Connecticut Water Service, Inc., Reports Significant Earnings Increase
from its Water Activities Segment

Clinton, Connecticut, May 7, 2007 – Connecticut Water Service, Inc. (NASDAQ GS: CTWS) announced that for the first quarter of 2007, income from continuing operations for its Water Activities segment totaled $1.3 million, or $0.16 per basic common share. Compared to the same period of 2006, this is an increase of approximately $700,000, or $0.08 per basic common share. The improvement reflects the effect of a 22.3% rate increase approved by the Connecticut Department of Public Utility Control in January. The Water Activities business, the largest of the Company’s three segments, provided 93% of total revenues in the first quarter of 2007.

The earnings gain in the Water Activities segment was offset by a decline in the Real Estate segment. For the first quarter, Real Estate income declined to $41,000 (or less than a $0.01 per common share) from $924,000 ($0.11 per basic common share) in the first quarter of 2006. The reason for the decline is that income for the 2006 first quarter had benefited from a large land sale to the Town of Barnstable, Massachusetts. The sale generated income of approximately $900,000.

There was a slight decrease in earnings in the Service and Rentals segment in the first quarter of 2007. Income was $142,000 ($0.02 per basic common share), which is a decrease of $25,000, or less than a penny per share, compared to the first quarter of 2006.
For the Company overall, Net Income from Continuing Operations in the first quarter of 2007 was $1.5 million, or $0.18 per basic common share. This is a decrease of $222,000, or $0.03 per basic common share, from the same period of 2006.

Eric Thornburg, President and Chief Executive Officer, stated: “I am pleased by the renewed strength we see in the Water Activities segment following our much-needed rate increase. The Services and Rentals and Real Estate Transaction segments are important contributors to our earnings and will supplement the Water Activities segment. However, our team will continue to focus on the water segment, which is the core of our business.”

Connecticut Water Service, Inc. is New England’s largest locally based investor-owned water company. Through its wholly owned public water utility subsidiary, The Connecticut Water Company, it provides drinking water to over 83,000 customers, or 286,000 people in 41 towns throughout Connecticut.

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This news 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.

The Connecticut Water Company 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.

Connecticut Water Service, Inc. & Subsidiaries