Connecticut Water Service, Inc. Raises Its Dividend and Reports an Increase in Net Income for Second Quarter 2005.

CLINTON, Conn. -- Connecticut Water Service, Inc. (NASDAQ: CTWS), New England's largest domestic based investor owned company, serving over 80,000 customers in 41 towns in Connecticut, announced that its Board of Directors approved an increase in the quarterly common stock dividend of $0.0025 a share, to $0.2125 a share. The effective record date of the increase is September 1, 2005 and the payable date is September 15, 2005.

Marshall T. Chiaraluce, the Company's Chairman, President and Chief Executive Officer, stated, "We are very pleased to be able to increase our dividend for the 36th consecutive year. These consecutive increases reflect the strength of our financials and our optimism for continued growth in our core businesses."

Dividends were also declared on the Company's preferred stock as follows:

--Preferred A (not publicly traded), quarterly dividend of $0.20 per share, record date is October 3, 2005, and payable October 17, 2005.

--Preferred 90 (NASDAQ: CTWSP), quarterly dividend of $0.225 per share, record date is October 14, 2005, and payable October 28, 2005.

Additionally, the Company reported net income of $4,078,000, or $0.50 per basic share, for the three months ended June 30, 2005, up from $2,126,000, or $0.26 per basic share, for the same period one year ago. The increase is primarily due to a $2,794,000 gain, net of taxes, on the sale of assets of the Barnstable Water Company. Included in the increase to net income were increases in the earnings of the Company's core "Water Activities," which includes the gain on the sale of the assets of Barnstable Water Company, and "Services and Rentals" business segments of $1,911,000 and $41,000, respectively. There were no activities in the "Real Estate" segment in either the second quarter of 2005 or 2004.

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, including maintaining the contract between the town of Barnstable and BWC. 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

Condensed Consolidated Statements of Income (unaudited)

                       Three Months      Six Months      Twelve Months
(In thousands              Ended            Ended            Ended
 except per share         June 30,         June 30,         June 30,
 amounts)              2005    2004     2005    2004     2005    2004
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Operating Revenues   $11,409 $11,959  $22,831 $22,878  $48,446 $48,251
Utility Operating
 Income               $4,591  $2,763   $6,829  $4,669  $12,811 $12,136
Gain on Property
 Transactions, Net      $ --    $ --     $261    $706     $761    $792
Non-Water Sales
 Earnings (Services
 and Rentals)           $281    $240     $521    $387   $1,039    $828
Net Income
 Applicable to
 Common Shareholders  $4,078  $2,126   $6,054  $4,101  $11,309  $9,941
Basic Earnings Per
 Average Common
 Share                 $0.50   $0.26    $0.75   $0.51    $1.41   $1.24
Diluted Earnings
 Per Average Common
 Share                 $0.50   $0.26    $0.75   $0.51    $1.40   $1.24
Basic Weighted
 Average Common
 Shares Outstanding    8,078   7,992    8,063   7,983    8,039   7,996
Diluted Weighted
 Average Common
 Shares Outstanding    8,118   8,031    8,102   8,027    8,066   8,043
Book Value Per
 Share                $10.83  $10.61   $10.83  $10.61   $10.83  $10.61


   Condensed Consolidated Balance Sheets (unaudited)

(In thousands)                                    June 30,   June 30,
                                                    2005       2004
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ASSETS
Net Utility Plant                                 $238,833   $235,104
Current Assets                                      11,312     11,813
Other Assets                                        40,284     32,412
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Total Assets                                      $290,429   $279,329
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CAPITALIZATION AND LIABILITIES
Shareholders' Equity                               $91,893    $85,170
Preferred Stock                                        847        847
Long-Term Debt                                      64,615     66,534
Current Liabilities                                 13,232     11,471
Other Liabilities and Deferred Credits             119,842    115,307
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Total Capitalization and Liabilities              $290,429   $279,329
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