuneration Years of Service
-------------- ----------------------------------------------------------------------- ------------ -------------------------------------------------------------------------
15 20 25 30 35 45
---------- ---------- ------------ ---------- --------- ------------------- -------- -------- -------- -------- --------

$100,000 $56,640 $56,640 $56,640 $56,640 $56,640 $70,534$ 55,080 $ 55,080 $ 55,080 $ 55,080 $ 55,080 $ 70,025
$125,000 $75,390 $75,390 $75,390 $75,390 $75,390 $90,284$ 73,830 $ 73,830 $ 73,830 $ 73,830 $ 74,150 $ 89,775
$150,000 $94,140 $94,140 $94,140 $94,140 $94,140 $110,034$ 92,580 $ 92,580 $ 92,580 $ 92,580 $ 92,580 $109,525
$175,000 $112,890 $112,890 $112,890 $112,890 $112,890 $125,834$111,330 $111,330 $111,330 $111,330 $124,025 $149,025
$200,000 $131,640 $131,640 $131,640 $131,640 $131,640 $131,640$130,080 $130,080 $130,080 $130,080 $130,080 $149,025
$225,000 $150,390 $150,390 $150,390 $150,390 $150,390 $150,390$148,830 $148,830 $148,830 $148,830 $148,830 $149,025
$250,000 $169,140 $169,140 $169,140 $169,140 $169,140 $169,140$167,580 $167,580 $167,580 $167,580 $167,580 $167,580
$300,000 $206,640 $206,640 $206,640 $206,640 $206,640 $206,640$205,080 $205,080 $205,080 $205,080 $205,080 $205,080

All employees, including the named executives, who receive pay for 1,000
hours during the year are included in the Company's Qualified Defined Benefit
Pension Plan (Qualified Plan). Under the noncontributory trusteed Qualified
Plan, current service costs are funded annually. The Company's annual
contribution is determined on an actuarial basis. Benefits are measured from the
member's entry date and accrue to normal retirement date or date of early
retirement. Benefits are calculated, at normal retirement, at 1.25% of pay up to
the employee's benefit integration level, plus 1.9% of such excess pay,
multiplied by service to normal retirement date, capped at 35 years of such
excess pay, multiplied by service to normal retirement date of age 65. Average
pay is the highest annual average of total pay during any 5 consecutive years
within the 10 calendar-year period prior to normal retirement date. The benefit
integration level is based on the 20012002 Summary Compensation Table. The benefit
amounts are not subject to any deduction for Social Security benefits or other
offset amounts.

During the year 2001,2002, the Company was not required to make a statutory
contribution to the Qualified Plan.Plan in the amount of $0.5 million.

The estimated credited years of service based on normal retirement at age
65 includes 22 years, 44 years, 22 years, 33 and 19 years for Messrs. Tompkins,
Brady, Sullivan, O'Connor and Williams, respectively. Mr. Tompkins retired
effective February 1, 2003, with 21 years of service.

Supplemental Executive Retirement Plan - The named executive officers and
certain other executive officers are eligible to participate in the deferred
compensation plan known as the Supplemental Executive Retirement Plan (Executive
Plan) at the discretion of the Board of Directors.

A participant who retires on his normal retirement date is entitled to an
annual retirement benefit equal to 75% of his compensation reduced by his
primary Social Security benefit and further reduced by any benefit payable from
the Qualified Plan. In certain cases further reductions are made for benefits
from other employment. Generally, a participant is vested at 10 years of
service. Annual retirement benefits are payable for 15 years either to the
participant or his beneficiary. Retirement benefits may be in the form of single
life annuity,

joint and 50% survivors annuity, joint and 100% survivors annuity, single life
annuity with a 10-year certain period and single life annuity with a 15-year
certain period paid on an actuarial equivalent basis.

The Company is not obligated to set aside or earmark any monies or other
assets specifically for the purpose of funding the Executive Plan, except that
upon a change of control the Company would be obligated to make contributions to
a trust anticipated to be sufficient to meet its obligations under the Executive
Plan. In any event, the benefits are in the form of an unfunded obligation of
the Company. The Company has elected to purchase corporate-owned life insurance
as a means of satisfying its obligation under the Executive Plan. The Company
reserves the right to terminate any plan or life insurance at any time; however,
a participant is entitled to any benefits he would have been entitled to under
the Executive Plan provisions. For the year 20012002 the Company paid life insurance
premiums totaling $0.1 million for Messrs. Tompkins, Russo, Brady, O'Connor, Sullivan
and Williams, which provides a pre-retirement net death benefit of 1-1/2 times
base salary at date of death.

Defined Contribution Plan - Under its 401(k) Plan, the Company matches
100% of that portion of the employee contribution that does not exceed 1% of
base pay, plus an additional 50% of that portion from 2% to 6% of base pay.
Distributions under the 401(k) Plan are made upon normal retirement, total and
permanent disability or death and are subject to certain vesting provisions as
to Company contributions.

Change of Control Agreements - The Company has change of control
termination agreements with the named executive officers, and the other
executive officers. These agreements provide that if the executive is terminated
by the Company, other than for death, disability, cause (as defined in the
agreement) or good reason (as defined in the agreement) within three years after
a change of control, the executive is entitled to receive (a) a lump sum
severance payment equal to the sum of three times the executive's average total
compensation for the five years prior to the termination; (b) continued coverage
for three years under any health or welfare plan in which the executive and the
executive's dependents were participating; and (c) an additional amount
sufficient to pay any additional tax liability resulting from the severance
payments and benefits under this, and any other plans or agreements. In
addition, the executive will be entitled to receive benefits under the Executive
Plan, at the executive's otherwise normal retirement date, with such benefits
calculated as if the executive had continued employment to age 65, unless the
executive elects to receive such benefits at a lesser amount at termination.
Further, all restricted stock held by the executive will become unrestricted
(with respect to the plan's five year holding period) upon a change of control.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the 20012002 Compensation Committee (formerly the Executive
Development and Compensation CommitteeCommittee) were John C. Cutting, Stephen H. Mundy
and Jeffries Shein. During 2001,2002, no member of the Executive Development and
Compensation Committee was an officer or employee of the Company or a
subsidiary. 8In September 2002, John R. Middleton, M.D., was appointed a member
of the Compensation Committee and John C. Cutting was reassigned.

EXECUTIVE DEVELOPMENT AND

COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION

Overview

The Executive Development and Compensation Committee of the Board of Directors administers the
compensation program for executive officers of the Company. The Committee for
the year 2002 iswas composed of three independent Directors: John C. Cutting,
Stephen H. Mundy and Jeffries Shein. The Committee for the year 2003 is composed
of three independent Directors: John R. Middleton, M.D., Stephen H. Mundy and
Jeffries Shein. The Committee is responsible for setting and administering the
policies that govern annual compensation and Restricted Stock awards. The full
Board of Directors approves policies and plans developed by the Committee.

The Committee's compensation policies and plans applicable to the
executive officers seek to enhance the profitability of the Company and
shareholder value, as well as control costs and maintain reasonable rates for
the customers. The Committee's practices reflect policies that compensation
should (1) attract and retain well-qualified executives, (2) support short- and
long-term goals and objectives of the Company, (3) reward individuals for
outstanding contributions to the Company's success, (4) be meaningfully related
to the value created for shareholders, and (5) relate to maintenance of good
customer relations and reasonable rates.

The Committee meets with Mr. Tompkinsthe Chief Executive Officer to evaluate the
performance of the other executive officers and meets in the absence of Mr. Tompkinsthe
Chief Executive Officer to evaluate his performance. The Committee reports on
all executive evaluations to the full Board of Directors.

Salary Compensation

Base salary levels are reviewed annually using compensation data produced
by an independent compensation consultant for similar positions and comparable
companies. Base salaries for satisfactory performance are targeted at the median
of the competitive market. Individual performance of the executive is determined
and taken into account when setting salaries against the competitive market
data. The Committee reviews, as well, the individual's efforts on cost control
and his or her contributions to the results of the year. The Committee also
reviews the Company's financial results compared with prior years and compared
with other companies. It compares salaries with both water and general industry
salaries.

The factors and criteria upon which Mr. Tompkins'the Chief Executive Officer's
compensation was based generally include those discussed with respect to all the
executive officers. Specifically, however, his salary is based on his overall
performance and that of the Company. His salary was set at a rate, which was
approximately the median of the utility market and below that of the general
industry. In addition, in evaluating the performance of the CEO,Chief Executive
Officer, the Committee has taken particular note of management's success with
respect to the growth of the Company.

Restricted Stock

The Company maintains a restricted stock plan for the purpose of
attracting and retaining key executives and other employees having managerial or
supervisory responsibility who have contributed, or are likely to contribute,
significantly to the long-term performance and growth of the Company and its
subsidiaries. This plan is designed to enhance financial performance, customer
service and corporate efficiency through a performance-based stock award. Annual
stock awards are based upon several factors including the participant's ability
to contribute to the overall success of the Company.
9

The level of awards and the value of the performance are reviewed annually
by the Committee. The Committee submits reports on all executive evaluations and
restricted stock awards to the full Board of Directors for approval.

Year 2002 Executive Development and2003 Compensation Committee
Stephen H. Mundy, Chairman
John C. CuttingR. Middleton, M.D.
Jeffries Shein

AUDIT COMMITTEE REPORT

The Audit Committee of the MWCo Board of Directors is composed of four
independent directors, one of whom has significant accounting and financial
expertise. The Committee for the year 2002 was composed of three independent
directors. ItDirectors: John C. Cutting, John R. Middleton, M.D. and John P. Mulkerin.
Annette Catino was appointed a member of the Audit Committee in January 2003.
The Audit Committee operates under a written charterCharter adopted by the Board of
Directors.

Management is responsible for MWCo'sthe Company's financial statements and
internal controls. The independent accountants of MWCo,Middlesex Water, Deloitte &
Touche LLP, are responsible for performing an independent audit of MWCo'sthe Company's
annual consolidated financial statements in accordance with generally accepted
auditing standards and for issuing a report thereon. The Committee's
responsibility is to assist the Board of Directors in overseeing the quality and
integrity of the accounting, auditing and financial reporting practices.

In this context, the Committee has met and held discussions with
management and the independent accountants. Management represented to the
Committee that MWCo'sthe Company's consolidated financial statements were prepared in
accordance with generally accepted accounting principles, and the Committee has
reviewed and discussed the consolidated audited financial statements with
management and the independent accountants. The Committee discussed with the
independent accountants the matters required to be discussed by Statement on
Auditing Standards No. 61, as amended (Communication with Audit Committees),
which includes, among other things:

o Changes in significant accounting policies;

o The process used by management in formulating accounting estimates
and the basis for the auditors' conclusions regarding the
reasonableness of these estimates;

o Any disagreements, if any, with management over the application of
accounting principles;

o Audit adjustments; and

o Disclosures in the financial statements.

The independent accountants also provided to the Committee the written
disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Committee discussed
with the independent accountants the firm's independence with respect to
MWCoMiddlesex Water and its management. The Committee has considered whether the
independent accountants' provision of non-audit services to MWCothe Company is
compatible with maintaining their independence.

Based on the Committee's discussions with management and the independent
accountants, the Committee's review of the audited financial statements, the
representations of management regarding the audited financial statements and the
report of the independent accountants to the Committee, the Committee
recommended to the Board of Directors that the audited financial statements be
included in MWCo'sthe

Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2001,2002, for filing with the Securities and Exchange Commission.

The Committee also discussed with senior management the process used for
the establishment and maintenance of disclosure controls and procedures in
quarterly and annual reports which is required by the Securities and Exchange
Commission (SEC) and the Sarbanes-Oxley Act of 2002 for certain of the Company's
filings with the SEC.

The Committee met privately with the independent auditors who have
unrestricted access to the Audit Committee.

Year 20022003 Audit Committee
John P. Mulkerin, Chairman
Annette Catino
John C. Cutting
John R. Middleton, M.D.

STOCK PERFORMANCE GRAPH

Set forth below is a line graph comparing the yearly change in the
cumulative total return (which includes reinvestment of dividends) of a $100
investment for the Company's Common Stock, a peer group of investor-owned water
utilities, and the Wilshire 5000 Stock Index for the period of five years
commencing December 31, 1996.1997. The current peer group includes American States
Water Company, American Water Works Company, Inc., Artesian Resources Corp., California Water Service Company,
Connecticut Water Service, Inc., Pennichuck Corp., Philadelphia Suburban
Corporation, SJW Corp., Southwest Water Company, York Water Company and the
Company. As a result of the terminated merger of SJW
Corp., it was added back toAmerican Water Works Company has been removed from the Peer Group.Group due
to its acquisition by another entity. The Wilshire 5000 Stock Index measures the
performance of all U.S. headquartered equity securities with readily available
price data.

[GRAPHI-STOCK PERFORMANCE GRAPH-PLOTTED POINTS BELOW]
--------------- ----------- ----------- ---------- ---------- ---------- ------------
12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
--------------- ----------- ----------- ---------- ---------- ---------- ------------

Middlesex $100 $141 $160 $221 $244 $254
--------------- ----------- ----------- ----------- --------- ---------- ------------
Peer Group 100 138 172 145 187 241
--------------- ----------- ----------- ----------- --------- ---------- ------------
Wilshire 5000 100 131 162 200 178 159
--------------- ----------- ----------- ----------- --------- ---------- ------------

12[LINE GRAPH OMITTED]

================================================================================
12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02
- --------------------------------------------------------------------------------
Middlesex $100 $114 $157 $173 $180 $187
- --------------------------------------------------------------------------------
Peer Group 100 121 133 155 174 167
- --------------------------------------------------------------------------------
Wilshire 5000 100 123 153 136 121 96
================================================================================

PROPOSAL 2

APPOINTMENT OF INDEPENDENT AUDITORS

Upon the recommendation of the Audit Committee, the Board of Directors has
appointed Deloitte & Touche LLP of Parsippany, New Jersey, as independent
auditors to makeperform the annual audit of the books of account and supporting
records of the Company for the year 2002,2003, subject to the approvalratification of the
stockholders entitled to vote for the election of Directors, by a majority of
the votes cast on the question of such approval, provided a quorum is present,
at the Annual Meeting of Stockholders.

Representatives of Deloitte & Touche LLP will be present at the meeting,
and will be afforded an opportunity to make a statement if they so desire and to
respond to appropriate questions.

ACCOUNTING FIRM FEES

Aggregate fees billed to the Company for the fiscal year ending December
31, 2002, and 2001 by the Company's accounting firm, Deloitte & Touche LLP:

Year ended
2002 2001
-------- --------
Audit Fees $99,000{a}
Financial Information Systems$148,105 $ 0{b}99,000
Audit-Related Fees {a} 27,000 15,000
-------- --------
Total audit and audit-related fees $175,105 $114,000

Tax Fees {b} 17,850 34,205
All Other Fees $ 66,745{c}{c} {d} __________0 17,540
-------- --------
Total Fees $192,955 $165,745

{a} Audit Fees - The aggregate fees billed by Deloitte & Touche LLP, for
professional services rendered for the audit of the annual consolidated
financial statements and the review of the financial statements included in
quarterly reports on Form 10-Q of Middlesex Water Company for the year
ended December 31, 2001 totaled $99,000.

{b} Financial Information Systems Design and Implementation Fees - No fees were
billed by Deloitte & Touche for professional services rendered for
information technology services relating to financial information systems
and implementation for the year ended December 31, 2001.

{c} All Other Fees - The aggregate fees billed by Deloitte & Touche for
services rendered to the Company, other than the services described above
under "Audit Fees" and "Financial Information Systems Design and
Implementation Fees", for the year ended December 31, 2001 were $66,745,
representing audit and non-audit related services. Audit related services
includeIncludes 2002 fees for the audits of employee benefit plans ($15,000). Non-auditof
$15,000 and certain agreed-upon procedures of $12,000.
Includes 2001 fees for the audits of employee benefit plans of
$15,000.

{b} Includes 2002 and 2001 fees for the preparation of tax returns
and tax related services includeof $17,850 and $34,205, respectively.

{c} Includes 2001 fees related to preparation of Tax Returns and Tax related
services ($34,205) andfor a Human Resources Survey ($17,540).of $17,540.

{d} All Other Fees include no amounts of fees for services
provided by Deloitte Consulting for the years ended December
31, 2002 and 2001.

In March 2003, the Audit Committee established pre-approval policies and
procedures for all audit and non-audit services to be performed by Deloitte &
Touche has recently announced its intent to separate Deloitte Consulting
from Deloitte Touche Tohmatsu.

{d} The Audit Committee has considered whether the provision of these services
is compatible with maintaining the accounting firm's independence.LLP.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE FOR THE APPOINTMENT OF DELOITTE & TOUCHE LLP.
---

PROPOSAL 3

AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION TO
INCREASE THE AUTHORIZED COMMON STOCK FROM 10,000,000 SHARES TO
20,000,000 SHARES

The Board of Directors unanimously recommends that the stockholders approve
an amendment to the Company's Restricted Certificate of Incorporation increasing
the authorized Common Stock, without par value, from 10,000,000 shares to
20,000,000 shares. The text of the proposed amendment is attached hereto as
Appendix A.

As of March 29, 2002, 7,659,224 shares of the 10,000,000 shares of Common.
Stock presently authorized were outstanding. 2,000,000 shares have been reserved
for issuance for other purposes, including the Dividend Reinvestment and Common
Stock Purchase Plan.

The Board of Directors believes that it would be in the best interests of
the Company to have additional shares available for issuance at its discretion
for acquisitions, financings, stock dividends or splits, and other corporate
purposes. The Company has no specific plans and there are no commitments,
understandings or negotiations at this time with respect to the issuance of
additional shares of Common stock. The proposed amendment would not change the
terms of the Common stock, which does not have preemptive rights. No further
stockholder authorization for the issuance of the additional shares will be
solicited prior to issuance.

The power of the Board of Directors to issue additional shares of Common
Stock (within the limits imposed by applicable law) with voting or other rights
which might impede or discourage a takeover attempt, may make the Company a less
attractive takeover candidate, and may deter takeover attempts not approved by
the Board in which stockholders might receive for some or all of their shares a
substantial premium above market value at the time such takeover bid is made.

Vote Required for Proposal 3

The amendment of Article 7A of the Restated Certificate of Incorporation,
which constitutes Proposal 3, will require the affirmative vote of the holders
of two-thirds of the shares of the Company's Common Stock voting at the 2002
Annual Meeting (assuming the presence of a quorum).

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THE AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION.

STOCKHOLDER PROPOSALS

Stockholders are entitled to submit proposals on matters appropriate for
stockholder action consistent with regulations of the Securities and Exchange
Commission. Should a stockholder intend to present a proposal at next year'sthe annual
meeting to be held in the year 2004, you must submit your proposal to the
Secretary of the Company at 1500 Ronson Road, P.O. Box 1500, Iselin, New Jersey
08830-0452, must receive it not later than December 18, 2002,17, 2003, in order to be includedconsidered for
inclusion in the Company's proxy statement and form of proxy relating to that meeting.the
2004 Annual Meeting.

OTHER MATTERS

The management of the Company does not intend to bring any other matters
before the meeting and has no reason to believe any will be presented to the
meeting. If, however, other matters properly do come before the meeting, it is
the intention of the persons named in the accompanying proxy to vote in
accordance with their judgment in such matters.

14
MINUTES OF 20012002 MEETING OF STOCKHOLDERS

The minutes of the 20012002 meeting of Stockholders will be submitted at the
meeting for the correction of any errors or omissions but not for the approval
of the matters referred to therein.

By Order of the Board of Directors,

/S/MARION F. REYNOLDS
---------------------
MARION F. REYNOLDS
Secretary

Iselin, New Jersey
April 16, 200217, 2003

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 and files an Annual Report on Form 10-K with the Securities
and Exchange Commission. Additional copies of the 20012002 Annual Report on Form
10-K filed by the Company, including the financial statements and schedules, but
without exhibits, can be mailed without charge to any shareholders. The exhibits
are obtainable from the Company upon payment of the reasonable cost of copying
such exhibits. Shareholders can request this information by phone at
732-634-1500, ext. 212, e-mail mreynolds@middlesexwater.com or by mail to Marion
F. Reynolds, Vice President, Secretary and Treasurer, Middlesex Water Company,
1500 Ronson Road, Iselin, New Jersey 08830.
15

APPENDIX A
PROPOSED AMENDMENT OF THE FIRST SENTENCE OF
ARTICLE 7A OF THE RESTATED CERTIFICATE OF INCORPORATION

ARTICLE 7A. The total authorized capital stock of the Company is 20,240,497
shares, divided into 20,000,000 shares of common stock without par value,
140,497 shares of preferred stock without nominal or par value and 100,000
shares of preference stock without nominal or par value.

A - 1

[THIS PAGE INTENTIONALLY LEFT BLANK]

[LOGO] MIDDLESEX WATER COMPANY

1500 Ronson Road
Iselin, New Jersey 08830-302008830-0452
732-634-1500
www.middlesexwater.com

[GRAPHIC-STREET MAP]]- --------------------------------------------------------------------------------

Map to be inserted here

- --------------------------------------------------------------------------------

DIRECTIONS TO MIDDLESEX WATER COMPANY

FROM GARDEN STATE PARKWAY (NORTH OR SOUTH): Take Exit 131A to third traffic
light. Turn right onto Middlesex-Essex Turnpike and proceed (about 1/2 mile) to
third traffic light (Gill Lane). Turn right and go (about 1 mile) under railroad
underpass and make right onto Ronson Road. Proceed past three large mirror-sided
office buildings on the right. At the sign, make a right into Middlesex Water
Company.

FROM NEW JERSEY TURNPIKE (NORTH OR SOUTH): Take Exit 11 onto the Garden State
Parkway North and follow above directions.

FROM US ROUTE NO. 1 (NORTH OR SOUTH): Proceed to the Woodbridge Center area and
follow signs to Gill Lane. When on Gill Lane, make left turn onto Ronson Road
and follow above directions.

[X]REVOCABLE PROXY
MIDDLESEX WATER COMPANY

|X| PLEASE MARK VOTES AS IN THIS EXAMPLE

REVOCABLE PROXY
MIDDLESEX WATER COMPANY

ANNUAL MEETING OF SHAREHOLDERS
MAY 22,200228,2003

The undersigned stockholder(s) hereby appoint(s) John C. CuttingR. Middleton, M.D.
and Dennis
G. Sullivan,J. Richard Tompkins, and each of them, proxies, with the power to appoint
his substitute, and hereby authorizes them to represent and to vote as
designated, all the shares of common stock of Middlesex Water Company held on
record by the undersigned on March 29, 2002,31, 2003, at the annual meeting of
shareholders to be held on May 22, 2002,28, 2003, at 11:00 a.m., local time or any
adjournment thereof.

With- For All
For hold Except

1. Election of Directors, Nominees for Class IIII |_| |_| |_|
term expiring in 20052006 are:

John R.Middleton, M.D., Jeffries SheinC. Cutting, John P. Mulkerin and
J. Richard Tompkins

With- For All
For hold Except
[_] [_] [_]Dennis G. Sullivan

Nominees for Class II term expiring in 2004 are:

Annette Catino and Walter G. Reinhard

INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and writethatwrite that nominee's name in the space provided below.

- --------------------------------------------------------------------------------
For Against Abstain

2. Approve the appointment of Deloitte & Touche |_| |_| |_|
LLP as auditors for the Company for the year
2002.

For Against Abstain
[_] [_] [_]

3. Approve the amendment to the Restated Certificate of Incorporation to
increase the Authorized Common Stock from 10,000,000 shares to 20,000,000
shares.

For Against Abstain
[_] [_] [_]2003.

In their discretion, the Proxies are authorized to voteuponvote upon such other
business that may properly come before the meeting.

PLEASE CHECK BOX IF YOU PLAN TO ATTEND THE MEETING. [_]-------------> |_|

If this Proxy is properly executed andreturned,and returned, the shares represented
hereby will be voted. If not otherwise specified, this Proxy will be voted FOR
the persons nominated asdirectors,as directors, and FOR proposalsproposal number 2 and 3.2.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

---------------------------------
Please be sure to sign and date Date
this Proxy in the box below.
___________________________________________________
Date

___________________________________________________
Shareholder- --------------------------------------------------------------------------------

- ------Shareholder sign above

___________________________________________________
Co-holderabove-------------Co-holder (if any) sign above

=>above----------

- --------------------------------------------------------------------------------
^ Detach above card, sign, date and mail in postage paid envelope provided. =>^

[LOGO] MIDDLESEX WATER COMPANY
c/o Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016-3572
www.middlesexwater.com

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PLEASE DATE AND SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR ON THIS PROXY.

When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If signer is a corporation, please sign
full corporate name by authorized officer and attach a corporate seal. For
joint account, each joint owner should sign.

PLEASE ACT PROMPTLY

BE SURE TO COMPLETE, SIGN AND RETURN THIS PROXY, WHETHER OR NOT YOU ELECT
TO BE PRESENT IN PERSON. ALL SIGNATURES MUST APPEAR EXACTLY AS NAMES
APPEAR ON THIS PROXY.

THANK YOU
- --------------------------------------------------------------------------------

Annual Meeting of Shareholders - May 22, 2002,28, 2003, at 11:00 a.m.
Middlesex Water Company - 1500 Ronson Rd., Iselin, NJ

IF YOUR ADDRESS HAS CHANGED, PLEASE PRINT YOUR NEW ADDRESS IN THE SPACE PROVIDED
BELOW AND RETURN THIS PORTION WITH YOUR PROXY IN THE ENVELOPE PROVIDED.

______________________________

___________________________________________________________________

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