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CONNECTICUT WATER SERVICE, INC.
AND SUBSIDIARIES
 EMPLOYEES CODE OF CONDUCT   Employee Handbook
 IndexOur Principals
    
    1Government & Regulatory Agencies who oversee our business
    
    2Shareholders who own our business
    
    3Customers who receive our service
    
    4Business Practices
    
    5Confidential Information
    
    5Conflict of Interest
    
    5-7Prohibition of Gifts to Public Officials and State Employees
    
    7Campaign Contributions
    
    8Code of Conduct Violations and Audit Misconduct Reporting
    
    9Q&A
    
    10Appendix
    
    A-1




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CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
 EMPLOYEES CODE OF CONDUCT
  Our Principles
     -1-




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Government and Regulatory Agencies  who oversee our business
 Regulatory Compliance
  Regulatory Agency Investigations, Inspections, and Requests for
Information
 
    
    conceal, destroy, or alter Company documents
    
    lie or make misleading statements to a government investigator
    
    attempt to cause another employee to fail to provide accurate information
  -2-




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Shareholders  who own our business
  
    
    The release of information to our investors is handled by
Corporate Communications. If you receive an inquiry from the
media, immediately refer the caller to Corporate Communications,
the Chief Financial Officer, or the Manager of Public Affairs.
    
    The issuance of financial information is based on a system of
internal controls and a procedure for timely disclosure. The
Company has established a system of internal controls to safeguard
Company assets against loss and unauthorized use or disposition
and to assure that financial statements are prepared, reviewed,
and disclosed to ensure the quality and accuracy of the
information presented. While the President/CEO and the Vice
President/CFO certify the quality and accuracy of our financial
statements quarterly and annually, it is every employees
responsibility to abide by these internal controls. Such controls,
in the form of procedures, are communicated to employees, and if
you have a question on any procedure within your department,
please discuss it with your supervisor or a Company officer.
    
    The Company has established and communicated a policy that forbids
employees from disclosing material, non-public information. If
you possess material information that the Company has not yet
disclosed publicly, you may not buy or sell CTWS securities or
disclose such information to anyone who is not an officer of the
Company. (See Appendix A for full policy.)
 -3-




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Customers  who receive our service
  
    
    Demonstrate that the Company is committed to
providing a high quality of service in an efficient manner;
    
    Apply our customer policies, practices and programs in
a fair, equitable and nondiscriminatory manner;
    
    Respond to customer inquiries and requests in a
prompt, courteous and accurate manner;
    
    Avoid any action that will endanger the health or
safety of the public, and promptly correcting and reporting any
unsafe condition or hazard.
 -4-




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Business Practices
 Confidential Information
 Conflict of Interest
 
    
    Personal business relationships Personal business
relationships should not influence the decisions you make for the
Company. You should disclose to the Companys Ethics Officer any
financial interest that you or your immediate family have in
Connecticut Waters suppliers, customers, or competitors. Nominal
ownership of common stock of a publicly owned corporation will not of
itself be considered a conflict and need not be disclosed.
    
    Organizational relationships If you or an immediate
member of your family serves as a director, officer, or consultant
with any company that does business with us, you should disclose
these obligations in writing to the Companys Ethics Officer even if
you receive no money for your services.
 -5-




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
    
    Outside employment Any outside employment or business activity must
not conflict with the employees ability to perform his or her work at the
Company. Such employment or            business activity should not utilize
Company time or property or create a conflict of interest. Do not accept
outside employment with our competitors, suppliers, or any business that
poses a conflict of interest with Connecticut Water.
    
    Employees should never accept money,
gifts, or servicesthatwould appear to undermine or influence good
business judgmentor accept anything that could be construed as an
attempt to influence the performance of duties or to favor a
supplier, customer, or competitor. The following examples and
guidelines are provided:Money:No employee may solicit or accept any cash, tip or
compensation in conjunction with services provided on behalf of the
Company.Gifts:On occasion, employees may accept gifts such as novelties or
promotional items of a nominal value if:
 
    
    the gift complies with the givers companys rules
    
    the gift was not solicited
    
    open disclosure of the gift would not embarrass the Company or the people involved
 Entertainment :
  -6-




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Political Process
 
    
    To avoid any suggestion of an indirect corporate
contribution to a candidate, an employee may not work on behalf of
candidates campaign during working hours or at any time use Company
facilities for that purpose.
    
    The Company will not reimburse employees for
financial or personal time contributed to political campaigns.
    
    An employee accepting public office or
serving on a public body acts as an individual, not as a
representative of the Company.
    
    Employees must exercise good judgment in
relationships with government officials and employees. It is
important that we not place these officials in compromising
positions. Even the appearance of compromise would reflect adversely
upon the official and the Company.
 Prohibition of Gifts to Public Officials
or State Employees
  before
 -7-




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Campaign Contributions
  Accordingly, all Company officers, directors, managerial personnel MUST verify
with Daniel J. Meaney, Corporate Secretary, 860-669-8630, ext. 3016, their own
status and the status of the Companys contracts under the new legislation,
before they (or their spouses or dependent children) make or solicit campaign
contributions to or for candidates for election to any of the Constitutional
State Offices or to the General Assembly.
 -8-




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Code of Conduct Violations and
Company Audit Misconduct
   
 Prohibition Against Retaliation
 -9-




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Q.
    
    A customer of the Company, asked me to look up the name and address of another customer in
the Companys customer database. Should I carry out this simple request from a customer?A.
    
    No. Access to customer information is for purposes specific to our business only.Q.
    
    Can I share customer information with friends I work with here at the company?A.
    
    No. Only share information that is critical to the task. For example, if you need to send an
e-mail containing customer information to another employee, only include the information
necessary to complete the request.Q.
    
    I heard in advance of a public announcement that the Companys earnings are going up/down
and it would be a great time to buy/sell the stock. I dont own very much, but I let my
mother know so she doesnt miss out when others will be making money.A.
    
    You have violated the
law by tipping material, non-public information. You, your mother, and the other employee
who shared such advance information may be subject to legal penalties.Q.
    
    When I was visiting an internet chat room, I noticed a former employee was criticizing
the Company and I responded, setting facts straight, because it was unfair to the Company.A.
    
    It is inappropriate for employees, other than those authorized, to respond to media
comments/information about the company, however well-intentioned.Q.
    
    Id like to run for selectman or serve on a commission in my hometown which happens to be
customer of the company. Im a manager and view community service as good citizenship.A.
    
    It would be a conflict of interest for an employee to be a manager at the company and have a
managerial capacity at a town with whom the company does business.Q.
    
    May I accept a gift from a vendor? Can I give a vendor a gift?A.
    
    In general, employees are generally prohibited from offering/giving that is connected to a
specific transaction to any current or potential customer/vendor. However, gifts and
gratuities (trinkets, meals, business courtesies) that are not connected to a transaction or
proceeding are acceptable, if they are customary, do not exceed a certain value, do not
violate the vendors policy, or do not violate any laws or regulations.Q.
    
    I have a request for a check for a political campaign but I feel uncomfortable
questioning it especially when it was authorized by the appropriate manager. Who
can I ask to be sure?A.
    
    If in doubt about a request that seems to violate the Code of
Conduct, please contact Dan Meaney, Corporate Secretary, ext. 3016 or
dmeaney@ctwater.com.
You can do so confidentially and anonymously.
 -10-




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Non-Public Information and Insider Trading
  employees who possess material non-public information
should not engage in any transactions in CTWS securities until the third business day after such
information has been released
 Anyone who purchases or sells securities on the basis of material inside information, or who
discloses material inside information to someone else who purchases or sells securities on the
basis of such information, may be subject to serious consequences including civil penalties of up
to three times the profit gained or loss avoided, criminal fines of up to $1,000,000, and
imprisonment for a term of up to 10 years. In addition, the Company may impose sanctions, including
dismissal for cause, for failure to comply with the Companys policy.
  
    
    change in revenues or earnings of the Company
    
    change in the value or composition of any of the Companys assets
    
    change in operations, such as a significant interruption or curtailment of service
    
    contemplated acquisition of another company or its securities or disposition of an existing business or
significant assets
    
    offer by another company to acquire the Company
    
    contemplated issuance of securities or stock split/stock dividend
    
    significant drinking water violations
    
    adverse actions by the DPUC, DPH or DEP
    
    commencement of a new business, negotiation of a major contract or loss
of the same
    
    change in management or dividend policy
    
    initiation or termination of litigation