Connecticut Water Files with Town of Windsor Locks Notice of Intent to Abandon Former Water Supply.

Opens Process for Disposition of Land to Town of Windsor Locks 

WINDSOR LOCKS, Conn. -- The Connecticut Water Company provided Windsor Locks First Selectman Steven Wawruck a notice of its intent to abandon its Windsor Locks public drinking water supply wellfield. The Company had previously indicated in its September 2006 Water Supply Plan that it would no longer need that wellfield for water supply purposes and would likely dispose of the property.

Upon receipt of the Water Supply Plan, town officials immediately began discussions with the Company and State Representative Peggy Sayers to determine how the Town might be able to secure this 225 acre parcel for open space. "It has long been the desire of the Town that this property, which is one of the few remaining parcels of open space in the Town of Windsor Locks, be secured by the Town if the Company ever decided to dispose of it," explained First Selectman Steven Wawruck. He continued, "Working with Rep. Sayers and the Connecticut Water Company, we believe there is an opportunity to obtain this valuable property for open space for the Town."

Rep. Sayers is working with the Town to facilitate the filing of an application with the State Department of Environmental Protection (DEP) for an Open Space and Watershed Land Acquisition Grant. She has also taken a leadership role at the legislature on a bill this session that would extend the tax credits for corporations, such as Connecticut Water, who donate or provide discount sales of property for open space purposes. Rep. Sayers explained, "By making a change to the existing tax credit, it may make it possible for Town to obtain the property from Connecticut Water at a significant discount, without impacting its customers and ratepayers."

The DEP Open Space and Watershed Land Acquisition Grant Program provides financial assistance for up to 65% of the value of the property to municipalities and nonprofit land conservation organizations to acquire land for open space. Rep. Sayers further explained, "I am proud to be part of this effort, which truly is a win-win for all parties, by obtaining some grant funds and working in partnership with the Town and the water company we can preserve this valuable parcel as open space for current and future generations of Windsor Locks at little cost to the Town."

The water company has expressed its interest in working with the Town to see that the property is maintained as open space. Maureen Westbrook, its Vice President of Customer and Regulatory Affairs explained, "Connecticut Water knows that the community values this property and considers it integral to the character of their town. We are eager to work with state and local officials to see that the land can be preserved as open space." She explained there is a lengthy regulatory process that requires approval of various state agencies before the Company can abandon the source or dispose of the land. She noted, "It is great that Rep. Sayers and First Selectman Wawruck have already committed themselves to this and begun working to secure the sources of funding now so they can be in a position to complete a transaction once the approvals are obtained."

Connecticut Water was the first water company to utilize the tax credit which allows for a credit for a donation or discount sale of lands for open space when it was adopted in 2000. The water company has since donated or provided through discount sales to various municipalities in the state for open space nearly 650 acres of land with a value of nearly $6.4 million.

This news release may contain certain forward-looking statements regarding the Company's results of operation 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.

Regulated water companies, including Connecticut Water, 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 to be sought from, and granted by, the DPUC, when necessary, and numerous factors over which we have little or no control, such as the quantity of rainfall and temperature, customer demand and related conservation efforts, 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. From time to time, the Company may acquire other regulated and/or unregulated water companies. Profitability is often dependent on identification and consummation of business acquisitions and the profitable integration of these acquired businesses into the Company's operations. 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.

Connecticut Water Company serves nearly 300,000 people in 54 towns in Connecticut. The towns served include: Ashford, Avon, Beacon Falls, Bethany, Bolton, Brooklyn, Burlington, Canton, Chester, Clinton, Colchester, Columbia, Coventry, Deep River, East Granby, East Haddam, East Hampton, East Windsor, Ellington, Enfield, Essex, Farmington, Griswold, Guilford, Hebron, Killingly, Lebanon, Madison, Manchester, Marlborough, Middlebury, Naugatuck, Old Lyme, Old Saybrook, Plainfield, Plymouth, Portland, Prospect, Somers, South Windsor, Stafford, Stonington, Storrs, Suffield, Thomaston, Thompson, Tolland, Vernon, Voluntown, Waterbury, Westbrook, Willington, Windsor Locks and Woodstock.