Connecticut Water Service, Inc., Increases Dividend for
37th Consecutive Year Reports Second Quarter 2006 Earnings

          Clinton, Connecticut, August 9, 2006 – Connecticut Water Service, Inc. (NASDAQ:CTWS) announced that its Board of Directors approved an increase of the quarterly dividend on common shares to $0.215 per quarter from $0.2125 per quarter. This is the 37th year that the Company has been able to increase its dividend payout to shareholders. The Company also announced that its income from Continuing Operations for the second quarter of 2006 was $977,000, or $0.12 per basic common share. Compared with the second quarter of 2005 this is a decrease of $206,000, or $0.03 per basic common share.

          Contributing to the decrease in Net Income from Continuing Operations, Net Income from the Water Activities segment decreased by approximately $198,000 due to higher Operation and Maintenance expenses and increased Interest and Debt expenses associated with two debt issuances in the fourth quarter of 2005. Partially offsetting these increases were greater Operating Revenues due to higher consumption compared to the prior year and an increase in interest earned on the proceeds of the sale of assets of Barnstable Water Company.

          The decrease in the earnings per share was anticipated as the Company’s largest subsidiary, the Connecticut Water Company – a regulated water utility, ended a 15-year period during which it had not sought rate relief. On July 18, 2006, the Company filed with the Connecticut Department of Public Utility Control (DPUC) a request to raise revenues by $14.6 million or about 30 percent. Eric W. Thornburg, President and Chief Executive Officer, stated “We are seeking recovery of water system infrastructure investments of over $130 million and operating expense increases, such as electricity and health insurance, since our last rate filing in 1991.” A decision on the rate request is expected by January 2007.

          Mr. Thornburg also noted that New England Water Utility Services, Inc. (NEWUS), an unregulated Company subsidiary, has been selected through a competitive process by the University of Connecticut to manage and operate the water systems at the University’s flagship campus in Storrs, Connecticut for two years with an option for two additional one-year terms. If extended for both additional terms, the value of the total agreement will exceed $1.75 million. NEWUS has been operating the University Water systems on an interim basis since last November. Mr. Thornburg noted, “We are proud that the University recognized the quality of work and our commitment to meeting its needs. This agreement provides NEWUS with a high profile platform to build our brand and expand our services to new clients.”

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Connecticut Water Service, Inc. is the largest, domestic-based, investor-owned water utility in New England. It provides water to over 82,000 customers in 41 towns in Connecticut, as well as providing water-related services under contract to 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 and amount of rate relief, including the rate relief sought in the company's rate case application to the DPUC filed on July 18, 2006, 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.

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News media contact:

Daniel J. Meaney
Director of Corporate Communications
Connecticut Water Service, Inc.
93 West Main Street, Clinton, CT 06413
Tel 800-428-3985, ext. 3016 or dmeaney@ctwater.com