Aquarion Reports 27 Percent Increase in First Quarter Earnings.

BRIDGEPORT, Conn.--(BUSINESS WIRE)--April 21, 1998--Aquarion Company (NYSE:WTR) today reported net income for the three months ended March 31, 1998, of $3,035,000, or $0.41 per share, an increase of 27 percent over net income of $2,388,000, or $0.34 per share, in the same period of 1997.

Richard K. Schmidt, president and chief executive officer, said the increase in earnings reflect land sales and improved results from Aquarion's utility operations.

Consolidated revenues were $25,383,000 in the 1998 first quarter, up 8.5 percent from $23,389,000 in the same period a year ago. The 1998 increase in revenues is due to surplus land sales and an increase in BHC's Eastern Division water rates, which became effective August 1, 1997. This increase in water service rates was partially offset by the reduction in rates associated with the elimination of the Connecticut gross earnings tax.

Operating expenses of $17,333,000 increased 4.6 percent from $16,569,000 in the first quarter of 1997, primarily due to increased expenses associated with land sales, and increased operating and depreciation expenses from the operation of the Warner Water Treatment Plant, partially offset by the elimination of the Connecticut gross earnings tax.

The net after-tax gain from the sale of BHC's surplus, off-watershed land was $263,000, or $0.03 per share, for the first quarter of 1998. BHC did not sell any surplus land in the same period of 1997.

On March 16, 1998, BHC's Western Division filed an application with the Department of Public Utility Control to reopen its 1995 rate case, requesting a $620,000 or 4.1 percent increase in water service rates. BHC is seeking the increase to include in the company's rate base approximately $3 million of the cost of restoring the Laurel Reservoir Dam in Stamford and to reflect an increase in purchased water costs resulting from higher rates for service from its Southwest Regional Pipeline. It is anticipated the new rates, if approved, will become effective in the second quarter of 1998.

Aquarion Company is engaged primarily in the supply and protection of public water. Its BHC and Sea Cliff Water Company subsidiaries together are among the 10 largest investor- owned water utilities in the U.S. and serve a population of 500,000 in 31 Connecticut and Long Island, N.Y. communities. Other businesses include real estate through the sale of surplus water company land, timber processing and contract management of municipal water systems. -0-

                   Aquarion Company and Subsidiaries
              Condensed Consolidated Statements of Income
                    Three Months Ended March 31,
                   (In thousands, except share data)

                                Unaudited

                                             1998        1997

Operating revenues                        $ 25,383      $23,389

Operating expenses                          17,333       16,569

Operating income                             8,050        6,820

Other income and (expense):
   Interest expense                         (2,686)      (2,876)
   Allowance for funds used
    during construction                         47          237
   Other, net                                  (48)         106

Income before income taxes                   5,363        4,287
Income taxes                                 2,328        1,899

Net Income                                 $ 3,035       $2,388

Basic earnings per share(a)                $  0.41       $ 0.34

Weighted average common shares
 outstanding                             7,366,282    7,036,623

Diluted earnings per share(a)              $  0.40       $ 0.33

Weighted average common shares
 outstanding                             7,544,496    7,131,191

(a) Quarterly earnings per share are based on weighted average shares
    outstanding during each quarter and the sum of the quarters may
    not equal annual earnings per share.

CONTACT: Aquarion Company, Bridgeport

Larry L. Bingaman

[phone]

OR

Adrienne C. Vaughan

[phone]