Connecticut Water Service, Inc. Reports Second Quarter Earnings

Clinton, Connecticut, August 7, 2009 – Connecticut Water Service, Inc. (NASDAQ GS: CTWS) announced that unusually wet weather in the second quarter led to a 6 percent decline in water production compared to the same period in 2008 and adversely impacted the Company’s revenues and net income in the second quarter of 2009. In 2009, Connecticut had its 13th wettest June in the past 115 years with 6.28 inches of rain, according to the Northeast Climate Center (NCC). June 2009 rainfall was approximately 23 percent higher than 2008 when 5.11 inches of rain fell in the state. In addition, according to the NCC, the average temperature in June was the coolest experienced in Connecticut in 24 years.

According to Eric W. Thornburg, Chairman, President and Chief Executive Officer, the Company’s fundamentals are strong and its leaders are attentive to the short-term while remaining focused on the long-term. Mr. Thornburg stated: “We have taken measures to mitigate as much as possible the weather’s temporary impact on our business that has continued through July, but we remain mindful of our strategy to grow earnings in the long-term by making smart business decisions, honoring our workforce, and providing world class service to our customers. We believe these principles will be critical to our success, including the outcome in our next rate case, which we are considering filing in early 2010.”

The Company reported net income for the three months ending June 30, 2009, of $2.3 million, or $0.27 per basic common share, on operating revenues of $15.1 million. During the same period in 2008, the Company reported net income of nearly $3.0 million, or $0.35 per basic common share, on operating revenues of $16.0 million. The decrease in revenues is attributable to reduced water consumption caused by the unusually wet weather conditions in late spring and early summer.

The unusually wet weather had an adverse impact on the Company’s core business segment, Water Activities, which had net income of $2.0 million, or $0.24 per basic common share. In the second quarter of 2008, net income from the segment totaled $2.7 million, or $0.33 per basic common share.

Operating expenses, made up of costs related to operating and maintenance (O&M), depreciation and taxes, declined about one-half of one percent to $12.1 million for the second quarter when compared to $12.2 million for the same period in 2008. The decline was due to decreases in income tax and depreciation expenses that more than offset increases in O&M for the quarter. The Company also benefited from a 9.4 percent reduction in interest and debt expense, which dropped to $1.1 million in the second quarter of 2009, compared to $1.2 million in the same period of 2008.

The Company saw improved performance from its Services and Rentals segment in the second quarter of 2009. During the period, the segment contributed $0.03 per basic common share, which is an increase of $0.01 over the second quarter of 2008.

In the first six months of 2009, net income totaled $3.4 million, or $0.40 per basic common share, on operating revenues of $28.5 million. In 2008, the Company reported net income of $4.6 million, or $0.55 per basic common share, on operating revenues of $29.6 million for the same six month period. Net income in the Water Activities segment for the first six months of 2009 was $2.9 million, or $0.35 per basic common share, compared to net income of $4.3 million, or $0.51 per basic common share, in the same period of 2008. Operating expenses in the first six months of 2009 increased 1.6 percent, or $367,000, to $23.4 million over the same period of 2008, when expenses of $23.1 million were reported.

Connecticut Water Service, Inc. is New England’s largest locally-based, investor-owned water company. Through its wholly-owned public water utility subsidiary, The Connecticut Water Company, the Company provides drinking water to over 88,000 customers, or about 300,000 people, in 54 towns throughout Connecticut.

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Connecticut Water Service, Inc. & Subsidiaries

Condensed Consolidated Statements of Income (unaudited)

Condensed Consolidated Balance Sheets (unaudited)

This news release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the Company’s results of operation, financial position and long-term strategy. These forward-looking statements are based on current information and expectations, and are subject to risks and uncertainties discussed in our filings with the Securities and Exchange Commission, which could cause the Company’s actual results to differ materially from expected results. We undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.