Connecticut Water Receives Approval on Its Request to Reduce Customer Rates and Implement Revenue Adjustment Mechanism

Connecticut Water Receives Approval on Its Request to Reduce Customer Rates
and Implement Revenue Adjustment Mechanism

Company to Return Benefit of Anticipated IRS Tax Law Clarification to

CLINTON, Conn., Sept. 3, 2013 (GLOBE NEWSWIRE) -- The Connecticut Water
Company, a regulated public utility subsidiary of Connecticut Water Service,
Inc. (Nasdaq:CTWS), today announced that the Public Utilities Regulatory
Authority (PURA) has approved the Company's request that will result in lower
customer rates starting April 1, 2014.

The Company's proposal to change rates was supported by a Settlement Agreement
(Agreement) between Connecticut Water, the Office of Consumer Counsel, and the
Attorney General. The plan calls for the Company to return to customers the
benefits of a recent tax law clarification by the Internal Revenue Service
which is estimated to result in a federal tax refund for the Company of
approximately $10 million for tax years 2010 through 2012.

In addition to the rate reduction, Connecticut Water offered through the
Agreement not to seek a general rate increase until 2015 at the earliest and
to delay its planned 2014 Water Infrastructure and Conservation Adjustment
(WICA) filing by at least six months. The Agreement provides greater financial
stability for the Company and allows for continued investment in the
infrastructure and the vital water resources that serve customers and

Eric W. Thornburg, President and CEO of Connecticut Water, noted the Agreement
demonstrates the commitment of the Company and its employees to the families,
businesses and communities that we serve. He stated, "We saw a unique
opportunity to reduce rates and delay our next rate case filing, while
continuing to invest in our infrastructure. Our team vigorously pursued it,
and I am proud of what we have achieved for our customers and the Company."

Mr. Thornburg also commented on the thorough and speedy decision rendered by
PURA. He noted, "I am grateful to PURA for its efforts to honor our request
for a decision by the end of August. This will allow the Company to file its
federal tax return by the September 16, 2013 deadline and be eligible for the
federal tax refund this year so that wecan quickly return the benefits to our

Tax Law Clarification

A recent clarification in the Federal IRS Code allows utilities to take an
immediate deduction of qualified capital spending that otherwise would have
been deducted in small increments over many years. The Repair Tax Deduction
Credit (RTDC) has provided Connecticut Water, which has made significant
capital expenditures in recent years for its infrastructure replacement
program, the opportunity to file for a refund of federal tax payments going
back to the year 2010.

Delaying Rate Case and WICA Filings

As part of the Agreement, there will be no rate increase from a general rate
case before October 2015. The Company's last general rate increase took
effect in July 2010, so with the inclusion of the stay out provision, the
Company will not have implemented a general rate increase for customers for
more than five years. 

In addition, the WICA surcharge in effect on October 2013 will be folded into
the Company's base rates at the end of 2013, which will allow Connecticut
Water to continue to use the WICA program to replace aging, undersized
infrastructure to enhance water system reliability, public fire protection,
and conservation of water, power and treatment chemicals.

The WICA application that was planned for January 2014, will be delayed until
July 2014, and will not appear on customers' bills until October 2014. The
Company will, however, continue to invest in WICA eligible pipe replacement at
current levels during that time.

Revenue Adjustment Mechanism

In conjunction with the planned rate reduction in April 2014, the Company will
establish a Revenue Adjustment Mechanism (RAM) as authorized by a recently
enacted Connecticut law.The RAM removes the financial disincentive for water
utilities to develop and implement effective water conservation programs and
allows water utilities to collect the full amount of revenues PURA approved at
the time of the Company's last rate general rate proceeding.Implementing the
RAM provides greater financial stability for the Company, allowing it to
continue to make investments and provide quality service to customers and
communities during the 'stay out' period established by the Settlement

Net effect of the Agreement

Mr. Thornburg noted that there is information required to implement the RTDC,
WICA, and RAM that will not be final until after the close of this calendar
year. He states, "It will be early 2014 before we can finalize the exact rate
reduction that will go into effect in April 2014. However, we are confident
that as a result of the changes authorized by PURA's approval of the Agreement
our customers will see a net rate reduction on their bills compared to what
they are paying today.And while they are paying less, we will continue to
invest in the replacement of aging or undersized infrastructure at current
levels to enhance service and reliability."

About Connecticut Water

Connecticut Water (or The Connecticut Water Company) is a regulated public
water utility subsidiary of Connecticut Water Service, Inc. (Nasdaq:CTWS).
Connecticut Water serves about 90,000 customers, or 300,000 people, in the
state of Connecticut.Other CTWS subsidiaries include The Maine Water Company
and the Biddeford & Saco Water Company, both of which are located in Maine.

This news release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, including, among others,
our long-term strategy and expectations, the status of our acquisition
program, the impact of our acquisitions on our financial results, the impact
of current and projected rate requests and the impact of our capital program
on our environmental compliance. There are important factors that could cause
actual results to differ materially from those expressed or implied by such
forward-looking statements including: general economic business conditions,
unfavorable weather conditions, the success of certain cost containment
initiatives, changes in regulations or regulatory treatment, availability and
the cost of capital, the success of growth initiatives and other factors
discussed in our filings with the Securities and Exchange Commission. We
undertake no obligation to update or revise forward-looking statements,
whether as a result of new information, future events, or otherwise.

CONTACT: News media contact:
         Daniel J Meaney, APR,
         Director of Corporate Communications
         Connecticut Water Service, Inc.
         93 West Main Street, Clinton, CT 06413-1600
         (860) 664-6016

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