CLINTON, Conn., Oct. 10, 2006 (PRIMEZONE) -- Connecticut Water Service Inc. (Nasdaq:CTWS) announced that its regulated public water utility subsidiary, The Connecticut Water Company, has completed the acquisition of the South Coventry Water Supply Company in Coventry, Connecticut in a deal valued at approximately $240,000. Connecticut Water acquired South Coventry Water for approximately $93,000 and assumed approximately $147,000 in debt.
The South Coventry Water Supply Company serves approximately 125 homes in Coventry and is located less than one mile from three other water systems owned and operated by The Connecticut Water Company. The South Coventry system is expected to grow by more than 30 percent with the development of a planned housing complex that will add 36 new customers.
Eric W. Thornburg, Connecticut Water's President and CEO, says the South Coventry deal fits the company's growth strategy. Mr. Thornburg states, "We will continue to pursue acquisitions that can be tucked-in to our operations using existing personnel and resources while providing our new customers with world class service." He adds, "Aside from acquisitions, the other elements of our growth plan include expansion of existing water systems and growing our unregulated businesses through contract operations and services related to our core business."
Since 1995, Connecticut Water has acquired twelve private water companies and two municipal water systems in the state of Connecticut. These acquisitions currently account for more than 15 percent of Connecticut Water's regulated water utility customer base.
Connecticut Water's unregulated subsidiary, New England Water Utility Services, Inc., recently signed a two-year agreement to manage and operate the water systems at University of Connecticut's Storrs Campus. The agreement has an option for two one-year renewals, and the agreement is expected to generate more than $1.75 million if it is extended for both additional terms. The UConn agreement provides the Company with a high-profile platform from which to build its brand and expand its services in an area around the university that is largely not served by public water utilities.
Connecticut Water Service, Inc. is the largest, domestic-based, investor-owned water utility in New England. It provides water to over 82,000 customers in 41 towns in Connecticut, as well as providing water-related services under contract to municipalities and companies.
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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 and amount of rate relief, including the rate relief sought in the company's rate case application to the DPUC filed on July 18, 2006, 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, and 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 contracts. We undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.