Connecticut
Water enters into Water Supply Agreement
with South Central Connecticut Regional Water Authority
CLINTON,
CONNECTICUT, May 15, 2006 — Connecticut Water
Service Inc. (NASDAQ:CTWS) announced today that it has reached
an agreement with the South Central Connecticut Regional Water
Authority (RWA) in New Haven to purchase up to one million
gallons of water to serve customers on its Guilford Water
System, through an interconnection in the town of Guilford.
Connecticut
Water’s Guilford Water System serves 14,400 customers
or about 50,400 people in Guilford, Madison, Clinton, Westbrook
and Old Saybrook. The Company has been engaged in other water
supply projects for the Guilford System including a recently
completed $5 million improvement to the Company’s Killingworth
Reservoir Dam, which has created a 60 percent increase in
water storage capacity of the reservoir. The RWA agreement
and Killingworth Dam project will improve service and reliability
as well as provide additional flexibility in meeting the water
supply needs of the Guilford System.
According
to Thomas R. Marston, Connecticut Water’s vice president,
Planning and Treatment, the agreement with RWA is a cost efficient
means of adding additional supply. “This agreement allows
us to reserve water supply capacity to meet the needs of future
generations. It would have cost Connecticut Water significantly
more to develop and obtain the necessary permits for new sources
of supply or to increase the capacity of existing sources
to have access to an additional one million gallons of water
per day. Despite the fact that the
Guilford
System has a significant increase in population every summer
and high summer peak demands, we are confident that we have
addressed the water supply needs for this system for decades
to come,” said Marston.
The
agreement has been approved by RWA’s five member Authority.
The initial term of the agreement is 50 years with options
to renew in 20-year increments thereafter.
The
water supply agreement is subject to the review and approval
by the Connecticut Department of Public Utility Control. In
order to access the full capacity allowed in the agreement,
permits will be needed from the Connecticut Department of
Public Health and the Department of Environmental Protection
and Connecticut Water will need to construct a pump station.
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FOR MORE INFORMATION
Thomas
R. Marston
Vice President – Planning & Treatment
800-428-3985, Ext. 3054
Connecticut Water Service, Inc.
93 West Main Street, Clinton, CT 06413-1600
Connecticut Water Service, Inc. is the largest, domestic-based,
investor-owned water utility in New England. It provides water
to over 80,000 customers in 41 towns in Connecticut, as well
as providing water-related services under contract in municipalities
and companies.
This
press release may contain certain forward-looking statements
regarding the Company’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 the Company’s actual
results to differ materially from expected results.
Our
water companies are 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
of rate relief, when necessary, 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, 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 contract work. We undertake no obligation to update
or revise forward-looking statements, whether as a result
of new information, future events, or otherwise.
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