Contacts:

DPUC Approves Sale of Birmingham Utilities to South Central Connecticut Regional Water Authority and The Connecticut Water Company
RWA to acquire Ansonia Division, CWC to acquire Eastern Operations

ANSONIA, CONNECTICUT – November 21, 2007 – The Connecticut Department of Public Utility Control (DPUC) approved the sale of Birmingham Utilities to the South Central Connecticut Regional Water Authority (RWA) of New Haven, Conn. and the Connecticut Water Company of Clinton, Conn.  RWA will acquire the 9,500 Birmingham Utilities customers in Ansonia, Derby, and Seymour. As part of the transaction, Connecticut Water will pay $3.5 million for the assets of Birmingham Utilities’ Eastern Division, which has 2,200 customers in 15 towns.   

The DPUC decision noted that “Connecticut Water possesses the resources and technical ability to assume operations of the BUI Eastern Division.”  It also stated, “RWA has the requisite financial and technical abilities to operate the Ansonia Division of BUI” and that “The Department finds the proposed acquisition to be in the long-term public interest.” This DPUC decision was a critical step in the approval process.  The transaction is scheduled to close in January 2008.  

The BUI customers will benefit from being served by larger utilities that have the resources and capital to invest in future system improvements, as well as the expertise of highly qualified professional engineers, water treatment and distribution system operators and customer service representatives that are on staff.  

“We have been planning for the integration of the companies.  For years, BUI has run a quality operation and from the customers’ perspective, we will continue to build upon that strong record of customer service.  Our goal is to provide the BUI customer with a seamless, transparent integration,” said David Silverstone, president and CEO of the South Central Connecticut Regional Water Authority.

Birmingham announced its intent to sell to RWA and Connecticut Water on June 29, 2007. The innovative partnership between the RWA and Connecticut Water to purchase Birmingham Utilities, allows the acquisition to proceed in a way that is consistent with the RWA’s enabling legislation, which limits its water utility acquisitions to the towns in its district. The Ansonia operations are within the RWA district and the remaining systems more closely fit in the Connecticut Water service area.  

”Since the sale was announced, we have had a cross-functional team of Connecticut Water and Birmingham employees working to ensure a smooth transition. We plan to have the Birmingham Eastern Operations employees, customers and water systems operations fully integrated into Connecticut Water at the time of the closing,” said Eric W. Thornburg, Connecticut Water president and CEO.  “We’ve also toured all water systems and facilities, and have met with several town leaders in anticipation of the acquisition.”

Thornburg said Connecticut Water has experience in the acquisition, integration, and operation of other water utilities, having acquired 26 water systems since 1985.  “We look forward to serving the Eastern Operations customers and continuing to build on the good work that BUI has done to improve infrastructure and the service quality of the water systems.”   

In addition to the DPUC, the acquisition has been approved by BUI shareholders and received regulatory approval of the Authority’s Representative Policy Board.

# # #

Editors note:
About the South Central CT Regional Water Authority: It is a non-profit public corporation and political subdivision of the State of Connecticut. In 1980, the Authority acquired the New Haven Water Company, an investor owned water utility, which was founded in 1849. It owns more than 26,000 acres of land, provides a wide array of recreational opportunities and provides water-related services. Through its Whitney Water Center, the Authority provides hands-on water science programs to some 16,000 students annually.

About The Connecticut Water Company: It provides water to more than 83,000 customers, or nearly 300,000 people, in 41 towns in Connecticut, and is the largest subsidiary of Connecticut Water Service, Inc. (NASDAQ GS: CTWS), New England’s largest locally based investor owned water utility company. CTWS also provides water related services to residential, commercial and industrial customers as well as municipalities and other water utilities through its New England Water Utility Services subsidiary.

About Birmingham Utilities, Inc.: BIW Limited is the parent company of Birmingham Utilities and Birmingham H2O Services. Birmingham Utilities serves a total of 11,500 customers, with 9,500 in their Ansonia Division service towns of Ansonia, Derby and Seymour. They serve an additional 2,200 customers in 32 water systems in their Eastern Division in the towns of Ashford, Colchester, Columbia, Coventry, East Haddam, East Hampton, Hebron, Lebanon, Manchester, Marlborough, Moodus, Portland, Storrs, Willington and Woodstock. BIW is traded on the American Stock Exchange (AMEX: BIW). Trading of BIW stock was voluntarily suspended at the close of business on Thursday, June 28th pending this announcement.

This news release may contain certain forward-looking statements regarding Connecticut Water’s results of operations and financial position. These forward-looking statements are based on current information and expectations, and are subject to risks and uncertainties, which could cause Connecticut Water’s actual results to differ materially from expected results.

The Connecticut Water Company, our regulated water subsidiary, is subject to various federal and state regulatory agencies concerning water quality and environmental standards. Generally, the water industry is materially dependent on the adequacy of approved rates to allow for a fair rate of return on the investment in utility plant. The ability to maintain our operating costs at the lowest possible level while providing good quality water service is beneficial to customers and stockholders. Profitability is also dependent on the timeliness and amount of rate relief and numerous factors over which we have little or no control, such as the quantity of rainfall and temperature, industrial demand, financing costs, energy rates, tax rates, and stock market trends which may affect the return earned on pension assets, and compliance with environmental and water quality regulations. The profitability of our other revenue sources is subject to the amount of land we have available for sale and/or donation, the demand for the land, the continuation of the current state tax benefits relating to the donation of land for open space purposes, regulatory approval of land dispositions, the demand for telecommunications antenna site leases and the successful extensions and expansion of our service contracts. We undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.