Birmingham-Utilities, Inc. Signs Contracts With DEP.

Business Editors

ANSONIA, Conn.--(BUSINESS WIRE)--May 8, 2001

BIRMINGHAM UTILITIES, INC. announced today that it has signed two contracts with the State of Connecticut, Department of Environmental Protection, ("DEP"), for the sale of approximately 892 acres of excess water company lands located in the City of Ansonia and the Town of Seymour for approximately $9,800,000.

John S. Tomac, the Company's President said, "this transaction continues our strategy to dispose of excess water company land in a prudent fashion, in which the customers, shareholders, and community benefit." He noted the proceeds from these sales will be reinvested into Birmingham's capital program to replace aging infrastructure.

The properties include 570 acres of land known formerly as the Quillinan Reservoir and its surrounding watershed. Of the 570 acres, 472 are located in Ansonia and the remaining 98 acres are in Seymour. The sales price for this parcel is $5,500,000 of which the City of Ansonia will contribute $250,000. The Department of Public Utility Control ("DPUC") approved the sale of this property in March of 2000 for a $6,050,000 sales price. Tomac noted, however, the Company will have to file a request with the DPUC to reopen for the limited purpose of approving a reduced sales price, and allowing direct transfer to the State. Tomac further noted the reduced sales price would have only a minor impact on the net gain, as additional tax credits are available due to the reduced sales price coupled with a reduced service fee.

The other properties consist of two parcels totaling 322 acres located in Seymour. The sales price for these parcels will be $4,338,000. These parcels were previously under contract with Toll Bros., Inc. Mr. Tomac stated the DEP sent the Company a letter stating its exercise of DEP's statutory right to purchase this property subsequent to the November 2000 DPUC decision approving the sale to Toll Bros., Inc. The DEP matched the Toll Bros.' price. Since the original approval gave Birmingham the authority to sell to Toll Bros., the DPUC must now approve the sale to the DEP. The Company expects such an approval will be forthcoming.

Birmingham Utilities, Inc., over the last few years, has sold approximately 950 acres of excess water company land. With the exception of a high school in Ansonia and a middle school in Seymour, built on some of those properties, all remaining acreage remain in their natural state. With the addition of this acreage, Birmingham will have sold approximately 1900 acres since 1996, with over 96% remaining in its natural state.

Birmingham Utilities has been extremely careful in its disposition of its excess properties. We have chosen to work with our surrounding communities including local officials to ensure that our strategy is acceptable to our constituents.

Birmingham Utilities is an investor-owned water company that serves primarily the cities of Ansonia and Derby, and whose common stock is traded on the AMEX under the symbol "BIW".