DPUC Denies BHC, Village Water Company Merger; Agency Invites BHC to Reapply at Later Date.

BRIDGEPORT, CT--(BUSINESS WIRE)--November 3, 1999--

The Connecticut Department of Public Utility Control (DPUC) announced today that it has denied without prejudice BHC Company's (BHC) request to purchase the Village Water Company of Simsbury, Connecticut. The decision confirms an October 15 draft decision on the merger application. BHC is the major water utility subsidiary of Aquarion Company (NYSE:WTR).

DPUC Commissioners John W. Betkowski, III, Jack R. Goldberg and Linda Kelly Arnold noted they could not rule properly on the merger until they have resolved two other issues currently before them. Those issues involve an outstanding Village Water Company land sale application and Aquarion's pending merger with Kelda Group, plc of Leeds, England. The DPUC decision notes that BHC may reapply for the Village Water acquisition after the aforementioned issues are resolved.

Aquarion President and Chief Executive Officer Richard K. Schmidt said, "While we understand the reasons for the DPUC's denial of our proposal to acquire the Village Water Company at this time, we are not discouraged by it. We remain committed to the acquisition and plan to reapply after the agency renders a decision on the Village Water Company land sale and our merger with Kelda Group."

In March 1999, BHC and Village Water Company signed a letter of intent that calls for BHC to pay Village Water Company shareholders $150 per share. They signed a definitive merger agreement in June. The value of the transaction is $6.5 million in cash, which includes payment for outstanding debentures that may be converted to common shares prior to closing.

Aquarion Company's principal business is public water supply. Through its BHC and Sea Cliff Water Company subsidiaries, it is one of the 10 largest investor-owned water utilities in the U.S. and serves a population of more than 500,000 in 30 Connecticut and Long Island, NY communities. Other businesses include real estate through the sale of surplus water company land, and contract management of municipal water systems.

Aquarion also owns a small timber processing company.

Note to Reporters and Editors: For more information on Aquarion Company and its subsidiaries, please contact us on the Internet at www.aquarion.com or www.bhcco.com.