''Connecticut Water Subsidiary Sells 109 Acres of Land to the Town of Barnstable in Bargain Sale''.

CLINTON, Conn. -- Connecticut Water Service Inc. (NASDAQ:CTWS) announced today that the sale of 109 acres of undeveloped land to the Town of Barnstable has been completed by, BARLACO, a Massachusetts subsidiary. The town paid $1 million for the land, minus January real estate taxes and recording fees.

According to Marshall T. Chiaraluce, Connecticut Water's Chairman, this transaction is considered a bargain land sale because the sale price is less than the appraised value. Mr. Chiaraluce states, "As result of the bargain sale, the Company will have a charitable contribution deduction that can be applied to its federal tax liabilities over five years. We estimate that this charitable contribution will reduce our federal tax liabilities by approximately $950,000 over a five-year deduction period."

The terms of the land sale were negotiated last year as part of Purchase and Sale Agreement between Connecticut Water and the town for the sale of the assets of the Barnstable Water Company. Connecticut Water sold the assets of the Barnstable Water Company to the town last May in a $10 million cash transaction.

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.