| x | Annual      Report pursuant to section 13 or 15(d) of the Securities Exchange Act of      1934 for the fiscal year ended December 31, 2008      or |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------|

| o | Transition      report pursuant to section 13 or 15(d) of the Securities Exchange Act of      1934 for the transition period      from                              to                      |   |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

| Connecticut(State      or other jurisdiction ofincorporation      or organization) | 06-0739839(I.R.S.      Employer Identification No.) |
|------------------------------------------------------------------------------------|-----------------------------------------------------|
|                                                                               |                                                |
| 93      West Main Street, Clinton, CT(Address      of principal executive office)  | 06413(Zip      Code)                                |

| Title      of each ClassCommon      Stock, without par value | Name      of each exchange on which registeredThe      Nasdaq Stock Market, Inc. |
|--------------------------------------------------------------|----------------------------------------------------------------------------------|

| Large      Accelerated Filer o | Accelerated      Filer x         |
|--------------------------------|----------------------------------|
| Non-Accelerated      Filer o   | Smaller      Reporting Company o |

| Document                                                                                                                   |   | Part      of Form 10-K Into Which Document is Incorporated |
|----------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------|
|                                                                                                                       |   |                                                       |
| Definitive      Proxy Statement, dated March 31, 2009, for Annual Meeting of Shareholders      to be held on May 13, 2009. |   | Part      III                                              |

----

Table of Contents

|          |   | INDEX TO ANNUAL REPORT ON FORM 10-K Year Ended December 31,      2008                                                        |   |        |
|---------------|--------|------------------------------------------------------------------------------------------------------------------------------|--------|-------------|
| Part      I   |   |                                                                                                                         |   | Page Number |
| Item 1.       |   | Business                                                                                                                     |   | 4           |
| Item 1A.      |   | Risk Factors                                                                                                                 |   | 9           |
| Item 1B.      |   | Unresolved Staff    Comments                                                                                                 |   | 13          |
| Item 2.       |   | Properties                                                                                                                   |   | 13          |
| Item 3.       |   | Legal Proceedings                                                                                                            |   | 14          |
| Item 4.       |   | Submissions of Matters to a Vote of Security      Holders                                                                    |   | 14          |
|          |   |                                                                                                                         |   |        |
| Part      II  |   |                                                                                                                         |   |        |
| Item 5.       |   | Market for the Company’s Common      Stock, Related Stockholder Matters and Issuer Purchases of Equity      Securities |   | 15          |
| Item 6.       |   | Selected Financial      Data                                                                                                 |   | 16          |
| Item 7.       |   | Management’s Discussion and Analysis of Financial Condition      and Results of Operations                             |   | 17          |
| Item 7A.      |   | Quantitative and Qualitative Disclosure about Market      Risk                                                               |   | 30          |
| Item 8.       |   | Financial Statements and Supplementary      Data                                                                             |   | 30          |
| Item 9.       |   | Changes in and Disagreements with      Accountants on Accounting and Financial Disclosures                                   |   | 30          |
| Item 9A.      |   | Controls and Procedures                                                                                                      |   | 30          |
| Item 9B.      |   | Other Information                                                                                                            |   | 30          |
|          |   |                                                                                                                         |   |        |
| Part      III |   |                                                                                                                         |   |        |
| Item 10.      |   | Directors, Executive Officers and Corporate      Governance                                                                  |   | 31          |
| Item 11.      |   | Executive Compensation                                                                                                       |   | 31          |
| Item 12.      |   | Security Ownership of Certain Beneficial Owners      and Management and Related Stockholder Matters                          |   | 31          |
| Item 13.      |   | Certain Relationships and Related Transactions, and      Director Independence                                               |   | 31          |
| Item 14.      |   | Principal Accountant Fees and      Services                                                                                  |   | 31          |
|          |   |                                                                                                                         |   |        |
| Part      IV  |   |                                                                                                                         |   |        |
| Item 15.      |   | Exhibits and Financial Statement      Schedules                                                                              |   | 32          |
|          |   | Signatures                                                                                                                   |   | 33          |

----

Table of Contents

ITEM 1.  BUSINESS

| ·   | Employee      Code of Conduct |
|--------------------|-------------------------------|

| ·   | Audit      Committee Charter |
|--------------------|------------------------------|

| ·   | Board      of Directors Code of Conduct |
|--------------------|-----------------------------------------|

| ·   | Compensation      Committee Charter |
|--------------------|-------------------------------------|

| ·   | Corporate      Governance Committee Charter |
|--------------------|---------------------------------------------|

| ·   | Amended      and Restated Bylaws of Connecticut Water Service,  Inc. |
|--------------------|----------------------------------------------------------------------|

| ·   | 2008      Annual Meeting of Shareholders (Annual Report and  Proxy) |
|--------------------|---------------------------------------------------------------------|

----

Table of Contents

----

Table of Contents

----

Table of Contents

|                                                       |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Customers:                                                 |   |   |   |   |   |   |   |   |   |
| Residential                                                |   |   | 78,254 |   |   |   | 75,579 |   |   |   | 74,253 |   |
| Commercial                                                 |   |   | 5,646  |   |   |   | 5,532  |   |   |   | 5,485 |   |
| Industrial                                                 |   |   | 425    |   |   |   | 426    |   |   |   | 429 |   |
| Public      Authority                                      |   |   | 606    |   |   |   | 602    |   |   |   | 587 |   |
| Fire      Protection                                       |   |   | 1,648  |   |   |   | 1,599  |   |   |   | 1,562 |   |
| Other      (including non-metered accounts)                |   |   | 782    |   |   |   | 680    |   |   |   | 931 |   |
| Total                                                      |   |   | 87,361 |   |   |   | 84,418 |   |   |   | 83,247 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Water Revenues(in      thousands):                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                                |   | $      | 37,963 |   |   | $      | 38,354 |   |   | $ | 29,067 |   |
| Commercial                                                 |   |   | 7,150  |   |   |   | 6,762  |   |   |   | 5,652 |   |
| Industrial                                                 |   |   | 1,822  |   |   |   | 1,764  |   |   |   | 1,589 |   |
| Public      Authority                                      |   |   | 2,027  |   |   |   | 1,924  |   |   |   | 1,507 |   |
| Fire      Protection                                       |   |   | 10,606 |   |   |   | 9,482  |   |   |   | 8,708 |   |
| Other      (including non-metered accounts)                |   |   | 1,702  |   |   |   | 740    |   |   |   | 422 |   |
| Total                                                      |   | $      | 61,270 |   |   | $      | 59,026 |   |   | $ | 46,945 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Customer Water      Consumption(millions of      gallons): |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                                |   |   | 4,954  |   |   |   | 5,186  |   |   |   | 4,933 |   |
| Commercial                                                 |   |   | 1,180  |   |   |   | 1,259  |   |   |   | 1,198 |   |
| Industrial                                                 |   |   | 396    |   |   |   | 423    |   |   |   | 424 |   |
| Public      Authority                                      |   |   | 365    |   |   |   | 389    |   |   |   | 363 |   |
| Total                                                      |   |   | 6,895  |   |   |   | 7,257  |   |   |   | 6,918 |   |

----

Table of Contents

|   |   | Income      (Loss) from Real Estate Transactions from Continuing      Operations |      |
|--------|--------|----------------------------------------------------------------------------------|-----------|
|   |   | Regulated                                                                        |      |   | Unregulated |   |   | Total |   |
|   |   |                                                                             |      |   |   |   |   |   |   |
| 2008   |   | $                                                                                | (160,000  | ) |   | $  | -- |   |   | $ | (160,000 | ) |
| 2007   |   | $                                                                                | 199,000   |   |   | $ | (32,000 | ) |   | $ | 167,000 |   |
| 2006   |   | $                                                                                | 1,083,000 |   |   | $ | 980,000 |   |   | $ | 2,063,000 |   |

----

Table of Contents

ITEM 1A.  RISK FACTORS

----

Table of Contents

----

Table of Contents

| ·   | dilutive      issuances of our equity securities; |
|--------------------|---------------------------------------------------|

| ·   | incurrence      of debt and contingent liabilities; |
|--------------------|-----------------------------------------------------|

| ·   | failure      to have effective internal control over financial    reporting; |
|--------------------|------------------------------------------------------------------------------|

| ·   | fluctuations      in quarterly results; and |
|--------------------|---------------------------------------------|

| ·   | other      acquisition-related expenses. |
|--------------------|------------------------------------------|

----

Table of Contents

| ·   | the      number of years to depreciate certainassets; |
|--------------------|-------------------------------------------------------|

| ·   | amounts      to set aside for uncollectible accounts receivable, inventory obsolesces      and uninsured losses; |
|--------------------|------------------------------------------------------------------------------------------------------------------|

| ·   | our      legal exposure and the appropriate accrual for claims, including medical      and workers’ compensation claims; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| ·   | future      costs for pensions and other post-retirement benefits,  and; |
|--------------------|--------------------------------------------------------------------------|

| ·   | possible      tax allowances. |
|--------------------|-------------------------------|

----

Table of Contents

ITEM 1B.  UNRESOLVED STAFFCOMMENTS

ITEM 2.  PROPERTIES

----

Table of Contents

| System                       |   | Estimated      Available Supply(million      gallons per day) |   |
|------------------------------|--------|---------------------------------------------------------------|--------|
| Chester      System          |   |                                                          | 1.69   |   |
| Collinsville      System     |   |                                                          | 0.65   |   |
| Danielson      System        |   |                                                          | 3.76   |   |
| Gallup      System           |   |                                                          | 0.60   |   |
| Guilford      System         |   |                                                          | 10.31  |   |
| Naugatuck      System        |   |                                                          | 6.91   |   |
| Northern      Western System |   |                                                          | 16.37  |   |
| Plainfield      System       |   |                                                          | 1.01   |   |
| Somers      System           |   |                                                          | 0.28   |   |
| Stafford      System         |   |                                                          | 1.00   |   |
| Terryville      System       |   |                                                          | 0.94   |   |
| Thomaston      System        |   |                                                          | 0.73   |   |
| Thompson      System         |   |                                                          | 0.29   |   |
| Unionville      System       |   |                                                          | 3.88   |   |
| Total                        |   |                                                          | 48.42  |   |

ITEM 3.  LEGAL PROCEEDINGS

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OFSECURITY HOLDERS

----

Table of Contents

ITEM 5.  MARKET FOR THE COMPANY’S COMMONSTOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIES

|                |   | Price  |   |   | Dividends |   |
|---------------------|--------|--------|--------|--------|-----------|--------|
| Period              |   | High   |   |   | Low       |   |   | Paid |   |
| 2008                |   |   |   |   |      |   |   |   |   |
| First      Quarter  |   | $      | 25.48  |   |      | $      | 23.00 |   |   | $ | .2175 |   |
| Second      Quarter |   |   | 24.98  |   |      |   | 21.82 |   |   |   | .2175 |   |
| Third      Quarter  |   |   | 28.95  |   |      |   | 22.28 |   |   |   | .2225 |   |
| Fourth      Quarter |   |   | 28.71  |   |      |   | 19.26 |   |   |   | .2225 |   |
|                |   |   |   |   |      |   |   |   |   |   |   |   |
| 2007                |   |   |   |   |      |   |   |   |   |   |   |   |
| First      Quarter  |   | $      | 25.09  |   |      | $      | 22.52 |   |   | $ | .2150 |   |
| Second      Quarter |   |   | 25.00  |   |      |   | 23.62 |   |   |   | .2150 |   |
| Third      Quarter  |   |   | 25.61  |   |      |   | 23.10 |   |   |   | .2175 |   |
| Fourth      Quarter |   |   | 25.15  |   |      |   | 22.40 |   |   |   | .2175 |   |

|                                                 |   | 2003   |    |   | 2004   |   |   | 2005   |   |   | 2006   |   |   | 2007   |   |   | 2008   |   |
|------------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Connecticut      Water Service, Inc.                 |   |   | $100.00 |   |   |   | $98.82 |   |   |   | $94.53 |   |   |   | $91.04 |   |   |   | $97.77 |   |   |   | $101.43 |   |
| Standard      & Poor’s 500 Index           |   |   | 100.00  |   |   |   | 110.88 |   |   |   | 116.33 |   |   |   | 134.70 |   |   |   | 142.10 |   |   |   | 89.53 |   |
| Standard      & Poor’s 500 Utilities Index |   |   | 100.00  |   |   |   | 124.28 |   |   |   | 145.21 |   |   |   | 175.69 |   |   |   | 209.73 |   |   |   | 148.95 |   |

----

Table of Contents

| ITEM 6. SELECTED FINANCIAL      INFORMATION                     |   |   |      |   |   |   |      |   |   |   |      |   |   |
|----------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
|                                                                 |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |
| SUPPLEMENTAL INFORMATION (Unaudited)                                 |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |
|                                                                 |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |
| SELECTED      FINANCIAL DATA                                         |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |
|                                                                 |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |
| Years      Ended December 31, (thousands of dollars except per share |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |
| amounts      and where otherwise indicated)                          |   | 2008   |      |   | 2007   |   |      | 2006   |   |   | 2005      |   |   | 2004 |   |
| CONSOLIDATED      STATEMENTS OF INCOME                               |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |
| Continuing      Operations                                           |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |
| Operating      Revenues                                              |   | $      | 61,270    |   |   | $      | 59,026    |   |   | $      | 46,945    |   |   | $ | 47,453 |   |   | $ | 46,008 |   |
| Operating      Expenses                                              |   | $      | 47,874    |   |   | $      | 46,324    |   |   | $      | 39,962    |   |   | $ | 37,486 |   |   | $ | 35,487 |   |
| Other      Utility Income, Net of Taxes                              |   | $      | 579       |   |   | $      | 552       |   |   | $      | 542       |   |   | $ | 571 |   |   | $ | 520 |   |
| Total      Utility Operating Income                                  |   | $      | 13,975    |   |   | $      | 13,254    |   |   | $      | 7,525     |   |   | $ | 10,538 |   |   | $ | 11,041 |   |
| Interest      and Debt Expense                                       |   | $      | 5,198     |   |   | $      | 4,411     |   |   | $      | 4,461     |   |   | $ | 3,583 |   |   | $ | 3,451 |   |
| Income      from Continuing Operations                               |   | $      | 9,424     |   |   | $      | 8,781     |   |   | $      | 6,708     |   |   | $ | 7,166 |   |   | $ | 9,163 |   |
| Cash      Common Stock Dividends Paid                                |   | $      | 7,373     |   |   | $      | 7,146     |   |   | $      | 7,014     |   |   | $ | 6,773 |   |   | $ | 6,641 |   |
| Dividend      Payout Ratio from Continuing Operations                |   |   | 78        | %      |   |   | 81        | %      |   |   | 105       | %      |   |   | 95 | % |   |   | 72 | % |
| Weighted      Average Common Shares Outstanding                      |   |   | 8,377,428 |   |   |   | 8,270,494 |   |   |   | 8,187,801 |   |   |   | 8,094,346 |   |   |   | 7,999,318 |   |
| Basic      Earnings Per Common Share from Continuing Operations      |   | $      | 1.12      |   |   | $      | 1.06      |   |   | $      | 0.81      |   |   | $ | 0.89 |   |   | $ | 1.15 |   |
| Number      of Shares Outstanding at Year End                        |   |   | 8,463,269 |   |   |   | 8,376,842 |   |   |   | 8,270,394 |   |   |   | 8,169,627 |   |   |   | 8,035,199 |   |
| ROE      on Year End Common Equity                                   |   |   | 9.1       | %      |   |   | 8.8       | %      |   |   | 7.0       | %      |   |   | 7.6 | % |   |   | 10.4 | % |
| Declared      Common Dividends Per Share                             |   | $      | 0.880     |   |   | $      | 0.865     |   |   | $      | 0.855     |   |   | $ | 0.845 |   |   | $ | 0.835 |   |
|                                                                 |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |
|                                                                 |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |
| CONSOLIDATED      BALANCE SHEET                                      |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Common      Stockholders' Equity                                     |   | $      | 103,476   |   |   | $      | 100,098   |   |   | $      | 95,938    |   |   | $ | 94,076 |   |   | $ | 87,865 |   |
| Long-Term      Debt (Consolidated, Excluding Current Maturities)     |   |   | 92,227    |   |   |   | 92,285    |   |   |   | 77,347    |   |   |   | 77,404 |   |   |   | 66,399 |   |
| Preferred      Stock                                                 |   |   | 772       |   |   |   | 772       |   |   |   | 772       |   |   |   | 847 |   |   |   | 847 |   |
| Total      Capitalization                                            |   | $      | 196,475   |   |   | $      | 193,155   |   |   | $      | 174,057   |   |   | $ | 172,327 |   |   | $ | 155,111 |   |
| Stockholders'      Equity (Includes Preferred Stock)                 |   |   | 53        | %      |   |   | 52        | %      |   |   | 56        | %      |   |   | 55 | % |   |   | 57 | % |
| Long-Term      Debt                                                  |   |   | 47        | %      |   |   | 48        | %      |   |   | 44        | %      |   |   | 45 | % |   |   | 43 | % |
| Net      Utility Plant                                               |   | $      | 299,233   |   |   | $      | 277,662   |   |   | $      | 263,187   |   |   | $ | 247,703 |   |   | $ | 241,776 |   |
| Total      Assets                                                    |   | $      | 372,431   |   |   | $      | 360,813   |   |   | $      | 328,140   |   |   | $ | 306,035 |   |   | $ | 290,940 |   |
| Book      Value - Per Common Share                                   |   | $      | 12.23     |   |   | $      | 11.95     |   |   | $      | 11.60     |   |   | $ | 11.52 |   |   | $ | 10.94 |   |
|                                                                 |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |
| OPERATING      REVENUES BY                                           |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |
| REVENUE      CLASS                                                   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Residential                                                          |   | $      | 37,963    |   |   | $      | 38,354    |   |   | $      | 29,067    |   |   | $ | 29,980 |   |   | $ | 28,974 |   |
| Commercial                                                           |   |   | 7,150     |   |   |   | 6,762     |   |   |   | 5,652     |   |   |   | 5,619 |   |   |   | 5,479 |   |
| Industrial                                                           |   |   | 1,822     |   |   |   | 1,764     |   |   |   | 1,589     |   |   |   | 1,538 |   |   |   | 1,635 |   |
| Public      Authority                                                |   |   | 2,027     |   |   |   | 1,924     |   |   |   | 1,507     |   |   |   | 1,625 |   |   |   | 1,430 |   |
| Fire      Protection                                                 |   |   | 10,606    |   |   |   | 9,482     |   |   |   | 8,708     |   |   |   | 8,267 |   |   |   | 8,087 |   |
| Other      (Including Non-Metered Accounts)                          |   |   | 1,702     |   |   |   | 740       |   |   |   | 422       |   |   |   | 424 |   |   |   | 403 |   |
| Total      Operating Revenues                                        |   | $      | 61,270    |   |   | $      | 59,026    |   |   | $      | 46,945    |   |   | $ | 47,453 |   |   | $ | 46,008 |   |
|                                                                 |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Number      of Customers (Average)                                   |   |   | 87,028    |   |   |   | 84,023    |   |   |   | 82,552    |   |   |   | 81,211 |   |   |   | 87,259 |   |
| Billed      Consumption (Millions of Gallons)                        |   |   | 6,895     |   |   |   | 7,257     |   |   |   | 6,918     |   |   |   | 7,276 |   |   |   | 7,801 |   |
| Number      of Employees                                             |   |   | 226       |   |   |   | 206       |   |   |   | 200       |   |   |   | 191 |   |   |   | 193 |   |

----

Table of Contents

ITEM 7.

----

Table of Contents

----

Table of Contents

|                                  |   | Increase      (Decrease) in Pension Expense |     |   | Increase      (Decrease) in Postretirement Expense |   |
|---------------------------------------|--------|---------------------------------------------|----------|--------|----------------------------------------------------|--------|
| 1%      Increase in the discount rate |   | $                                           | (317,000 | )      |                                               | $      | (210,000 | ) |
| 1%      Decrease in the discount rate |   | $                                           | 366,000  |   |                                               | $      | 254,000 |   |

----

Table of Contents

|                  |   | Gross      Construction Expenditures |       |   | Construction      Funded by Developers & Others |   |      | Construction      Funded by Company |   |
|-----------------------|--------|--------------------------------------|------------|--------|-----------------------------------------------------|--------|-----------|-------------------------------------|--------|
| 2008                  |   | $                                    | 20,737,000 |   |                                                | $      | 860,000   |                                |   | $ | 19,877,000 |   |
| 2007                  |   | $                                    | 19,841,000 |   |                                                | $      | 1,092,000 |                                |   | $ | 18,749,000 |   |
| 2006                  |   | $                                    | 17,792,000 |   |                                                | $      | 1,593,000 |                                |   | $ | 16,199,000 |   |
|                  |   |                                 |       |   |                                                |   |      |                                |   |   |   |   |
| 2009      (Projected) |   | $                                    | 31,400,000 |   |                                                | $      | 5,000,000 |                                |   | $ | 26,400,000 |   |

----

Table of Contents

----

Table of Contents

| Payments      due by Periods             |   |
|------------------------------------------|--------|
| (in      thousands)                      |   |
|   Contractual      Obligations |   |  Total |   |   | Less than 1      Year |   |   | Years      2      and 3 |   |   | Years      4      and 5 |   |   | More      than      5 years |   |
| Long-Term      Debt (LTD)                |   | $ | 92,235 |   |   | $ | 8 |   |   | $ | 16 |   |   | $ | 18 |   |   | $ | 92,193 |   |
| Interest      on LTD                     |   |   | 96,633 |   |   |   | 4,182 |   |   |   | 8,362 |   |   |   | 8,361 |   |   |   | 75,728 |   |
| Operating      Lease Obligations         |   |   | 731 |   |   |   | 309 |   |   |   | 347 |   |   |   | 75 |   |   |   | -- |   |
| Purchase      Obligations (1)(2)         |   |   | 100,006 |   |   |   | 1,192 |   |   |   | 2,103 |   |   |   | 2,180 |   |   |   | 94,531 |   |
| Long-Term      Compensation Agreement(3) |   |   | 47,735 |   |   |   | 4,461 |   |   |   | 6,685 |   |   |   | 6,690 |   |   |   | 29,899 |   |
| Total      (4)    (5)                    |   | $ | 337,340 |   |   | $ | 10,152 |   |   | $ | 17,513 |   |   | $ | 17,324 |   |   | $ | 292,351 |   |

----

Table of Contents

| Business      Segment     |   | 2008      Net Income (Loss) |      |   | 2007      Net Income |   |      | Increase      (Decrease) |   |
|---------------------------|--------|-----------------------------|-----------|--------|----------------------|--------|-----------|--------------------------|--------|
| Water      Activities     |   | $                           | 8,794,000 |   |                 | $      | 7,963,000 |                     |   | $ | 831,000 |   |
| Real      Estate          |   |                        | (160,000  | )      |                 |   | 167,000   |                     |   |   | (327,000 | ) |
| Services      and Rentals |   |                        | 790,000   |   |                 |   | 651,000   |                     |   |   | 139,000 |   |
| Total                     |   | $                           | 9,424,000 |   |                 | $      | 8,781,000 |                     |   | $ | 643,000 |   |

|                                          |   | 2008   |       |   | 2007   |   |       | Increase      (Decrease) |   |
|-----------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------------------------|--------|
| Operating      Revenues                       |   | $      | 61,270,000 |   |   | $      | 59,026,000 |                     |   | $ | 2,244,000 |   |
| Operation      and Maintenance                |   |   | 31,877,000 |   |   |   | 29,864,000 |                     |   |   | 2,013,000 |   |
| Depreciation                                  |   |   | 6,438,000  |   |   |   | 6,525,000  |                     |   |   | (87,000 | ) |
| Income      Taxes                             |   |   | 3,518,000  |   |   |   | 4,195,000  |                     |   |   | (677,000 | ) |
| Taxes      Other than Income Taxes            |   |   | 6,041,000  |   |   |   | 5,740,000  |                     |   |   | 301,000 |   |
| Other      Utility Income                     |   |   | 579,000    |   |   |   | 552,000    |                     |   |   | 27,000 |   |
| Other      (Deductions) Income                |   |   | (143,000   | )      |   |   | (972,000   | )                        |   |   | 829,000 |   |
| Interest      and Debt Expense (net of AFUDC) |   |   | 5,038,000  |   |   |   | 4,319,000  |                     |   |   | 719,000 |   |
| Total      Income from Water Activities       |   | $      | 8,794,000  |   |   | $      | 7,963,000  |                     |   | $ | 831,000 |   |

| -   | The      Eastern acquisition added approximately $1.7 million in new revenues from      both the additional customers served and the make whole payments received      from the RWA. |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | The      second phase of the 2006 rate case, which became effective April 1, 2008,      contributed approximately $2.0 million in additional revenues over 2007      levels. |
|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | The      weather impact was most notable in the Company’s northern service area,      which is the Company’s largest service area, where there were 96 days      during the period May 1, 2008 through October 31, 2008 with at least a      trace of rain, totaling 34.8 inches of rain in the aggregate, compared to      17.4 inches during the same period in 2007.  The change in      weather conditions between years resulted in an approximate $1.5 million      revenue disparity between years.  The impact of the unfavorable      weather can be seen in Operating Revenues from residential      customers.  Despite increasing the customer count in this class      of customer by over 2,600 additional customers (or 3.5%), consumption      decreased by approximately 232 million gallons (or -4.5%).  In      fact, despite a decrease in consumption across all customer classes, only      the residential class saw a decrease in Operating  Revenues. |
|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| Components      of O&M                 |   | 2008   |       |   | 2007   |   |       | Increase      (Decrease) |   |
|--------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------------------------|--------|
| Labor                                      |   | $      | 11,935,000 |   |   | $      | 10,842,000 |                     |   | $ | 1,093,000 |   |
| Medical      expense                       |   |   | 1,477,000  |   |   |   | 1,097,000  |                     |   |   | 380,000 |   |
| Water      treatment (including chemicals) |   |   | 2,051,000  |   |   |   | 1,754,000  |                     |   |   | 297,000 |   |
| Utility      costs                         |   |   | 3,534,000  |   |   |   | 3,282,000  |                     |   |   | 252,000 |   |
| Vehicle                                    |   |   | 1,442,000  |   |   |   | 1,214,000  |                     |   |   | 228,000 |   |
| Customer                                   |   |   | 826,000    |   |   |   | 709,000    |                     |   |   | 117,000 |   |
| Outside      services                      |   |   | 1,556,000  |   |   |   | 1,480,000  |                     |   |   | 76,000 |   |
| Other      employee benefit costs          |   |   | 269,000    |   |   |   | 206,000    |                     |   |   | 63,000 |   |
| Purchased      water                       |   |   | 993,000    |   |   |   | 1,291,000  |                     |   |   | (298,000 | ) |
| Pension      costs                         |   |   | 1,258,000  |   |   |   | 1,465,000  |                     |   |   | (207,000 | ) |
| Post-retirement      medical costs         |   |   | 1,565,000  |   |   |   | 1,759,000  |                     |   |   | (194,000 | ) |
| Other                                      |   |   | 4,971,000  |   |   |   | 4,765,000  |                     |   |   | 206,000 |   |
| Total      O&M Expense                 |   | $      | 31,877,000 |   |   | $      | 29,864,000 |                     |   | $ | 2,013,000 |   |

----

Table of Contents

----

Table of Contents

| Business      Segment                  |   | 2007      Net Income |      |   | 2006      Net Income |   |      | Increase      (Decrease) |   |
|----------------------------------------|--------|----------------------|-----------|--------|----------------------|--------|-----------|--------------------------|--------|
| Water      Activities                  |   | $                    | 7,963,000 |   |                 | $      | 4,130,000 |                     |   | $ | 3,833,000 |   |
| Real      Estate                       |   |                 | 167,000   |   |                 |   | 2,063,000 |                     |   |   | (1,896,000 | ) |
| Services      and Rentals Transactions |   |                 | 651,000   |   |                 |   | 515,000   |                     |   |   | 136,000 |   |
| Total                                  |   | $                    | 8,781,000 |   |                 | $      | 6,708,000 |                     |   | $ | 2,073,000 |   |

|                                          |   | 2007   |       |   | 2006   |   |       | Increase      (Decrease) |   |
|-----------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------------------------|--------|
| Operating      Revenues                       |   | $      | 59,026,000 |   |   | $      | 46,945,000 |                     |   | $ | 12,081,000 |   |
| Operation      and Maintenance                |   |   | 29,864,000 |   |   |   | 26,451,000 |                     |   |   | 3,413,000 |   |
| Depreciation                                  |   |   | 6,525,000  |   |   |   | 5,881,000  |                     |   |   | 644,000 |   |
| Income      Taxes                             |   |   | 4,195,000  |   |   |   | 2,055,000  |                     |   |   | 2,140,000 |   |
| Taxes      Other than Income Taxes            |   |   | 5,740,000  |   |   |   | 5,575,000  |                     |   |   | 165,000 |   |
| Other      Utility Income                     |   |   | 552,000    |   |   |   | 542,000    |                     |   |   | 10,000 |   |
| Other      (Deductions) Income                |   |   | (972,000   | )      |   |   | 608,000    |                     |   |   | (1,580,000 | ) |
| Interest      and Debt Expense (net of AFUDC) |   |   | 4,319,000  |   |   |   | 4,003,000  |                     |   |   | 316,000 |   |
| Total      Income from Water Activities       |   | $      | 7,963,000  |   |   | $      | 4,130,000  |                     |   | $ | 3,833,000 |   |

| -   | an      increase of $9,287,000, or 32.0%, in revenues from residential customers      in 2007, including $3,823,000 in deferred  revenues; |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| -   | a      $1,701,000, or 19.4%, increase in all other metered customers, including      commercial, industrial and public authority customers;  and |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | a      $1,092,000, or 12.0%, increase in non-metered revenues which was primarily      due to increased fire protection charges related to the expansion of our      water system which increased the number of fire hydrants and revenue      generating mains upon which these charges are  based. |
|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Components      of O&M           |   | 2007   |       |   | 2006   |   |       | Increase      (Decrease) |   |
|--------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------------------------|--------|
| Post-retirement      medical expense |   | $      | 1,759,000  |   |   | $      | 473,000    |                     |   | $ | 1,286,000 |   |
| Labor                                |   |   | 10,842,000 |   |   |   | 10,240,000 |                     |   |   | 602,000 |   |
| Outside      services                |   |   | 1,480,000  |   |   |   | 998,000    |                     |   |   | 482,000 |   |
| Purchased      water                 |   |   | 1,291,000  |   |   |   | 866,000    |                     |   |   | 425,000 |   |
| Utility      costs                   |   |   | 3,282,000  |   |   |   | 2,947,000  |                     |   |   | 335,000 |   |
| Vehicle                              |   |   | 1,214,000  |   |   |   | 942,000    |                     |   |   | 272,000 |   |
| Rate      case cost amortization     |   |   | 270,000    |   |   |   | 35,000     |                     |   |   | 235,000 |   |
| Maintenance                          |   |   | 1,632,000  |   |   |   | 1,526,000  |                     |   |   | 106,000 |   |
| Customer                             |   |   | 709,000    |   |   |   | 606,000    |                     |   |   | 103,000 |   |
| Other      employee benefit costs    |   |   | 2,768,000  |   |   |   | 3,697,000  |                     |   |   | (929,000 | ) |
| Other                                |   |   | 4,617,000  |   |   |   | 4,121,000  |                     |   |   | 496,000 |   |
| Total      O&M Expense           |   | $      | 29,864,000 |   |   | $      | 26,451,000 |                     |   | $ | 3,413,000 |   |

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

Table of Contents

ITEM 7A.

ITEM 8.  

ITEM 9.

ITEM 9A.

ITEM 9B.

----

Table of Contents

PART III

ITEM 10

| Name                     |   | Age      in 2009* |   | Office                                                                     |   | Period      Held or Prior Position                                                                        |   | Term      of Office Expires |
|--------------------------|--------|-------------------|--------|----------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|--------|-----------------------------|
| E.      W. Thornburg     |   | 48                |   | Chairman,      President, and Chief Executive Officer                 |   | Held      position since March 2006                                                                  |   | 2009      Annual Meeting    |
| D.      C. Benoit        |   | 52                |   | Vice      President – Finance, Chief Financial Officer and Treasurer |   | Held      current position or other executive position with the Company since April      1996        |   | 2009      Annual Meeting    |
| T.      P. O’Neill |   | 54                |   | Vice      President – Service Delivery                          |   | Held      current position or other engineering position with the Company since      February 1980   |   | 2009      Annual Meeting    |
| M.      P. Westbrook     |   | 50                |   | Vice      President – Customer and Regulatory Affairs                |   | Held      current position or other management position with the Company since      September 1988   |   | 2009      Annual Meeting    |
| T.      R. Marston       |   | 56                |   | Vice      President – Business Development                           |   | Held      current position or other position with the Company since June      1974                   |   | 2009      Annual Meeting    |
| D.      J. Meaney        |   | 48                |   | Corporate      Secretary                                                   |   | Held      current position or other communications position with the Company since      August 1994  |   | 2009      Annual Meeting    |
| K.      A. Johnson       |   | 42                |   | Vice      President –  Human Resources                     |   | Held      current position or other human resources position with the Company since      May 2007         |   | 2009      Annual Meeting    |

ITEM 11. 

ITEM 12.

ITEM 13.

ITEM 14.

----

Table of Contents

ITEM 15.

| (a)    |   | 1.     |   | Financial      Statements:                                                                                                                                                                                                                                                                                            |   |   |
|--------|--------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|   |   |   |   | The      report of independent registered public accounting firm and the Company’s      Consolidated Financial Statements listed in the Index to Consolidated      Financial Statements on page F-1 hereof are filed as part of this report,      commencing on page F-2                                        |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                  |   | Page   |
|   |   |   |   | Index      to Consolidated Financial Statements and Schedule                                                                                                                                                                                                                                                          |   | F-1    |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                  |   |   |
|   |   |   |   | Report      of Independent Registered Pubic Accounting Firm                                                                                                                                                                                                                                                           |   | F-2    |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                  |   |   |
|   |   |   |   | Consolidated      Statements of Income for the years ended December 31, 2008, 2007 and      2006                                                                                                                                                                                                                      |   | F-3    |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                  |   |   |
|   |   |   |   | Consolidated      Statements of Comprehensive Income for the years ended December 31, 2008,      2007 and 2006                                                                                                                                                                                                        |   | F-3    |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                  |   |   |
|   |   |   |   | Consolidated      Balance Sheets at December 31, 2008 and 2007                                                                                                                                                                                                                                                        |   | F-4    |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                  |   |   |
|   |   |   |   | Consolidated      Statements of Cash Flows for the years ended December 31, 2008, 2007 and      2006                                                                                                                                                                                                                  |   | F-5    |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                  |   |   |
|   |   |   |   | Notes      to Consolidated Financial Statements                                                                                                                                                                                                                                                                       |   | F-6    |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                  |   |   |
|   |   | 2.     |   | Financial      Statement Schedule:                                                                                                                                                                                                                                                                                    |   |   |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                  |   |   |
|   |   |   |   | The      following schedule of the Company is included on the attached page as      indicated                                                                                                                                                                                                                         |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                  |   |   |
|   |   |   |   | Schedule      II Valuation and Qualifying Accounts and Reserves for the years ended      December 31, 2008, 2007 and 2006                                                                                                                                                                                             |   | S-1    |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                  |   |   |
|   |   |   |   | All      other schedules provided for in the applicable regulations of the      Securities and Exchange Commission have been omitted because of the      absence of conditions under which they are required or because the      required information is set forth in the financial statements or notes      thereto. |   |   |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                  |   |   |
| (b)    |   |   |   | Exhibits                                                                                                                                                                                                                                                                                                              |   |   |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                  |   |   |
|   |   |   |   | Exhibits      for Connecticut Water Service Inc, are in the Index to      Exhibits                                                                                                                                                                                                                                    |   | E-1    |
|   |   |   |   |                                                                                                                                                                                                                                                                                                                  |   |   |
|   |   |   |   | Exhibits      heretofore filed with the Securities and Exchange Commission as indicated      below are incorporated herein by reference and made a part hereof as if      filed herewith.  Exhibits marked by asterisk (*) are being filed      herewith.                                                   |   |   |

----

Table of Contents

|                                                                                                           |   | Page   |
|----------------------------------------------------------------------------------------------------------------|--------|--------|
| Index      to Consolidated Financial Statements and Schedule                                                   |   | F-1    |
|                                                                                                           |   |   |
| Report      of Independent Registered Pubic Accounting Firm                                                    |   | F-2    |
|                                                                                                           |   |   |
| Consolidated      Statements of Income for the years ended December 31, 2008, 2007 and      2006               |   | F-3    |
|                                                                                                           |   |   |
| Consolidated      Statements of Comprehensive Income for the years ended December 31, 2008,      2007 and 2006 |   | F-3    |
|                                                                                                           |   |   |
| Consolidated      Balance Sheets at December 31, 2008 and 2007                                                 |   | F-4    |
|                                                                                                           |   |   |
| Consolidated      Statements of Cash Flows for the years ended December 31, 2008, 2007 and      2006           |   | F-5    |
|                                                                                                           |   |   |
| Notes      to Consolidated Financial Statements                                                                |   | F-6    |
|                                                                                                           |   |   |
| Schedule      II – Valuation Accounts                                                                    |   | S-1    |

----

Table of Contents

----

Table of Contents

|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| CONSOLIDATED STATEMENTS OF INCOME                                                                                           |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |
| For      the Years Ended December 31, (in thousands, except per share      data)                                            |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |
| Operating      Revenues                                                                                                     |   | $      | 61,270 |   |   | $      | 59,026 |   |   | $      | 46,945 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      Expenses                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|    Operation      and Maintenance                                                                            |   |   | 31,877 |   |   |   | 29,864 |   |   |   | 26,451 |   |
|    Depreciation                                                                                              |   |   | 6,438  |   |   |   | 6,525  |   |   |   | 5,881 |   |
|    Income      Taxes                                                                                         |   |   | 3,518  |   |   |   | 4,195  |   |   |   | 2,055 |   |
|    Taxes      Other Than Income Taxes                                                                        |   |   | 6,041  |   |   |   | 5,740  |   |   |   | 5,575 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|        Total      Operating Expenses                                                     |   |   | 47,874 |   |   |   | 46,324 |   |   |   | 39,962 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Operating Revenues                                                                                                 |   |   | 13,396 |   |   |   | 12,702 |   |   |   | 6,983 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Utility Income, Net of Taxes                                                                                     |   |   | 579    |   |   |   | 552    |   |   |   | 542 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Utility Operating Income                                                                                         |   |   | 13,975 |   |   |   | 13,254 |   |   |   | 7,525 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Income (Deductions), Net of Taxes                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|    Gain      (Loss) on Real Estate Transactions                                                              |   |   | (160   | )      |   |   | 167    |   |   |   | 2,063 |   |
|    Non-Water      Sales Earnings                                                                             |   |   | 790    |   |   |   | 651    |   |   |   | 515 |   |
|    Allowance      for Funds Used During Construction                                                         |   |   | 160    |   |   |   | 92     |   |   |   | 458 |   |
|    Other                                                                                                     |   |   | (143   | )      |   |   | (972   | )      |   |   | 608 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|        Total      Other Income (Deductions), Net of Taxes                                |   |   | 647    |   |   |   | (62    | )      |   |   | 3,644 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      and Debt Expenses                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
|    Interest      on Long-Term Debt                                                                           |   |   | 4,241  |   |   |   | 3,500  |   |   |   | 3,526 |   |
|    Other      Interest Charges                                                                               |   |   | 560    |   |   |   | 537    |   |   |   | 514 |   |
|    Amortization      of Debt Expense                                                                         |   |   | 397    |   |   |   | 374    |   |   |   | 421 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|        Total      Interest and Debt Expenses                                             |   |   | 5,198  |   |   |   | 4,411  |   |   |   | 4,461 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      from Continuing Operations                                                                                      |   |   | 9,424  |   |   |   | 8,781  |   |   |   | 6,708 |   |
| Discontinued      Operations, Net of Tax of $(244) in 2006                                                                  |   |   | --     |   |   |   | --     |   |   |   | 243 |   |
| Net      Income                                                                                                             |   |   | 9,424  |   |   |   | 8,781  |   |   |   | 6,951 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred      Stock Dividend Requirement                                                                                   |   |   | 38     |   |   |   | 38     |   |   |   | 38 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Net Income Applicable to Common Stock                                                                            |   | $      | 9,386  |   |   | $      | 8,743  |   |   | $      | 6,913 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      Average Common Shares Outstanding:                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
|    Basic                                                                                                     |   |   | 8,377  |   |   |   | 8,270  |   |   |   | 8,188 |   |
|    Diluted                                                                                                   |   |   | 8,430  |   |   |   | 8,333  |   |   |   | 8,237 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      Per Common Share:                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
|    Basic      - Continuing Operations                                                                        |   | $      | 1.12   |   |   | $      | 1.06   |   |   | $      | 0.81 |   |
|    Basic      - Discontinued Operations                                                                      |   |   | --     |   |   |   | --     |   |   |   | 0.03 |   |
|    Basic      - Net Income Applicable to Common Stock                                                        |   | $      | 1.12   |   |   | $      | 1.06   |   |   | $      | 0.84 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|    Diluted      - Continuing Operations                                                                      |   | $      | 1.11   |   |   | $      | 1.05   |   |   | $      | 0.81 |   |
|    Diluted      - Discontinued Operations                                                                    |   |   | --     |   |   |   | --     |   |   |   | 0.03 |   |
|    Diluted      - Net Income Applicable to Common Stock                                                      |   | $      | 1.11   |   |   | $      | 1.05   |   |   | $      | 0.84 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| CONSOLIDATED      STATEMENTS OF COMPREHENSIVE INCOME                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| For      the Years Ended December 31, (in thousands)                                                                        |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Income Applicable to Common Stock                                                                                  |   | $      | 9,386  |   |   | $      | 8,743  |   |   | $      | 6,913 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Comprehensive Income, net of tax                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|    Qualified      cash flow hedging instrument net of tax benefit                                            |   |   |   |   |   |   |   |   |   |   |   |   |
|       of      $(52), $(148), and $(22) in 2008, 2007, and 2006,    respectively               |   |   | (81    | )      |   |   | (222   | )      |   |   | (45 | ) |
|    Adjustment      to pension and post-retirement benefits other thanpension,                                |   |   |   |   |   |   |   |   |   |   |   |   |
|       net      of tax (benefit) expense of $(189) and $56 in 2008 and 2007,      respectively |   |   | (296   | )      |   |   | 143    |   |   |   | -- |   |
|    Unrealized      loss on investments, net of tax benefit of $(162)                                         |   |   | (254   | )      |   |   | --     |   |   |   | -- |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      Income                                                                                                   |   | $      | 8,755  |   |   | $      | 8,664  |   |   | $      | 6,868 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |

----

Table of Contents

|                                                                |                                                        |   |   |     |   |   |   |
|---------------------------------------------------------------------|-------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
| CONSOLIDATED      BALANCE SHEETS                                    |                                                        |   |   |     |   |   |   |
|                                                                |                                                        |   |   |     |   |   |   |
|                                                                |                                                        |   |   |     |   |   |   |
| December      31, (in thousands, except share amounts)              |                                                        |   | 2008   |     |   | 2007   |   |
|                                                                |                                                        |   |   |     |   |   |   |
| ASSETS                                                              |                                                        |   |   |     |   |   |   |
| Utility      Plant                                                  |                                                        |   | $      | 410,471  |   |   | $      | 384,421 |   |
| Construction      Work in Progress                                  |                                                        |   |   | 4,577    |   |   |   | 1,407 |   |
|                                                                |                                                        |   |   | 415,048  |   |   |   | 385,828 |   |
| Accumulated      Provision for Depreciation                         |                                                        |   |   | (115,815 | )      |   |   | (108,166 | ) |
| Net      Utility Plant                                              |                                                        |   |   | 299,233  |   |   |   | 277,662 |   |
| Other      Property and Investments                                 |                                                        |   |   | 6,034    |   |   |   | 6,652 |   |
| Cash      and Cash Equivalents                                      |                                                        |   |   | 684      |   |   |   | 337 |   |
| Restricted      Cash                                                |                                                        |   |   | --       |   |   |   | 8,220 |   |
| Accounts      Receivable (Less Allowance, 2008 - $376; 2007 - $352) |                                                        |   |   | 6,653    |   |   |   | 6,507 |   |
| Accrued      Unbilled Revenues                                      |                                                        |   |   | 5,372    |   |   |   | 4,545 |   |
| Materials      and Supplies, at Average Cost                        |                                                        |   |   | 1,095    |   |   |   | 987 |   |
| Prepayments      and Other Current Assets                           |                                                        |   |   | 1,976    |   |   |   | 2,375 |   |
| Total      Current Assets                                           |                                                        |   |   | 15,780   |   |   |   | 22,971 |   |
| Unamortized      Debt Issuance Expense                              |                                                        |   |   | 7,318    |   |   |   | 7,685 |   |
| Unrecovered      Income Taxes                                       |                                                        |   |   | 22,856   |   |   |   | 30,278 |   |
| Pension      Benefits                                               |                                                        |   |   | 8,911    |   |   |   | -- |   |
| Post-Retirement      Benefits Other Than Pension                    |                                                        |   |   | 2,570    |   |   |   | 6,410 |   |
| Goodwill                                                            |                                                        |   |   | 3,608    |   |   |   | 3,608 |   |
| Deferred      Charges and Other Costs                               |                                                        |   |   | 6,121    |   |   |   | 5,547 |   |
| Total      Regulatory and Other Long-Term Assets                    |                                                        |   |   | 51,384   |   |   |   | 53,528 |   |
| Total      Assets                                                   |                                                        |   | $      | 372,431  |   |   | $      | 360,813 |   |
|                                                                |                                                        |   |   |     |   |   |   |   |   |
| CAPITALIZATION      AND LIABILITIES                                 |                                                        |   |   |     |   |   |   |   |   |
| Common      Stockholders' Equity:                                   |                                                        |   |   |     |   |   |   |   |   |
| Common      Stock Without Par Value:                                |                                                        |   |   |     |   |   |   |   |   |
| Authorized      - 25,000,000 Shares - Issued and Outstanding:       |                                                        |   |   |     |   |   |   |   |   |
|                                                                | 2008 - 8,463,269; 2007 - 8,376,842 |   |   | $        | 64,804 |   |   | $ | 62,808 |   |
| Retained      Earnings                                              |                                                        |   |   | 39,285   |   |   |   | 37,272 |   |
| Accumulated      Other Comprehensive Income                         |                                                        |   |   | (613     | )      |   |   | 18 |   |
| Common      Stockholders' Equity                                    |                                                        |   |   | 103,476  |   |   |   | 100,098 |   |
| Preferred      Stock                                                |                                                        |   |   | 772      |   |   |   | 772 |   |
| Long-Term      Debt                                                 |                                                        |   |   | 92,227   |   |   |   | 92,285 |   |
| Total      Capitalization                                           |                                                        |   |   | 196,475  |   |   |   | 193,155 |   |
| Interim      Bank Loans Payable                                     |                                                        |   |   | 12,074   |   |   |   | 6,459 |   |
| Current      Portion of Long-Term Debt                              |                                                        |   |   | 8        |   |   |   | 7 |   |
| Accounts      Payable and Accrued Expenses                          |                                                        |   |   | 5,700    |   |   |   | 5,984 |   |
| Accrued      Taxes                                                  |                                                        |   |   | --       |   |   |   | 1,316 |   |
| Accrued      Interest                                               |                                                        |   |   | 870      |   |   |   | 810 |   |
| Other      Current Liabilities                                      |                                                        |   |   | 418      |   |   |   | 337 |   |
| Total      Current Liabilities                                      |                                                        |   |   | 19,070   |   |   |   | 14,913 |   |
| Advances      for Construction                                      |                                                        |   |   | 38,928   |   |   |   | 34,583 |   |
| Contributions      in Aid of Construction                           |                                                        |   |   | 49,420   |   |   |   | 47,865 |   |
| Deferred      Federal and State Income Taxes                        |                                                        |   |   | 30,472   |   |   |   | 28,616 |   |
| Unfunded      Future Income Taxes                                   |                                                        |   |   | 18,128   |   |   |   | 25,404 |   |
| Long-Term      Compensation Arrangements                            |                                                        |   |   | 18,331   |   |   |   | 14,717 |   |
| Unamortized      Investment Tax Credits                             |                                                        |   |   | 1,497    |   |   |   | 1,560 |   |
| Other      Long-Term Liabilities                                    |                                                        |   |   | 110      |   |   |   |   |   |
| Commitments      and Contingencies                                  |                                                        |   |   |     |   |   |   |   |   |
| Total      Capitalization and Liabilities                           |                                                        |   | $      | 372,431  |   |   | $      | 360,813 |   |

----

Table of Contents

|                                                                                                                                                                                      |   |   |    |   |   |   |    |   |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|
| CONSOLIDATED      STATEMENTS OF CASH FLOWS                                                                                                                                                |   |   |    |   |   |   |    |   |   |   |
|                                                                                                                                                                                      |   |   |    |   |   |   |    |   |   |   |
| For      the Years Ended December 31,  (in thousands)                                                                                                                           |   | 2008   |    |   | 2007   |   |    | 2006   |   |
|                                                                                                                                                                                      |   |   |    |   |   |   |    |   |   |   |
| Operating      Activities:                                                                                                                                                                |   |   |    |   |   |   |    |   |   |   |
|   Net      Income                                                                                                                                                               |   | $      | 9,424   |   |   | $      | 8,781   |   |   | $      | 6,951 |   |
|                                                                                                                                                                                      |   |   |    |   |   |   |    |   |   |   |   |   |
|   Adjustments      to Reconcile Net Income to Net Cash                                                                                                                          |   |   |    |   |   |   |    |   |   |   |   |   |
|     Provided      by Operating Activities:                                                                                                                            |   |   |    |   |   |   |    |   |   |   |   |   |
|         Deferred      Revenues                                                                                                                    |   |   | (777    | )      |   |   | (3,823  | )      |   |   | -- |   |
|         Gain      on Sale of BARLACO Assets Sold                                                                                                  |   |   | --      |   |   |   | --      |   |   |   | (980 | ) |
|         Earnings      from Discontinued Operations                                                                                                |   |   | --      |   |   |   | --      |   |   |   | (243 | ) |
|         Allowance      for Funds Used During Construction                                                                                         |   |   | (123    | )      |   |   | (131    | )      |   |   | (491 | ) |
|         Depreciation      (including $642 in 2008, $338 in 2007,                                                                                  |   |   |    |   |   |   |    |   |   |   |   |   |
|             and      $396 in 2006 charged to other accounts)                                                                  |   |   | 7,080   |   |   |   | 7,173   |   |   |   | 6,277 |   |
|         Change      in Assets and Liabilities:                                                                                                    |   |   |    |   |   |   |    |   |   |   |   |   |
|             Decrease      (Increase) in Accounts Receivable and Accrued Unbilled      Revenues                                |   |   | (974    | )      |   |   | (1,513  | )      |   |   | 268 |   |
|             Decrease      (Increase) in Other Current Assets                                                                  |   |   | 204     |   |   |   | (129    | )      |   |   | (805 | ) |
|             (Increase)      Decrease in Other Non-Current Items, net                                                          |   |   | (146    | )      |   |   | 2,072   |   |   |   | (549 | ) |
|             (Decrease)      Increase in Accounts Payable, Accrued                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
|                  Expenses      and Other Current Liabilities                                         |   |   | (879    | )      |   |   | 1,258   |   |   |   | 690 |   |
|             Increase      (Decrease) in Deferred Income Taxes and                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
|                  Investment      Tax Credits, Net                                                    |   |   | 1,878   |   |   |   | 1,893   |   |   |   | (1,492 | ) |
|                Total      Adjustments                                                                          |   |   | 6,263   |   |   |   | 6,800   |   |   |   | 2,675 |   |
|                Net      Cash and Cash Equivalents Provided by ContinuingOperations                             |   |   | 15,687  |   |   |   | 15,581  |   |   |   | 9,626 |   |
|                Net      Cash and Cash Equivalents Provided by Discontinued    Operations                       |   |   | --      |   |   |   | --      |   |   |   | 243 |   |
|                Net      Cash and Cash Equivalents Provided by Operating Activities                             |   |   | 15,687  |   |   |   | 15,581  |   |   |   | 9,869 |   |
|                                                                                                                                                                                      |   |   |    |   |   |   |    |   |   |   |   |   |
| Investing      Activities:                                                                                                                                                                |   |   |    |   |   |   |    |   |   |   |   |   |
|     Company      Financed Additions to Utility Plant                                                                                                                  |   |   | (19,877 | )      |   |   | (18,749 | )      |   |   | (16,199 | ) |
|     Advances      from Others for Construction                                                                                                                        |   |   | (737    | )      |   |   | (961    | )      |   |   | (1,102 | ) |
|      Net      Additions to Utility Plant Used in Continuing Operations                                                                                           |   |   | (20,614 | )      |   |   | (19,710 | )      |   |   | (17,301 | ) |
|      Purchase      of Eastern and H20 Services Assets                                                                                                            |   |   | (3,500  | )      |   |   | --      |   |   |   | -- |   |
|      Release      of Restricted Cash                                                                                                                             |   |   | 8,393   |   |   |   | --      |   |   |   | 2,686 |   |
|      Proceeds      from Sale of BARLACO Assets Sold (Net of $35 in Transaction      Costs)                                                                       |   |   | --      |   |   |   | --      |   |   |   | 965 |   |
|      Sale      (Purchase) of Short Term Investments                                                                                                              |   |   | --      |   |   |   | --      |   |   |   | 6,922 |   |
|                Net      Cash and Cash Equivalents Used in Investing Activities in Continuing      Operations   |   |   | (15,721 | )      |   |   | (19,710 | )      |   |   | (6,728 | ) |
|                Net      Cash and Cash Equivalents Used in Investing Activities in Discontinued      Operations |   |   | --      |   |   |   | --      |   |   |   | -- |   |
|                Net      Cash Used in Investing Activities                                                      |   |   | (15,721 | )      |   |   | (19,710 | )      |   |   | (6,728 | ) |
|                                                                                                                                                                                      |   |   |    |   |   |   |    |   |   |   |   |   |
| Financing      Activities:                                                                                                                                                                |   |   |    |   |   |   |    |   |   |   |   |   |
|   Proceeds      from Interim Bank Loans                                                                                                                                         |   |   | 12,074  |   |   |   | 6,459   |   |   |   | 5,250 |   |
|   Repayment      of Interim Bank Loans                                                                                                                                          |   |   | (6,459  | )      |   |   | (5,250  | )      |   |   | (4,750 | ) |
|   Repayment      of Long-Term Debt Including Current Portion                                                                                                                    |   |   | (57     | )      |   |   | (62     | )      |   |   | (2,381 | ) |
|   Proceeds      from Issuance of Long-Term Debt                                                                                                                                 |   |   | --      |   |   |   | 6,482   |   |   |   | -- |   |
|   Proceeds      from Issuance of Common Stock                                                                                                                                   |   |   | 1,281   |   |   |   | 1,238   |   |   |   | 1,401 |   |
|   Proceeds      from Exercise of Stock Options                                                                                                                                  |   |   | 218     |   |   |   | 809     |   |   |   | 284 |   |
|   Redemption      of Preferred Stock                                                                                                                                            |   |   | --      |   |   |   | --      |   |   |   | (75 | ) |
|   Costs      Incurred to Issue Long-Term Debt and Common Stock                                                                                                                  |   |   | (2      | )      |   |   | (367    | )      |   |   | (4 | ) |
|   Advances      from Others for Construction                                                                                                                                    |   |   | 737     |   |   |   | 961     |   |   |   | 1,102 |   |
|   Cash      Dividends Paid                                                                                                                                                      |   |   | (7,411  | )      |   |   | (7,181  | )      |   |   | (7,030 | ) |
|           Net      Cash and Cash Equivalents Provided by (Used in)                                                                      |   |   |    |   |   |   |    |   |   |   |   |   |
|                Financing      Activities in Continuing Operations                                              |   |   | 381     |   |   |   | 3,089   |   |   |   | (6,203 | ) |
|           Net      Cash and Cash Equivalents Used in Financing Activities in Discontinued      Operations                               |   |   | --      |   |   |   | --      |   |   |   | -- |   |
|           Net      Cash and Cash Equivalents Provided by (Used in) Financing      Activites                                             |   |   | 381     |   |   |   | 3,089   |   |   |   | (6,203 | ) |
|                                                                                                                                                                                      |   |   |    |   |   |   |    |   |   |   |   |   |
| Net      Increase (Decrease) in Cash and Cash Equivalents                                                                                                                                 |   |   | 347     |   |   |   | (1,040  | )      |   |   | (3,062 | ) |
| Cash      and Cash Equivalents at Beginning of Year                                                                                                                                       |   |   | 337     |   |   |   | 1,377   |   |   |   | 4,439 |   |
| Cash      and Cash Equivalents at End of Year                                                                                                                                             |   | $      | 684     |   |   | $      | 337     |   |   | $      | 1,377 |   |
|                                                                                                                                                                                      |   |   |    |   |   |   |    |   |   |   |   |   |
| Non-Cash      Investing and Financing Activities:                                                                                                                                         |   |   |    |   |   |   |    |   |   |   |   |   |
|       Non-Cash      Contributed Utility Plant (see Note 1 for details)                                                                                      |   | $      | 4,089   |   |   | $      | 2,116   |   |   | $      | 3,295 |   |
|       Short-term      Investment of Bond Proceeds Held in Trust                                                                                             |   | $      | --      |   |   | $      | 8,220   |   |   | $      | -- |   |
| Supplemental      Disclosures of Cash Flow Information:                                                                                                                                   |   |   |    |   |   |   |    |   |   |   |   |   |
|   Cash      Paid for Continuing Operations During the Year for:                                                                                                                 |   |   |    |   |   |   |    |   |   |   |   |   |
|     Interest                                                                                                                                                          |   | $      | 4,876   |   |   | $      | 4,398   |   |   | $      | 4,159 |   |
|     State      and Federal Income Taxes                                                                                                                               |   | $      | 3,273   |   |   | $      | 2,096   |   |   | $      | 1,176 |   |
|                                                                                                                                                                                      |   |   |    |   |   |   |    |   |   |   |   |   |
|   Cash      Paid for Discontinued Operations During the Year for:                                                                                                               |   |   |    |   |   |   |    |   |   |   |   |   |
|     Interest                                                                                                                                                          |   | $      | --      |   |   | $      | --      |   |   | $      | -- |   |
|     State      and Federal Income Taxes                                                                                                                               |   | $      | --      |   |   | $      | --      |   |   | $      | 73 |   |
|                                                                                                                                                                                      |   |   |    |   |   |   |    |   |   |   |   |   |

----

Table of Contents

| (in      thousands)                                  |   | December      31 |   |
|------------------------------------------------------|--------|------------------|--------|
|                                                 |   | 2008             |   |   | 2007 |   |
| Assets:                                              |   |             |   |   |   |   |
| Postretirement      benefits                         |   | $                | 11,481 |   |   | $ | 6,136 |   |
| Unrecovered      income taxes and other              |   |             | 18,128 |   |   |   | 25,404 |   |
| Deferred      revenue (included in deferred charges) |   |             | 4,600  |   |   |   | 3,823 |   |
| Other      (included in deferred charges)            |   |             | 1,363  |   |   |   | 1,806 |   |
| Total      regulatory assets                         |   | $                | 35,572 |   |   | $ | 37,169 |   |
|                                                 |   |             |   |   |   |   |   |   |
| Liabilities:                                         |   |             |   |   |   |   |   |   |
| Investment      Tax Credits                          |   | $                | 1,497  |   |   | $ | 1,560 |   |
| Unfunded      future income taxes and other          |   |             | 18,128 |   |   |   | 25,404 |   |
| Total      regulatory liabilities                    |   | $                | 19,625 |   |   | $ | 26,964 |   |

----

Table of Contents

| (in      thousands)                                       |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|-----------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Additions      to Utility Plant:                          |   |   |   |   |   |   |   |   |   |
| Company      Financed                                     |   | $      | 19,877 |   |   | $      | 18,749 |   |   | $ | 16,199 |   |
| Allowance      for Funds Used During Construction         |   |   | 123    |   |   |   | 131    |   |   |   | 491 |   |
| Subtotal      – Utility Plant Increase to Rate Base |   |   | 20,000 |   |   |   | 18,880 |   |   |   | 16,690 |   |
| Advances      from Others for Construction                |   |   | 737    |   |   |   | 961    |   |   |   | 1,102 |   |
| Net      Additions to Utility Plant                       |   | $      | 20,737 |   |   | $      | 19,841 |   |   | $ | 17,792 |   |

----

Table of Contents

| Years      ended December 31,                              |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Numerator      (in thousands)                              |   |   |   |   |   |   |   |   |   |
| Basic      Income from Continuing Operations               |   | $      | 9,424  |   |   | $      | 8,781  |   |   | $ | 6,708 |   |
| Diluted      Income from Continuing Operations             |   | $      | 9,424  |   |   | $      | 8,781  |   |   | $ | 6,708 |   |
| Denominator      (in thousands)                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      Weighted Average Shares Outstanding             |   |   | 8,377  |   |   |   | 8,270  |   |   |   | 8,188 |   |
| Dilutive      Effect of Stock Awards                       |   |   | 53     |   |   |   | 63     |   |   |   | 49 |   |
| Diluted      Weighted Average Shares Outstanding           |   |   | 8,430  |   |   |   | 8,333  |   |   |   | 8,237 |   |
| Earnings      per Share                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      Earnings per Share from Continuing Operations   |   | $      | 1.12   |   |   | $      | 1.06   |   |   | $ | 0.81 |   |
| Dilutive      Effect of Stock Awards                       |   |   | 0.01   |   |   |   | 0.01   |   |   |   | -- |   |
| Diluted      Earnings per Share from Continuing Operations |   | $      | 1.11   |   |   | $      | 1.05   |   |   | $ | 0.81 |   |

----

Table of Contents

----

Table of Contents

| (in      thousands)                                |   | Year      endedDecember      31, 2006 |   |
|----------------------------------------------------|--------|---------------------------------------|--------|
| Water      Activities:                             |   |                                  |   |
| Operating      Revenues                            |   | $                                     | --     |   |
| Income      Taxes                                  |   |                                  | (244   | ) |
| Net      Income from Water Activities              |   |                                  | 243    |   |
|                                               |   |                                  |   |   |
| Services      and Rentals:                         |   |                                  |   |   |
| Revenues                                           |   | $                                     | --     |   |
| Income      Taxes                                  |   |                                  | (12    | ) |
| Net      Income from Services and Rentals          |   |                                  | --     |   |
|                                               |   |                                  |   |   |
| Total      Net Income from Discontinued Operations |   | $                                     | 243    |   |

FIN 48, we must recognize the tax benefit from an uncertain taxposition only if it is more likely than not that the tax position will besustained on examination by the taxing authorities, based on the technicalmerits of the position. The tax benefits recognized in the financial statementsfrom such a position are measured based on the largest benefit that has agreater than 50% likelihood of being realized upon ultimate resolution. Thereassessment of our tax positions in accordance with 
FIN 48 didnot have an impact on our results of operations, financial condition orliquidity.  From time to time, the Company is assessed interest andpenalties by taxing authorities.  In those cases, the charges wouldappear on the Other line item on the Income Statement.  During 2007,the Company was charged approximately $2,000 in interest relating to the 2003federal tax examination.  There were no such charges for the yearsending December 31, 2008 and 2006.  Additionally, there were noaccruals relating to interest or penalties as of December 31, 2008 and2007.  The Company remains subject to examination by federalauthorities for the 2005 through 2007 tax years and by state authorities for thetax years 2003 through 2007.

| (in      thousands)                                                           |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|-------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Federal      Classified as Operating Expense from Continuing Operations       |   | $      | 3,631  |   |   | $      | 3,834  |   |   | $ | 2,080 |   |
| Federal      Classified as Other Utility Income from Continuing    Operations |   |   | 267    |   |   |   | 238    |   |   |   | 232 |   |
| Federal      Classified as Other Income from Continuing Operations            |   |   |   |   |   |   |   |   |   |   |   |   |
| Land      Sales                                                               |   |   | --     |   |   |   | 61     |   |   |   | 287 |   |
| Land      Donations                                                           |   |   | 178    |   |   |   | 83     |   |   |   | (892 | ) |
| Non-Water      Sales                                                          |   |   | 360    |   |   |   | 332    |   |   |   | 264 |   |
| Other                                                                         |   |   | (195   | )      |   |   | (529   | )      |   |   | (981 | ) |
| Total      Federal Income Tax Expense from Continuing Operations              |   |   | 4,241  |   |   |   | 4,019  |   |   |   | 990 |   |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| State      Classified as Operating Expense from Continuing Operations         |   |   | (113   | )      |   |   | 361    |   |   |   | (26 | ) |
| State      Classified as Other Utility Income from Continuing    Operations   |   |   | 64     |   |   |   | 57     |   |   |   | 68 |   |
| State      Classified as Other Income from Continuing Operations              |   |   |   |   |   |   |   |   |   |   |   |   |
| Land      Sales                                                               |   |   | --     |   |   |   | 14     |   |   |   | 89 |   |
| Land      Donations                                                           |   |   | (19)   |   |   |   | (199   | )      |   |   | (902 | ) |
| Non-Water      Sales                                                          |   |   | 90     |   |   |   | 79     |   |   |   | 79 |   |
| Other                                                                         |   |   | (23)   |   |   |   | (101   | )      |   |   | (191 | ) |
| Total      State Income Tax Expense from Continuing Operations                |   |   | (1     | )      |   |   | 211    |   |   |   | (883 | ) |
| Total      Income Tax Expense from Continuing Operations                      |   | $      | 4,240  |   |   | $      | 4,230  |   |   | $ | 107 |   |

| (in      thousands)                                         |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|-------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Current      from Continuing Operations                     |   |   |   |   |   |   |   |   |   |
| Federal                                                     |   | $      | 1,906  |   |   | $      | 1,938  |   |   | $ | 1,165 |   |
| State                                                       |   |   | 110    |   |   |   | 158    |   |   |   | 221 |   |
| Total      Current from Continuing Operations               |   |   | 2,016  |   |   |   | 2,096  |   |   |   | 1,386 |   |
| Deferred      Income Taxes from Continuing Operations, Net  |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      Tax Credit                                  |   |   | (63    | )      |   |   | (63    | )      |   |   | (63 | ) |
| Deferred      Revenue                                       |   |   | 264    |   |   |   | 1,202  |   |   |   | -- |   |
| Land      Donations                                         |   |   | 187    |   |   |   | 260    |   |   |   | (501 | ) |
| Depreciation                                                |   |   | 1,583  |   |   |   | 1,206  |   |   |   | 1,173 |   |
| Other                                                       |   |   | 364    |   |   |   | (524   | )      |   |   | (784 | ) |
| Total      Federal from Continuing Operations               |   |   | 2,335  |   |   |   | 2,081  |   |   |   | (175 | ) |
| State                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Land      Donations                                         |   |   | 85     |   |   |   | (108   | )      |   |   | (134 | ) |
| Other                                                       |   |   | (196   | )      |   |   | 161    |   |   |   | (970 | ) |
| Total      State from Continuing Operations                 |   |   | (111   | )      |   |   | 53     |   |   |   | (1,104 | ) |
| Total      Deferred Income Taxes from Continuing Operations |   |   | 2,224  |   |   |   | 2,134  |   |   |   | (1,279 | ) |
| Total      from Continuing Operations                       |   | $      | 4,240  |   |   | $      | 4,230  |   |   | $ | 107 |   |

| (in      thousands)                          |   | 2008   |    |   | 2007   |   |
|----------------------------------------------|--------|--------|---------|--------|--------|--------|
| Unrecovered      Income Taxes                |   | $      | (22,856 | )      |   | $      | (30,278 | ) |
| Deferred      Federal and State Income Taxes |   |   | 30,472  |   |   |   | 28,616 |   |
| Unfunded      Future Income Taxes            |   |   | 18,128  |   |   |   | 25,404 |   |
| Unamortized      Investment Tax Credit       |   |   | 1,497   |   |   |   | 1,560 |   |
| Other                                        |   |   | (142    | )      |   |   | (80 | ) |
| Net      Deferred Income Tax Liability       |   | $      | 27,099  |   |   | $      | 25,222 |   |

| (in      thousands)                           |   | 2008   |   |   | 2007   |   |
|-----------------------------------------------|--------|--------|--------|--------|--------|--------|
| Charitable      Contribution Carryforward (1) |   | $      | (2,705 | )      |   | $      | (2,977 | ) |
| Valuation      Allowance                      |   |   | 2,064  |   |   |   | 1,888 |   |
| Tax      Credit Carryforward (2)              |   |   | (1,624 | )      |   |   | (1,436 | ) |
| Prepaid      Income Taxes on CIAC             |   |   | (120   | )      |   |   | (209 | ) |
| Prepaid      FIT on Services                  |   |   | (112   | )      |   |   | (174 | ) |
| Other      Comprehensive Income               |   |   | (432   | )      |   |   | (29 | ) |
| Accelerated      Depreciation                 |   |   | 28,438 |   |   |   | 26,975 |   |
| Net      of AFUDC and Capitalized Interest    |   |   | 234    |   |   |   | 211 |   |
| Unamortized      Investment Tax Credit        |   |   | 1,497  |   |   |   | 1,560 |   |
| Other                                         |   |   | (141   | )      |   |   | (587 | ) |
| Net      Deferred Income Tax Liability        |   | $      | 27,099 |   |   | $      | 25,222 |   |

| (1)   | 2008      charitable contribution carryover expires beginning in 2009 and ending in      2012. |
|-----------------|------------------------------------------------------------------------------------------------|

| (2)   | State      tax credit carry-forwards expire beginning 2017 and ending in      2020. |
|-----------------|-------------------------------------------------------------------------------------|

| (in      thousands)                                  |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Pre-Tax      Income                                  |   |   |   |   |   |   |   |   |   |
| Income      From Continuing Operations               |   | $      | 9,424  |   |   | $      | 8,781  |   |   | $ | 6,708 |   |
| Income      Taxes                                    |   |   | 4,240  |   |   |   | 4,230  |   |   |   | 107 |   |
| Total      Pre-Tax Income From Continuing Operations |   | $      | 13,664 |   |   | $      | 13,011 |   |   | $ | 6,815 |   |

|                                                                             |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|----------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Federal      Statutory Tax Rate                                                  |   |   | 34.0   | %      |   |   | 34.0   | %      |   |   | 34.0 | % |
| Tax      Effect Differences:                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| State      Income Taxes Net of Federal Benefit                                   |   |   | --     |   |   |   | 1.1    | %      |   |   | (0.1 | %) |
| Reversal      of Regulatory Liability                                            |   |   | --     |   |   |   | --     |   |   |   | (14.4 | %) |
| Adjustment      to Taxes Due to Closed IRS Examination                           |   |   | --     |   |   |   | --     |   |   |   | (14.3 | %) |
| Depreciation                                                                     |   |   | 1.6    | %      |   |   | 1.7    | %      |   |   | 2.6 | % |
| Charitable      Contributions – Land Donation (Net of Valuation Allowance) |   |   | 1.5    | %      |   |   | 0.4    | %      |   |   | (7.7 | %) |
| Pension      Costs                                                               |   |   | (5.1   | %)     |   |   | (5.3   | %)     |   |   | 7.7 | % |
| Allowance      for Funds Used During Construction                                |   |   | (0.3   | %)     |   |   | (0.3   | %)     |   |   | (2.9 | %) |
| Change      in Estimate of Prior Year Income Tax Expense                         |   |   | (0.5   | %)     |   |   | 0.2    | %      |   |   | 0.6 | % |
| Rate      Case Expense                                                           |   |   | 0.6    | %      |   |   | 0.6    | %      |   |   | (3.6 | %) |
| Other                                                                            |   |   | (0.7   | %)     |   |   | 0.1    | %      |   |   | (0.3 | %) |
| Effective      Income Tax Rate for Continuing Operations                         |   |   | 31.1   | %      |   |   | 32.5   | %      |   |   | 1.6 | % |

----

Table of Contents

| (in      thousands, except share data)                                                       |   | Shares |      |   | Issuance      Amount |   |   | Expense |   |   | Total  |   |
|----------------------------------------------------------------------------------------------|--------|--------|-----------|--------|----------------------|--------|--------|---------|--------|--------|--------|--------|
| Balance,      January 1, 2006                                                                |   |   | 8,169,627 |   |                 | $      | 59,604 |    |   | $      | (1,599 | )      |   | $ | 58,005 |   |
| Stock      and equivalents issued through Performance Stock Program, Net of      Forfeitures |   |   | 23,058    |   |                 |   | 323    |    |   |   | --     |   |   |   | 323 |   |
| Dividend      Reinvestment Plan                                                              |   |   | 60,747    |   |                 |   | 1,401  |    |   |   | --     |   |   |   | 1,401 |   |
| Stock      Options Exercised and Expensed                                                    |   |   | 16,962    |   |                 |   | 441    |    |   |   | (2     | )      |   |   | 439 |   |
| Other      Paid in Capital                                                                   |   |   | --        |   |                 |   | (3     | )       |   |   | --     |   |   |   | (3 | ) |
| Balance,      December 31, 2006                                                              |   |   | 8,270,394 |   |                 | $      | 61,766 |    |   | $      | (1,601 | )      |   | $ | 60,165 |   |
| Stock      and equivalents issued through Performance Stock Program, Net of      Forfeitures |   |   | 13,975    |   |                 |   | 420    |    |   |   | --     |   |   |   | 420 |   |
| Dividend      Reinvestment Plan                                                              |   |   | 54,567    |   |                 |   | 1,326  |    |   |   | --     |   |   |   | 1,326 |   |
| Stock      Options Exercised and Expensed                                                    |   |   | 37,906    |   |                 |   | 902    |    |   |   | (5     | )      |   |   | 897 |   |
| Balance,      December 31, 2007                                                              |   |   | 8,376,842 |   |                 | $      | 64,414 |    |   | $      | (1,606 | )      |   | $ | 62,808 |   |
| Stock      and equivalents issued through Performance Stock Program, Net of      Forfeitures |   |   | 22,046    |   |                 |   | 465    |    |   |   | --     |   |   |   | 465 |   |
| Dividend      Reinvestment Plan                                                              |   |   | 52,606    |   |                 |   | 1,287  |    |   |   | --     |   |   |   | 1,287 |   |
| Stock      Options Exercised and Expensed                                                    |   |   | 11,775    |   |                 |   | 246    |    |   |   | (2     | )      |   |   | 244 |   |
| Balance,      December 31, 2008 (1)                                                          |   |   | 8,463,269 |   |                 | $      | 66,412 |    |   | $      | (1,608 | )      |   | $ | 64,804 |   |

| (1)   | Includes      37,281 restricted shares and 49,199 common stock equivalent shares issued      through the Performance Stock Programs through December 31,      2008. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (in      thousands, except per share data)                     |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|----------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Balance,      beginning of year                                |   | $      | 37,272 |   |   | $      | 35,676 |   |   | $ | 35,777 |   |
| Net      Income                                                |   |   | 9,424  |   |   |   | 8,781  |   |   |   | 6,951 |   |
| Sub-total                                                      |   |   | 46,696 |   |   |   | 44,457 |   |   |   | 42,728 |   |
| Dividends      declared:                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Cumulative      Preferred Stock, Series A, $0.80 per share     |   |   | 12     |   |   |   | 12     |   |   |   | 12 |   |
| Cumulative      Preferred Stock, Series $0.90, $0.90 per share |   |   | 26     |   |   |   | 26     |   |   |   | 26 |   |
| Common      Stock:                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| 2008      $0.880 per Common Share                              |   |   | 7,373  |   |   |   | --     |   |   |   | -- |   |
| 2007      $0.865 per Common Share                              |   |   | --     |   |   |   | 7,147  |   |   |   | -- |   |
| 2006      $0.855 per Common Share                              |   |   | --     |   |   |   | --     |   |   |   | 7,014 |   |
| Total      Dividends Declared                                  |   |   | 7,411  |   |   |   | 7,185  |   |   |   | 7,052 |   |
| Balance,      end of year                                      |   | $      | 39,285 |   |   | $      | 37,272 |   |   | $ | 35,676 |   |

----

Table of Contents

|   | Level      1 – | Quoted      market prices in active markets for identical assets or      liabilities |
|--------|----------------------|--------------------------------------------------------------------------------------|

|   | Level      2 – | Inputs      other than Level 1 that are either directly or indirectly      observable |
|--------|----------------------|---------------------------------------------------------------------------------------|

|   | Level      3 – | Unobservable      inputs developed using the Company’s estimates and assumptions, which      reflect those that the Company believes market participants would      use. |
|--------|----------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (in      thousands)     |   | Level      1 |   |   | Level      2 |   |   | Level      3 |   |
|-------------------------|--------|--------------|--------|--------|--------------|--------|--------|--------------|--------|
| Assets:                 |   |         |   |   |         |   |   |         |   |
| Investments             |   | $            | 1,288  |   |         | $      | --     |         |   | $ | -- |   |
| Liabilities:            |   |         |   |   |         |   |   |         |   |   |   |   |
| Interest      Rate Swap |   | $            | --     |   |         | $      | 88     |         |   | $ | -- |   |

----

Table of Contents

| (in      thousands)                                                                                  |   | 2008                                     |                            |   | 2007   |   |
|------------------------------------------------------------------------------------------------------|--------|------------------------------------------|---------------------------------|--------|--------|--------|
| The      Connecticut Water Company:                                                                  |   |                                     |                            |   |   |   |
| Unsecured      Water Facilities Revenue Bonds                                                        |   |                                     |                            |   |   |   |
|                                                                                                 | 5.05   | %                                        | 1998      Series A, Due 2028    |   | $      | 9,635  |   |   | $ | 9,640 |   |
|                                                                                                 | 5.125  | %                                        | 1998      Series B, Due 2028    |   |   | 7,615  |   |   |   | 7,635 |   |
|                                                                                                 | 4.40   | %                                        | 2003A      Series, Due 2020     |   |   | 8,000  |   |   |   | 8,000 |   |
|                                                                                                 | 5.00   | %                                        | 2003C      Series, Due 2022     |   |   | 14,915 |   |   |   | 14,915 |   |
|                 Var.      |   | 2004      Series Variable Rate, Due 2029 |                            |   | 12,500 |   |   |   | 12,500 |   |
|                 Var. |   | 2004      Series A, Due 2028             |                            |   | 5,000  |   |   |   | 5,000 |   |
|                 Var. |   | 2004      Series B, Due 2028             |                            |   | 4,550  |   |   |   | 4,550 |   |
|                                                                                                 | 5.00   | %                                        | 2005      A Series, Due 2040    |   |   | 14,935 |   |   |   | 14,960 |   |
|                                                                                                 | 5.00   | %                                        | 2007      A Series, Due 2037    |   |   | 15,000 |   |   |   | 15,000 |   |
| Total      The Connecticut Water Company                                                             |   |                                     | 92,150                          |   |   |   | 92,200 |   |
| Chester      Realty:                                                                                 |   |                                     |                            |   |   |   |   |   |
| Secured                                                                                              |   |                                     |                            |   |   |   |   |   |
|                                                                                                 | 6.39   | %                                        | NewAlliance      Bank, Due 2017 |   |   | 85     |   |   |   | 92 |   |
| Total      Chester Realty                                                                            |   |                                     | 85                              |   |   |   | 92 |   |
| Total      Connecticut Water Service, Inc.                                                           |   |                                     | 92,235                          |   |   |   | 92,292 |   |
| Less      Current Portion                                                                            |   |                                     | (8                              | )      |   |   | (7 | ) |
| Total      Long-Term Debt                                                                            |   | $                                        | 92,227                          |   |   | $      | 92,285 |   |

| (in      thousands) |   |   |   |
|---------------------|--------|--------|--------|
| 2009                |   | $      | 8      |   |
| 2010                |   |   | 8      |   |
| 2011                |   |   | 8      |   |
| 2012                |   |   | 9      |   |
| 2013                |   |   | 9      |   |

----

Table of Contents

| (in      thousands, except share data)                                                                               |   | 2008   |   |   | 2007   |   |
|----------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Connecticut      Water Service, Inc.                                                                                 |   |   |   |   |   |   |
| Cumulative      Series A Voting, $20 Par Value; Authorized, Issued and Outstanding 15,000      Shares                |   | $      | 300    |   |   | $      | 300 |   |
| Cumulative      Series $0.90 Non-Voting, $16 Par Value; Authorized 50,000 Shares, Issued      and Outstanding 24,999 |   |   | 472    |   |   |   | 472 |   |
| Total      Preferred Stock                                                                                           |   | $      | 772    |   |   | $      | 772 |   |

| (in      thousands)                |   | 2008   |    |   | 2007   |   |
|------------------------------------|--------|--------|---------|--------|--------|--------|
| Land                               |   | $      | 9,917   |   |   | $      | 9,507 |   |
| Source      of supply              |   |   | 27,605  |   |   |   | 25,876 |   |
| Pumping                            |   |   | 27,646  |   |   |   | 24,999 |   |
| Water      treatment               |   |   | 54,643  |   |   |   | 52,919 |   |
| Transmission      and distribution |   |   | 268,927 |   |   |   | 246,676 |   |
| General                            |   |   | 28,921  |   |   |   | 25,235 |   |
| Held      for future use           |   |   | 419     |   |   |   | 429 |   |
| Acquisition      Adjustment        |   |   | (7,607  | )      |   |   | (1,220 | ) |
| Total                              |   | $      | 410,471 |   |   | $      | 384,421 |   |

----

Table of Contents

| (in      thousands)                      |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Municipal      Property Taxes            |   | $      | 5,129  |   |   | $      | 4,903  |   |   | $ | 4,743 |   |
| Payroll      Taxes                       |   |   | 912    |   |   |   | 837    |   |   |   | 832 |   |
| Total      Taxes Other than Income Taxes |   | $      | 6,041  |   |   | $      | 5,740  |   |   | $ | 5,575 |   |

| (in      thousands)                             |   | 2008   |   |   | 2007   |   |
|-------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Defined      Benefit Pension Plan               |   | $      | 9,624  |   |   | $      | 2,199 |   |
| Post      Retirement Benefit Other than Pension |   |   | 3,347  |   |   |   | 6,464 |   |
| Supplemental      Executive Retirement Plan     |   |   | 3,723  |   |   |   | 4,055 |   |
| Deferred      Compensation                      |   |   | 1,342  |   |   |   | 1,325 |   |
| Other      Long-Term Compensation               |   |   | 295    |   |   |   | 674 |   |
| Total      Long-Term Compensation Arrangements  |   | $      | 18,331 |   |   | $      | 14,717 |   |

|              |   | 2008   |   |   | 2007   |   |
|-------------------|--------|--------|--------|--------|--------|--------|
| Equity            |   |   | 65     | %      |   |   | 65 | % |
| Fixed      Income |   |   | 35     | %      |   |   | 35 | % |
| Total             |   |   | 100    | %      |   |   | 100 | % |

----

Table of Contents

| Pension Benefits(in      thousands)                                 |   | 2008   |   |   | 2007   |   |
|---------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Change      in benefit obligation:                                  |   |   |   |   |   |   |
| Benefit      obligation, beginning of year                          |   | $      | 30,365 |   |   | $      | 31,539 |   |
| Service      cost                                                   |   |   | 1,259  |   |   |   | 1,277 |   |
| Interest      cost                                                  |   |   | 1,906  |   |   |   | 1,789 |   |
| Actuarial      loss (gain)                                          |   |   | 410    |   |   |   | (2,415 | ) |
| Benefits      paid                                                  |   |   | (1,054 | )      |   |   | (1,825 | ) |
| Benefit      obligation, end of year                                |   | $      | 32,886 |   |   | $      | 30,365 |   |
|                                                                |   |   |   |   |   |   |   |   |
| Change      in plan assets:                                         |   |   |   |   |   |   |   |   |
| Fair      value, beginning of year                                  |   | $      | 28,166 |   |   | $      | 28,015 |   |
| Actual      return on plan assets                                   |   |   | (7,350 | )      |   |   | 1,931 |   |
| Employer      contributions                                         |   |   | 3,500  |   |   |   | 45 |   |
| Benefits      paid                                                  |   |   | (1,054 | )      |   |   | (1,825 | ) |
| Fair      value, end of year                                        |   | $      | 23,262 |   |   | $      | 28,166 |   |
|                                                                |   |   |   |   |   |   |   |   |
| Funded      Status                                                  |   | $      | (9,624 | )      |   | $      | (2,199 | ) |
|                                                                |   |   |   |   |   |   |   |   |
| Amount      Recognized in Consolidated Balance Sheets Consisted of: |   |   |   |   |   |   |   |   |
| Non-current      asset                                              |   | $      | --     |   |   | $      | -- |   |
| Current      liability                                              |   |   | --     |   |   |   | -- |   |
| Non-current      liability                                          |   |   | (9,624 | )      |   |   | (2,199 | ) |
| Net      amount recognized                                          |   | $      | (9,624 | )      |   | $      | (2,199 | ) |

| Weighted-average      assumptions used to determine benefit obligations at December      31:            |   | 2008   |   |   | 2007   |   |
|---------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Discount      rate                                                                                      |   |   | 6.25   | %      |   |   | 6.30 | % |
| Rate      of compensation increase                                                                      |   |   | 4.50   | %      |   |   | 4.50 | % |
| Weighted-average      assumptions used to determine net periodic cost for years ended December      31: |   |   |   |   |   |   |   |   |
| Discount      rate                                                                                      |   |   | 6.30   | %      |   |   | 5.75 | % |
| Expected      long-term return on plan assets                                                           |   |   | 8.00   | %      |   |   | 8.00 | % |
| Rate      of compensation increase                                                                      |   |   | 4.50   | %      |   |   | 4.50 | % |

----

Table of Contents

| Pension Benefits(in      thousands)            |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Components      of net periodic benefit costs: |   |   |   |   |   |   |   |   |   |
| Service      cost                              |   | $      | 1,259  |   |   | $      | 1,277  |   |   | $ | 1,228 |   |
| Interest      cost                             |   |   | 1,906  |   |   |   | 1,789  |   |   |   | 1,681 |   |
| Expected      return on plan assets            |   |   | (2,120 | )      |   |   | (2,017 | )      |   |   | (1,836 | ) |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of:                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      transition obligation                 |   |   | 2      |   |   |   | 2      |   |   |   | 2 |   |
| Net      loss                                  |   |   | 69     |   |   |   | 69     |   |   |   | 75 |   |
| Prior      service cost                        |   |   | 142    |   |   |   | 345    |   |   |   | 491 |   |
| Net      Periodic Pension Benefit Costs        |   | $      | 1,258  |   |   | $      | 1,465  |   |   | $ | 1,641 |   |

| Pension Benefits(in      thousands)                   |   | 2008   |   |   | 2007   |   |
|-------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Change      in net loss (gain)                        |   | $      | 9,880  |   |   | $      | (2,329 | ) |
| Amortization      of transition obligation            |   |   | (2     | )      |   |   | (2 | ) |
| Amortization      of net loss                         |   |   | (69    | )      |   |   | (69 | ) |
| Amortization      of prior service cost               |   |   | (142   | )      |   |   | (345 | ) |
| Total      recognized to Regulatory Asset (Liability) |   | $      | 9,667  |   |   | $      | (2,745 | ) |

| Amounts      Recognized as a Regulatory Asset (Liability) at December 31: |   | 2008   |   |   | 2007   |   |
|---------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Transition      obligation                                                |   | $      | 6      |   |   | $      | 9 |   |
| Prior      service cost                                                   |   |   | 516    |   |   |   | 585 |   |
| Net      (gain) loss                                                      |   |   | 8,984  |   |   |   | (754 | ) |
| Total      Recognized as a Regulatory Asset (Liability)                   |   | $      | 9,506  |   |   | $      | (160 | ) |

| Estimated      Net Periodic Benefit Cost Amortizations for the periods January 1 -      December 31: |   | 2009   |   |
|------------------------------------------------------------------------------------------------------|--------|--------|--------|
| Amortization      of transition obligation                                                           |   | $      | 2      |   |
| Amortization      of prior service cost                                                              |   |   | 69     |   |
| Amortization      of net loss                                                                        |   |   | 380    |   |
| Total      Estimated Net Periodic Benefit Cost Amortizations                                         |   | $      | 451    |   |

|              |   | 2008   |   |   | 2007   |   |
|-------------------|--------|--------|--------|--------|--------|--------|
| Equity            |   |   | 58     | %      |   |   | 64 | % |
| Fixed      Income |   |   | 42     | %      |   |   | 36 | % |
| Total             |   |   | 100    | %      |   |   | 100 | % |

| (in      thousands)          |   |   |   |
|------------------------------|--------|--------|--------|
| 2009                         |   | $      | 1,443  |   |
| 2010                         |   |   | 1,924  |   |
| 2011                         |   |   | 1,482  |   |
| 2012                         |   |   | 2,713  |   |
| 2013                         |   |   | 1,982  |   |
| Years      2014 – 2018 |   |   | 16,465 |   |

----

Table of Contents

| PBOP Benefits (in      thousands)                                   |   | 2008   |   |    | 2007   |   |
|---------------------------------------------------------------------|--------|--------|--------|---------|--------|--------|
| Change      in benefit obligation:                                  |   |   |   |    |   |   |
| Benefit      obligation, beginning of year                          |   | $      | 12,316 |    |   | $      | 10,283 |   |
| Service      cost                                                   |   |   | 632    |    |   |   | 651 |   |
| Interest      cost                                                  |   |   | 657    |    |   |   | 610 |   |
| Plan      participant contributions                                 |   |   | 144    |    |   |   | 138 |   |
| Plan      amendments                                                |   |   | (3,088 | )       |   |   | -- |   |
| Actuarial      (gain) loss                                          |   |   | (2,249 | )       |   |   | 1,083 |   |
| Benefits      paid                                                  |   |   | (423   | )       |   |   | (449 | ) |
| Benefit      obligation, end of year                                |   | $      | 7,989  |    |   | $      | 12,316 |   |
|                                                                |   |   |   |    |   |   |   |   |
| Change      in plan assets:                                         |   |   |   |    |   |   |   |   |
| Fair      value, beginning of year                                  |   | $      | 5,906  |    |   | $      | 4,260 |   |
| Actual      return on plan assets                                   |   |   | (1,774 | )       |   |   | 198 |   |
| Employer      contributions                                         |   |   | 842    |    |   |   | 1,759 |   |
| Participants’      contributions                              |   |   | 143    |    |   |   | 138 |   |
| Benefits      paid                                                  |   |   | (423   | )       |   |   | (449 | ) |
| Fair      value, end of year                                        |   | $      | 4,694  |    |   | $      | 5,906 |   |
|                                                                |   |   |   |    |   |   |   |   |
| Funded      Status                                                  |   | $      | (3,295 | )       |   | $      | (6,410 | )  |
|                                                                |   |   |   |    |   |   |   |   |
| Amount      Recognized in Consolidated Balance Sheets Consisted of: |   |   |   |    |   |   |   |   |
| Non-current      asset                                              |   | $      | --     |    |   | $      | -- |   |
| Current      liability                                              |   |   | --     |    |   |   | -- |   |
| Non-current      liability                                          |   |   | (3,295 | )  |   |   | (6,410 | )  |
| Net      amount recognized                                          |   | $      | (3,295 | )  |   | $      | (6,410 | )  |

| Weighted-average      assumptions used to determine benefit obligations at December      31:            |   | 2008   |   |   | 2007   |   |
|---------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Discount      rate                                                                                      |   |   | 6.20   | %      |   |   | 6.30 | % |
| Rate      of compensation increase                                                                      |   |   | 4.50   | %      |   |   | 4.50 | % |
| Weighted-average      assumptions used to determine net periodic cost for years ended December      31: |   |   |   |   |   |   |   |   |
| Discount      rate                                                                                      |   |   | 6.30   | %      |   |   | 5.75 | % |
| Expected      long-term return on plan assets                                                           |   |   | 5.00   | %      |   |   | 5.00 | % |
| Rate      of compensation increase                                                                      |   |   | 4.50   | %      |   |   | 4.50 | % |

----

Table of Contents

| PBOP Benefits (in      thousands)               |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|-------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Components      of net periodic benefit costs:  |   |   |   |   |   |   |   |   |   |
| Service      cost                               |   | $      | 632    |   |   | $      | 651    |   |   | $ | 599 |   |
| Interest      cost                              |   |   | 657    |   |   |   | 610    |   |   |   | 485 |   |
| Expected      return on plan assets             |   |   | (271   | )      |   |   | (189   | )      |   |   | (178 | ) |
| Other                                           |   |   | 225    |   |   |   | 225    |   |   |   | -- |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of:                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      transition obligation                  |   |   | 120    |   |   |   | 120    |   |   |   | 120 |   |
| Recognized      net loss                        |   |   | 202    |   |   |   | 342    |   |   |   | 273 |   |
| Net      Periodic Post Retirement Benefit Costs |   | $      | 1,565  |   |   | $      | 1,759  |   |   | $ | 1,299 |   |

| PBOP Benefits(in      thousands)                      |   | 2008   |   |   | 2007   |   |
|-------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Change      in prior service (credit)                 |   | $      | (3,088 | )      |   | $      | -- |   |
| Change      in net (gain) loss                        |   |   | (203   | )      |   |   | 1,074 |   |
| Amortization      of transition obligation            |   |   | (120   | )      |   |   | (120 | ) |
| Amortization      of net loss                         |   |   | (203   | )      |   |   | (342 | ) |
| Total      recognized to Regulatory (Liability) Asset |   | $      | (3,614 | )      |   | $      | 612 |   |

| Amounts      Recognized as a Regulatory Asset at December 31: |   | 2008   |   |   | 2007   |   |
|---------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Transition      obligation                                    |   | $      | --     |   |   | $      | 602 |   |
| Prior      service cost                                       |   |   | (2,606 | )      |   |   | -- |   |
| Net      (gain) loss                                          |   |   | 3,205  |   |   |   | 3,611 |   |
| Total      Recognized as a Regulatory Asset                   |   | $      | 599    |   |   | $      | 4,213 |   |

| Estimate      Benefit Cost Amortizations for the periods January 1 - December 31: |   | 2009   |   |
|-----------------------------------------------------------------------------------|--------|--------|--------|
| Amortization      of transition obligation                                        |   | $      | --     |   |
| Amortization      of prior service cost                                           |   |   | (406   | ) |
| Amortization      of net loss (gain)                                              |   |   | 208    |   |
| Total      Estimated Net Periodic Benefit Cost Amortizations                      |   | $      | (198   | ) |

| Assumed      health care cost trend rates at December 31:    |   | 2008    |   |   | 2007   |   |
|--------------------------------------------------------------|--------|---------|--------|--------|--------|--------|
|                                                         |   | Medical |   |   | Dental |   |   | Medical |   |   | Dental |   |
| Health      care cost trend rate assumed for next year (1)   |   |    | 10.0   | %      |   |   | 10.0 | % |   |   | 10.0 | % |   |   | 10.0 | % |
| Rate      to which the cost trend rate is assumed to decline |   |    | 5.0    | %      |   |   | 5.0 | % |   |   | 5.0 | % |   |   | 5.0 | % |
| Year      that the rate reaches the ultimate trend rate      |   | 2018    |   |   | 2018   |   |   | 2017 |   |   | 2017 |   |

| (in      thousands)                                          |   | 1      Percentage-Point |   |
|--------------------------------------------------------------|--------|-------------------------|--------|
|                                                         |   | Increase                |   |   | Decrease |   |
| Effect      on total of service and interest cost components |   | $                       | 219    |   |   | $ | (178 | ) |
| Effect      on post-retirement benefit obligation            |   | $                       | 868    |   |   | $ | (731 | ) |

----

Table of Contents

|              |   | 2008   |   |   | 2007   |   |
|-------------------|--------|--------|--------|--------|--------|--------|
| Equity            |   |   | 56     | %      |   |   | 44 | % |
| Fixed      Income |   |   | 44     | %      |   |   | 56 | % |
| Total             |   |   | 100    | %      |   |   | 100 | % |

| (in      thousands)          |   |   |   |
|------------------------------|--------|--------|--------|
| 2009                         |   | $      | 368    |   |
| 2010                         |   |   | 380    |   |
| 2011                         |   |   | 407    |   |
| 2012                         |   |   | 454    |   |
| 2013                         |   |   | 474    |   |
| Years      2014 – 2018 |   |   | 3,121  |   |

----

Table of Contents

| For      the Years Ended December 31: |   | 2008   |    |   | 2007                                 |   |   | 2006   |   |
|---------------------------------------|--------|--------|---------|--------|--------------------------------------|--------|--------|--------|--------|
|                                  |   | Shares |    |   | Weighted      Average Exercise Price |   |   | Shares |   |   | Weighted      Average Exercise Price |   |   | Shares |   |   | Weighted      Average Exercise Price |   |
| Options:                              |   |   |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding,      beginning of year   |   |   | 106,661 |   |                                 | $      | 24.74  |   |   |   | 180,853 |   |   | $ | 24.62 |   |   |   | 202,271 |   |   | $ | 24.04 |   |
| Granted                               |   |   | --      |   |                                 |   | --     |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |
| Forfeited                             |   |   | --      |   |                                 |   | --     |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |
| Terminated                            |   |   | --      |   |                                 |   | --     |   |   |   | (36,286 | ) |   |   | 27.71 |   |   |   | (4,456 | ) |   |   | 27.95 |   |
| Exercised                             |   |   | (11,775 | )      |                                 |   | 18.47  |   |   |   | (37,906 | ) |   |   | 21.33 |   |   |   | (16,962 | ) |   |   | 16.76 |   |
| Outstanding,      end of year         |   |   | 94,886  |   |                                 | $      | 25.52  |   |   |   | 106,661 |   |   | $ | 24.74 |   |   |   | 180,853 |   |   | $ | 24.62 |   |
|                                  |   |   |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercisable,      end of year         |   |   | 94,886  |   |                                 | $      | 25.52  |   |   |   | 106,661 |   |   | $ | 24.74 |   |   |   | 171,840 |   |   | $ | 24.39 |   |

|                  |   |   | Options      Outstanding and Exercisable |   |
|-----------------------|--------|--------|------------------------------------------|--------|
|                  |   |   | Shares                                   |   |   | Weighted      Average Remaining Contractual Life (years) |   |   | Weighted      Average Exercise Price |   |
| Range      of prices: |   |   |                                     |   |   |   |   |   |   |   |
| $18.00      - $20.99  |   |   |                                     | 14,074 |   |   |   | 1.9 |   |   | $ | 20.42 |   |
| $21.00      - $23.99  |   |   |                                     | 17,498 |   |   |   | 0.9 |   |   |   | 22.33 |   |
| $24.00      - $26.99  |   |   |                                     | 22,535 |   |   |   | 3.9 |   |   |   | 25.78 |   |
| $27.00      - $29.99  |   |   |                                     | 40,779 |   |   |   | 3.9 |   |   |   | 28.51 |   |
|                  |   |   |                                     |   | 94,886 |   |   |   | 3.1 |   |   | $ | 25.52 |   |

| For      the years ended December 31, |   | 2008                  |   |   | 2007                                        |   |
|---------------------------------------|--------|-----------------------|--------|--------|---------------------------------------------|--------|
|                                  |   | Number      of Shares |   |   | Grant      Date Weighted Average Fair Value |   |   | Number      of Shares |   |   | Grant      Date Weighted Average Fair Value |   |
| Non-vested      at beginning of year  |   |                  | 15,993 |   |                                        | $      | 25.17 |   |   |   | 26,495 |   |   | $ | 25.20 |   |
| Granted                               |   |                  | --     |   |                                        |   | -- |   |   |   | -- |   |   |   | -- |   |
| Vested                                |   |                  | (3,773 | )      |                                        |   | 25.18 |   |   |   | (8,458 | ) |   |   | 25.24 |   |
| Forfeited                             |   |                  | --     |   |                                        |   | -- |   |   |   | (2,044 | ) |   |   | 25.24 |   |
| Non-vested      at end of year        |   |                  | 12,220 |   |                                        | $      | 25.18 |   |   |   | 15,993 |   |   | $ | 25.17 |   |

| For      the years ended December 31, |   | 2008                  |   |   | 2007                                        |   |
|---------------------------------------|--------|-----------------------|--------|--------|---------------------------------------------|--------|
|                                  |   | Number      of Shares |   |   | Grant      Date Weighted Average Fair Value |   |   | Number      of Shares |   |   | Grant      Date Weighted Average Fair Value |   |
| Non-vested      at beginning of year  |   |                  | 22,703 |   |                                        | $      | 24.45 |   |   |   | 18,059 |   |   | $ | 25.90 |   |
| Granted                               |   |                  | 17,108 |   |                                        |   | 23.92 |   |   |   | 13,186 |   |   |   | 22.38 |   |
| Vested                                |   |                  | (5,126 | )      |                                        |   | 22.88 |   |   |   | (7,666 | ) |   |   | 24.26 |   |
| Forfeited                             |   |                  | (2,241 | )      |                                        |   | 24.26 |   |   |   | (876 | ) |   |   | 24.93 |   |
| Non-vested      at end of year        |   |                  | 32,444 |   |                                        | $      | 24.43 |   |   |   | 22,703 |   |   | $ | 24.45 |   |

----

Table of Contents

| (in      thousands)                       |   | Revenues |   |   | Depreciation |   |   | Other      Operating Expenses |   |   | Other      Income (Deductions) |   |   | Interest      Expense (net of AFUDC) |   |   | Income      Taxes |   |   | Income      (Loss) from Continuing Operations |   |
|-------------------------------------------|--------|----------|--------|--------|--------------|--------|--------|-------------------------------|--------|--------|--------------------------------|--------|--------|--------------------------------------|--------|--------|-------------------|--------|--------|-----------------------------------------------|--------|
| For      the year ended December 31, 2008 |   |     |   |   |         |   |   |                          |   |   |                           |   |   |                                 |   |   |              |   |   |                                          |   |
| Water      Activities                     |   | $        | 62,288 |   |         | $      | 6,438  |                          |   | $      | 38,027                         |   |   | $                                    | (326   | )      |              | $      | 5,075  |                                          |   | $ | 3,628 |   |   | $ | 8,794 |   |
| Real      Estate Transactions             |   |     | --     |   |         |   | --     |                          |   |   | --                             |   |   |                                 | --     |   |              |   | --     |                                          |   |   | 160 |   |   |   | (160 | ) |
| Services      and Rentals                 |   |     | 4,855  |   |         |   | 23     |                          |   |   | 3,596                          |   |   |                                 | --     |   |              |   | (6     | )                                             |   |   | 452 |   |   |   | 790 |   |
| Total                                     |   | $        | 67,143 |   |         | $      | 6,461  |                          |   | $      | 41,623                         |   |   | $                                    | (326   | )      |              | $      | 5,069  |                                          |   | $ | 4,240 |   |   | $ | 9,424 |   |
| For      the year ended December 31, 2007 |   |     |   |   |         |   |   |                          |   |   |                           |   |   |                                 |   |   |              |   |   |                                          |   |   |   |   |   |   |   |   |
| Water      Activities                     |   | $        | 60,025 |   |         | $      | 6,525  |                          |   | $      | 35,755                         |   |   | $                                    | (1,641 | )      |              | $      | 4,281  |                                          |   | $ | 3,860 |   |   | $ | 7,963 |   |
| Real      Estate Transactions             |   |     | 227    |   |         |   | --     |                          |   |   | 101                            |   |   |                                 | --     |   |              |   | --     |                                          |   |   | (41 | ) |   |   | 167 |   |
| Services      and Rentals                 |   |     | 4,411  |   |         |   | 25     |                          |   |   | 3,304                          |   |   |                                 | --     |   |              |   | 20     |                                          |   |   | 411 |   |   |   | 651 |   |
| Total                                     |   | $        | 64,663 |   |         | $      | 6,550  |                          |   | $      | 39,160                         |   |   | $                                    | (1,641 | )      |              | $      | 4,301  |                                          |   | $ | 4,230 |   |   | $ | 8,781 |   |
| For      the year ended December 31, 2006 |   |     |   |   |         |   |   |                          |   |   |                           |   |   |                                 |   |   |              |   |   |                                          |   |   |   |   |   |   |   |   |
| Water      Activities                     |   | $        | 47,927 |   |         | $      | 5,881  |                          |   | $      | 32,166                         |   |   | $                                    | (598   | )      |              | $      | 3,969  |                                          |   | $ | 1,183 |   |   | $ | 4,130 |   |
| Real      Estate Transactions             |   |     | 1,002  |   |         |   | --     |                          |   |   | 359                            |   |   |                                 | --     |   |              |   | --     |                                          |   |   | (1,420 | ) |   |   | 2,063 |   |
| Services      and Rentals                 |   |     | 4,092  |   |         |   | 36     |                          |   |   | 3,189                          |   |   |                                 | --     |   |              |   | 8      |                                          |   |   | 344 |   |   |   | 515 |   |
| Total                                     |   | $        | 53,021 |   |         | $      | 5,917  |                          |   | $      | 35,714                         |   |   | $                                    | (598   | )      |              | $      | 3,977  |                                          |   | $ | 107 |   |   | $ | 6,708 |   |

| At      December 31 (in thousands):     |   | 2008   |    |   | 2007   |   |
|-----------------------------------------|--------|--------|---------|--------|--------|--------|
| Total      Plant and Other Investments: |   |   |    |   |   |   |
| Water                                   |   | $      | 304,591 |   |   | $      | 283,641 |   |
| Non-Water                               |   |   | 676     |   |   |   | 673 |   |
| Total      Plant and Other Investments  |   |   | 305,267 |   |   |   | 284,314 |   |
|                                    |   |   |    |   |   |   |   |   |
| Other      Assets:                      |   |   |    |   |   |   |   |   |
| Water                                   |   |   | 64,734  |   |   |   | 73,421 |   |
| Non-Water                               |   |   | 2,430   |   |   |   | 3,078 |   |
| Total      Other Assets                 |   |   | 67,164  |   |   |   | 76,499 |   |
| Total      Assets                       |   | $      | 372,431 |   |   | $      | 360,813 |   |

----

Table of Contents

----

Table of Contents

|                                                               |   | First      Quarter |   |   | Second      Quarter |   |   | Third      Quarter |   |   | Fourth      Quarter |   |
|--------------------------------------------------------------------|--------|--------------------|--------|--------|---------------------|--------|--------|--------------------|--------|--------|---------------------|--------|
|                                                               |   | 2008               |   |   | 2007                |   |   | 2008               |   |   | 2007                |   |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |
| Operating      Revenues                                            |   | $                  | 13,569 |   |                | $      | 13,162 |               |   | $      | 16,020              |   |   | $ | 14,446 |   |   | $ | 17,040 |   |   | $ | 16,951 |   |   | $ | 14,641 |   |   | $ | 14,467 |   |
| Total      Utility Operating Income                                |   |               | 2,812  |   |                |   | 2,412  |               |   |   | 3,982               |   |   |   | 2,969 |   |   |   | 3,994 |   |   |   | 5,021 |   |   |   | 3,187 |   |   |   | 2,852 |   |
| Income      from Continuing Operations                             |   |               | 1,705  |   |                |   | 1,475  |               |   |   | 2,951               |   |   |   | 1,862 |   |   |   | 2,835 |   |   |   | 3,899 |   |   |   | 1,933 |   |   |   | 1,545 |   |
| Net      Income                                                    |   |               | 1,705  |   |                |   | 1,475  |               |   |   | 2,951               |   |   |   | 1,862 |   |   |   | 2,835 |   |   |   | 3,899 |   |   |   | 1,933 |   |   |   | 1,545 |   |
| Basic      Earnings per Common Share – Continuing Operations |   |               | 0.20   |   |                |   | 0.18   |               |   |   | 0.35                |   |   |   | 0.22 |   |   |   | 0.34 |   |   |   | 0.47 |   |   |   | 0.23 |   |   |   | 0.19 |   |
| Basic      Earnings per Common Share                               |   |               | 0.20   |   |                |   | 0.18   |               |   |   | 0.35                |   |   |   | 0.22 |   |   |   | 0.34 |   |   |   | 0.47 |   |   |   | 0.23 |   |   |   | 0.19 |   |

----

Table of Contents

| ExhibitNumber |  Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1           | Certificate      of Incorporation of Connecticut Water Service, Inc. amended and restated      as of April, 1998. (Exhibit 3.1 to Form 10-K for the year ended      12/31/98).                                                                                                                                                                                                                                                                                                                                                          |
| 3.2           | By-Laws,      as amended, of Connecticut Water Service, Inc. as amended and restated as      of August 17, 2007. (Exhibit 3.1 to Form 8-K filed on August 21,      2007).                                                                                                                                                                                                                                                                                                                                                               |
| 3.3           | Certification      of Incorporation of The Connecticut Water Company effective April, 1998.      (Exhibit 3.3 to Form 10-K for the year ended 12/31/98).                                                                                                                                                                                                                                                                                                                                                                                |
| 3.4           | Certificate      of Amendment to the Amended and Restated Certificate of Incorporation of      Connecticut Water Service, Inc. dated August 6, 2001. (Exhibit 3.4 to Form      10-K for the year ended 12/31/01).                                                                                                                                                                                                                                                                                                                       |
| 3.5           | Certificate      of Amendment to the Amended and Restated Certificate of Incorporation of      Connecticut Water Service, Inc. dated April 23, 2004. (Exhibit 3.5 to Form      10-Q for the quarter ended 3/31/03).                                                                                                                                                                                                                                                                                                                     |
| 4.1           | Loan      Agreement dated as of October 1, 2003 between the Connecticut Development      Authority and The Connecticut Water Company. (Exhibit 4.12 to Form 10-K      for the year ended 12/31/03).                                                                                                                                                                                                                                                                                                                                     |
| 4.2           | Indenture      of Trust dated as of October 1, 2003 between the Connecticut Development      Authority and The Connecticut Water Company. (Exhibit 4.13 to Form 10-K      for the year ended 12/31/03).                                                                                                                                                                                                                                                                                                                                 |
| 4.3           | Loan      Agreement dated as of October 1, 2003 between the Connecticut Development      Authority and The Connecticut Water Company. (Exhibit 4.14 to Form 10-K      for the year ended 12/31/03).                                                                                                                                                                                                                                                                                                                                     |
| 4.4           | Indenture      of Trust dated as of October 1, 2003 between the Connecticut Development      Authority and The Connecticut Water Company.  (Exhibit 4.15 to      Form 10-K for the year ended 12/31/03).                                                                                                                                                                                                                                                                                                                      |
| 4.5           | Bond      Purchase Agreement dated as of October 10, 2003 among Connecticut      Development Authority, The Connecticut Water Company and A.G. Edwards and      Sons, Inc.  (Exhibit 4.16 to Form 10-K for the year ended      12/31/03).                                                                                                                                                                                                                                                                                     |
| 4.6           | Line      of Credit Agreement dated as of March 12, 2004 between Webster Bank and      Connecticut Water Service, Inc. (Exhibit 4.17 to Form 10-Q for the quarter      ended 3/31/04).                                                                                                                                                                                                                                                                                                                                                  |
| 4.7           | Bond      Purchase Agreement dated as of March 12, 2004, among The Connecticut Water      Company and A.G. Edwards & Sons, Inc. (Exhibit 4.18 to Form 10-Q for      the quarter ended 3/31/04).                                                                                                                                                                                                                                                                                                                                     |
| 4.8           | Indenture      of Trust, dated as of March 1, 2004, between The Connecticut Water Company      and U.S. Bank National Association, as Trustee.  (Exhibit 4.19      to Form 10-Q for the quarter ended 3/31/04).                                                                                                                                                                                                                                                                                                               |
| 4.9           | Reimbursement      and Credit Agreement, dated as of March 1, 2004, between The Connecticut      Water Company and Citizen’s Bank of Rhode Island. (Exhibit 4.20 to Form      10-Q for the quarter ended 3/31/04).                                                                                                                                                                                                                                                                                                                |
| 4.10          | Letter      of Credit issued by Citizen’s Bank of Rhode Island, dated as of March 4,      2004.  (Exhibit 4.21 to Form 10-Q for the quarter ended      3/31/04).                                                                                                                                                                                                                                                                                                                                                        |
| 4.11          | Agreement      No. DWSRF 200103-C Project Loan Agreement between the State of Connecticut      and Unionville Water Company under the Drinking Water State Revolving Fund      (DWSRF) Program, dated as of April 19, 2004.  (Exhibit 4.22 to      Form 10-Q for the quarter ended 6/30/04).                                                                                                                                                                                                                                  |
| 4.12          | Collateral      Assignment of Water Service Charges and Right to Receive Water Service      Expense Assessments and Security Agreement between Unionville Water      Company and the State of Connecticut, dated as of June 3,      2004.  (Exhibit 4.23 to Form 10-Q for the quarter ended      6/30/04).                                                                                                                                                                                                                    |
| 4.13          | Bond      Purchase Agreement, dated September 1, 2004, among The Connecticut Water      Company, Connecticut Development Authority, and A.G. Edwards & Sons,      Inc.  (Exhibit 4.24 to Form 10-Q for the quarter ended      9/30/04).                                                                                                                                                                                                                                                                                   |
| 4.14          | Indenture      of Trust, dated August 1, 2004, between The Connecticut Water Company and      U.S. Bank National Association, as Trustee, 2004A      Series.  (Exhibit 4.25 to Form 10-Q for the quarter ended      9/30/04).                                                                                                                                                                                                                                                                                                 |
| 4.15          | Indenture      of Trust, dated August 1, 2004, between The Connecticut Water Company and      U.S. Bank National Association, as Trustee, 2004B      Series.  (Exhibit 4.26 to Form 10-Q for the quarter ended      9/30/04).                                                                                                                                                                                                                                                                                                 |
| 4.16          | Loan      Agreement, dated August 1, 2004, between The Connecticut Water Company and      Connecticut Development Authority for 2004 Series.  (Exhibit      4.27 to Form 10-Q for the quarter ended 9/30/04).                                                                                                                                                                                                                                                                                                                 |
| 4.17          | Loan      Agreement, dated August 1, 2004, between The Connecticut Water Company and      Connecticut Development Authority for 2004B Series.  (Exhibit      4.28 to Form 10-Q for the quarter ended 9/30/04).                                                                                                                                                                                                                                                                                                                |
| 4.18          | Reimbursement      and Credit Agreement, dated as of August 1, 2004, between The Connecticut      Water Company and Citizen’s Bank of Rhode Island, 2004A      Series.  (Exhibit 4.29 to Form 10-Q for the quarter ended      9/30/04).                                                                                                                                                                                                                                                                                 |
| 4.19          | Reimbursement      and Credit Agreement, dated as of August 1, 2004, between The Connecticut      Water Company and Citizen’s Bank of Rhode Island, 2004B      Series.  (Exhibit 4.30 to Form 10-Q for the quarter ended      9/30/04).                                                                                                                                                                                                                                                                                 |
| 4.20          | Letters      of Credit, each dated September 2, 2004, between The Connecticut Water      Company and Citizen’s Bank of Rhode Island, with respect to each of the      2004A and 2004B Series Bonds.  (Exhibit 4.31 to Form 10-Q for      the quarter ended 9/30/04).                                                                                                                                                                                                                                                    |
| 4.21          | Bond      Purchase Agreement, dated October 28, 2005, among The Connecticut Water      Company, Connecticut Development Authority and A.G. Edwards & Sons,      Inc., Connecticut Water 2005A Series. (Exhibit 4.24 to Form 10-K for the      year ended 12/31/05).                                                                                                                                                                                                                                                                 |
| 4.22          | Loan      Agreement, dated October 1, 2005, between The Connecticut Water Company      and Connecticut Development Authority, Connecticut Water 2005A Series.      (Exhibit 4.25 to Form 10-K for the year ended12/31/05).                                                                                                                                                                                                                                                                                                              |
| 4.23          | Indenture      of Trust, dated October 1, 2005, between Connecticut Development Authority      and U.S. Bank National Association, as Trustee, Connecticut Water 2005A      Series. (Exhibit 4.26 to Form 10-K for the year ended      12/31/05).                                                                                                                                                                                                                                                                                       |
| 4.24          | Insurance      Agreement, dated November 30, 2005, between The Connecticut Water Company      and Financial Guaranty Insurance Company, as Insurer for The Connecticut      Water 2005A Series. (Exhibit 4.27 to Form 10-K for the year ended      12/31/05).                                                                                                                                                                                                                                                                           |
| 4.25          | Bond      Purchase Agreement, dated November 16, 2005, among The Crystal Water      Company of Danielson, Connecticut Water Service, Inc., Connecticut      Development Authority and A.G. Edwards & Sons, Inc., Crystal Water      2005A Series. (Exhibit 4.28 to Form 10-K for the year ended      12/31/05).                                                                                                                                                                                                                     |
| 4.26          | Guaranty      dated as of October 1, 2005 from Connecticut Water Service, Inc. to U.S.      Bank National Association, as Trustee, Crystal Water 2005A Series.      (Exhibit 4.29 to Form 10-K for the year ended12/31/05).                                                                                                                                                                                                                                                                                                             |
| 4.27          | Loan      Agreement, dated October 1, 2005, between The Crystal Water Company of      Danielson and Connecticut Development Authority, Crystal Water 2005A      Series. (Exhibit 4.30 to Form 10-K for the year ended      12/31/05).                                                                                                                                                                                                                                                                                                   |
| 4.28          | Indenture      of Trust, dated October 1, 2005, between Connecticut Development Authority      and U.S. Bank National Association, as Trustee, Crystal Water 2005A      Series. (Exhibit 4.31 to Form 10-K for the year ended      12/31/05).                                                                                                                                                                                                                                                                                           |
| 4.29          | Insurance      Agreement, dated November 30, 2005, between The Crystal Water Company of      Danielson and Financial Guaranty Insurance Company, as Insurer for the      Crystal Water 2005A Series. (Exhibit 4.32 to Form 10-K for the year ended      12/31/05).                                                                                                                                                                                                                                                                      |
| 4.30          | First      Amendment to Reimbursement and Credit Agreement, dated as of April 28,      2006, between The Connecticut Water Company and Citizen’s Bank of Rhode      Island, 2004A Series.  (Exhibit 10.1 to Form 10-Q for the period      ending 3/31/06).                                                                                                                                                                                                                                                              |
| 4.31          | First      Amendment to Reimbursement and Credit Agreement, dated as of April 28,      2006, between The Connecticut Water Company and Citizen’s Bank of Rhode      Island, 2004B Series.  (Exhibit 10.2 to Form 10-Q for the period      ending 3/31/06).                                                                                                                                                                                                                                                              |
| 4.32          | First      Amendment to Reimbursement and Credit Agreement, dated as of April 28,      2006, between The Connecticut Water Company and Citizen’s Bank of Rhode      Island, 2004 Series Variable Rate, due 2029. (Exhibit 10.3 to Form 10-Q      for the period ending 3/31/06).                                                                                                                                                                                                                                                  |
| 4.33          | Bond      Purchase Agreement, dated December 5, 2007, among The Connecticut Water      Company, Connecticut Development Authority, and Edward Jones and Company,      L.P. water facilities Revenue Bonds – 2007A Series      (AMT).  (Exhibit 4.33 to Form 10-K for the year ended      12/31/07)                                                                                                                                                                                                                      |
| 4.34          | Loan      Agreement dated as of December 5, 2007, among The Connecticut Water      Company, and Connecticut Development Authority, Water Facilities Revenue      Bonds – 2007A Series (AMT).  (Exhibit 4.34 to Form 10-K for the      year ended 12/31/07)                                                                                                                                                                                                                                                              |
| 4.35          | Indenture      of Trust dated as of December 5, 2007, among The Connecticut Water      Company, and Connecticut Development Authority, Water Facilities Revenue      Bonds – 2007A Series (AMT).  (Exhibit 4.35 to Form 10-K for the      year ended 12/31/07)                                                                                                                                                                                                                                                          |
| 10.1          | Pension      Plan Fiduciary Liability Insurance for The Connecticut Water Company      Employees' Retirement Plan and Trust, Savings Plan of The Connecticut      Water Company and The Connecticut Water Company VEBA Trust      Fund.  (Exhibit 10.1 to Registration Statement No.      2-74938).                                                                                                                                                                                                                           |
| 10.2          | Directors      and Officers Liability and Corporation Reimbursement      Insurance.  (Exhibit 10.2 to Registration Statement No.      2-74938).                                                                                                                                                                                                                                                                                                                                                                               |
| 10.3          | Directors      Deferred Compensation Plan, effective as of January 1, 1980, as amended as      of January 1, 2008.  (Exhibit 10.7 to Form 8-K filed on January      30, 2008).                                                                                                                                                                                                                                                                                                                                                |
| 10.4          | Savings      Plan of The Connecticut Water Company, amended and restated effective as      of October 1, 2000. (Exhibit 10.12 to Form 10-K for the year ended      12/31/01).                                                                                                                                                                                                                                                                                                                                                           |
| 10.4a         | Trust      Agreement between Connecticut Water Company and Riggs Bank N.A., Trustee,      dated as of June 1, 2002.  (Exhibit 10.12.1 to Form 10-K for the      year ended 12/31/03).                                                                                                                                                                                                                                                                                                                                         |
| 10.4b         | Post-EGTRRA      Amendment to the Savings Plan of The Connecticut Water Company, effective      January 1, 2002.  (Exhibit 10.12.2 to Form 10-K for the year      ended 12/31/03).                                                                                                                                                                                                                                                                                                                                            |
| 10.4c         | Supplemental      Participation Agreement to the Savings Plan of The Connecticut Water      Company between The Unionville Water Company and Connecticut Water      Company, dated December 30, 2003.  (Exhibit 10.12.3 to Form 10-K      for the year ended 12/31/03).                                                                                                                                                                                                                                                       |
| 10.4d         | Supplemental      Participation Agreement to the Savings Plan of The Connecticut Water      Company between The Crystal Water Company of Danielson and Connecticut      Water Company, dated December 30, 2003.  (Exhibit 10.12.4 to      Form 10-K for the year ended 12/31/03).                                                                                                                                                                                                                                             |
| 10.4e         | Supplemental      Participation Agreement to the Savings Plan of The Connecticut Water      Company between Unionville Water Company and Connecticut Water Company,      dated February 23, 2004.  (Exhibit 10.12.5 to Form 10-K for the      year ended 12/31/04).                                                                                                                                                                                                                                                           |
| 10.4f*        | Nonstandardized      Adoption Agreement Prototype Cash or Deferred Profit-Sharing      Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.5          | The      Connecticut Water Company Employees’ Retirement Plan as amended and      restated as of January 1, 1997.  (Exhibit 10.11 to Form 10-K for      the year ended 12/31/98).                                                                                                                                                                                                                                                                                                                                       |
| 10.5a         | First      Amendment, dated August 16, 2000 to the amended and restated Connecticut      Water Company Employees’ Retirement Plan effective January 1,      1997.  (Exhibit 10.13.1 to Form 10-K for the year ended      12/31/02).                                                                                                                                                                                                                                                                                     |
| 10.5b         | Second      Amendment, dated November 14, 2000 to the amended and restated Connecticut      Water Company Employees’ Retirement Plan effective January 1, 1997.      (Exhibit 10.13.2 to Form 10-K for the year ended  12/31/02).                                                                                                                                                                                                                                                                                                 |
| 10.5c         | Third      Amendment, dated November 14, 2001 to the amended and restated Connecticut      Water Company Employees’ Retirement Plan effective January 1, 1997.      (Exhibit 10.13.3 to Form 10-K for the year ended  12/31/02).                                                                                                                                                                                                                                                                                                  |
| 10.5d         | Fourth      Amendment, dated August 14, 2002 to the amended and restated Connecticut      Water Company Employees’ Retirement Plan effective January 1, 1997.      (Exhibit 10.13.4 to Form 10-K for the year ended  12/31/02).                                                                                                                                                                                                                                                                                                   |
| 10.5e         | Fifth      Amendment, dated August 14, 2002 to the amended and restated Connecticut      Water Company Employees’ Retirement Plan effective January 1,      1997.  (Exhibit 10.13.5 to Form 10-K for the year ended      12/31/02).                                                                                                                                                                                                                                                                                     |
| 10.5f         | Sixth      Amendment, dated November 10, 2003 to the amended and restated Connecticut      Water Company Employees’ Retirement Plan effective November 12,      2003.  (Exhibit 10.13.6 to Form 10-K for the year ended      12/31/03).                                                                                                                                                                                                                                                                                 |
| 10.5g         | Seventh      Amendment, dated May 12, 2004 to the amended and restated Connecticut      Water Employees’ Retirement Plan effective January 1,      1997.  (Exhibit 10.13.7 to Form 10-K for the year ended      12/31/04).                                                                                                                                                                                                                                                                                              |
| 10.5h         | Eighth      Amendment, effective March 28, 2005, to the amended and restated      Connecticut Water Company Employees’ Retirement Plan effective January 1,      1997.  (Exhibit 10.5h to Form 10-K for the year ended      12/31/07).                                                                                                                                                                                                                                                                                  |
| 10.5i         | Ninth      Amendment, effective August 9, 2006, to the amended and restated      Connecticut Water Company Employees’ Retirement Plan effective January 1,      1997.  (Exhibit 10.5i to Form 10-K for the year ended      12/31/07).                                                                                                                                                                                                                                                                                   |
| 10.5j         | Tenth      Amendment, effective January 1, 2008, to the amended and restated      Connecticut Water Company Employees’ Retirement plan effective January 1,      1997.  (Exhibit 10.1 to Form 8-K dated  1/13/09).                                                                                                                                                                                                                                                                                                      |
| 10.5k         | Eleventh      Amendment, effective January 1, 2009, to the amended and restated      Connecticut Water Company Employees’ Retirement Plan effective January 1,      1997.  (Exhibit 10.2 to Form 8-K dated  1/13/09).                                                                                                                                                                                                                                                                                                   |
| 10.6          | November      4, 1994 Amendment to Agreement dated December 11, 1957 between The      Connecticut Water Company (successor to the Thomaston Water Company) and      the City of Waterbury.  (Exhibit 10.16 to Form 10-K for year      ended 12/31/94).                                                                                                                                                                                                                                                                        |
| 10.7          | Agreement      dated August 13, 1986 between The Connecticut Water Company and the      Metropolitan District.  (Exhibit 10.14 to Form 10-K for the year      ended 12/31/86).                                                                                                                                                                                                                                                                                                                                                |
| 10.8          | Report      of the Commission to Study the Feasibility of Expanding the Water Supply      Services of the Metropolitan District.  (Exhibit 14 to      Registration Statement No. 2-61843).                                                                                                                                                                                                                                                                                                                                    |
| 10.9          | Bond      Exchange Agreements between Connecticut Water Service, Inc., The      Connecticut Water Company Bankers Life Company and Connecticut Mutual Life      Insurance Company dated October 23, 1978.  (Exhibit 14 to      Form 10-K for the year ended 12/31/78).                                                                                                                                                                                                                                                   |
| 10.10         | Dividend      Reinvestment and Common Stock Purchase Plan, as amended and restated as of      August 19, 2008.  (Exhibit 4 to Form S-3, Registration Statement      No. 333-153910, filed on October 8, 2008).                                                                                                                                                                                                                                                                                                                |
| 10.11         | Contract      for Supplying Bradley International Airport.  (Exhibit 10.21 to      Form 10-K for the year ended 12/31/84).                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.12         | Report      of South Windsor Task Force.  (Exhibit 10.23 to Form 10-K for      the year ended 12/31/87).                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.13         | Trust      Agreement for The Connecticut Water Company Welfare Benefits Plan (VEBA)      dated January 1, 1989.  (Exhibit 10.21 to Form 10-K for year      ended 12/31/89).                                                                                                                                                                                                                                                                                                                                                   |
| 10.14         | 1994      Performance Stock Program, as amended and restated as of April 26, 2002.      (Exhibit A to Proxy Statement dated 3/19/02).                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.14a        | First      Amendment to The Connecticut Water Service, Inc. Performance Stock Program      Amended and Restated as of April 26, 2002 (the “Plan”) dated December 1,      2005. (Exhibit      10.22a to Form 10-K for the year ended12/31/05).                                                                                                                                                                                                                                                                               |
| 10.14b        | Second      Amendment to The Connecticut Water Service, Inc. Performance Stock Program      Amended and Restated as of April 26, 2002 (the “Plan”) dated January 1,      2008. (Exhibit 10.5 to 8-K filed on 1/30/08).                                                                                                                                                                                                                                                                                                      |
| 10.15         | 2004      Performance Stock Program, as of April 23, 2004.  (Appendix A to      Proxy Statement dated 3/12/04).                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.15a        | First      Amendment to The Connecticut Water Service, Inc. 2004 Performance Stock      Program, dated January 7, 2004. (Exhibit 10.23f to Form 10-K for the year      ended 12/31/05).                                                                                                                                                                                                                                                                                                                                                 |
| 10.15b        | Second      Amendment to The Connecticut Water Service, Inc. 2004 Performance Stock      Program, dated January 1, 2008. (Exhibit 10.6 to Form 8-K filed on      1/30/08).                                                                                                                                                                                                                                                                                                                                                              |
| 10.15c        | Connecticut      Water Service, Inc. Performance Stock Program Incentive Stock Option Grant      Form.  (Exhibit 10.1 to Form 10-Q for the quarter ended      9/30/04).                                                                                                                                                                                                                                                                                                                                                       |
| 10.15d        | Connecticut      Water Service, Inc. Performance Stock Program Non-Qualified Stock Option      Grant Form.  (Exhibit 10.2 to Form 10-Q for the quarter ended      9/30/04).                                                                                                                                                                                                                                                                                                                                                   |
| 10.15e        | Restricted      Stock Agreement, standard form for officers, dated December 1, 2005      (Exhibit 10.1 to Form 8-K dated 1/13/06).                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.15f        | Long-Term      Performance Award Agreement, standard form for officers, dated January 11,      2006 (Exhibit 10.2 to Form 8-K dated 1/13/06).                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.15g        | Performance      Award Agreement, standard form for officers, dated January 11, 2006      (Exhibit 10.3 to Form 8-K dated 1/13/06).                                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.16         | Settlement      Agreement between Connecticut Water Company, Mary J. Healey, Office of      Consumer Counsel of the State of Connecticut, and the Prosecutorial Staff      of the DPUC, dated December 4, 2006.  (Exhibit 10.1 to Form 8-K      dated 12/6/06).                                                                                                                                                                                                                                                               |
| 10.16a        | Revised      Settlement Agreement between Connecticut Water Company, Mary J. Healey,      Office of Consumer Counsel of the State of Connecticut, and the      Prosecutorial Staff of the DPUC, dated December 20,      2006.  (Exhibit 99.1 to Form 8-K dated  1/18/07).                                                                                                                                                                                                                                                     |
| 10.16b        | Final      Decision of the Connecticut DPUC, Docket No. 06-07-08, dated January 16,      2007. (Exhibit 99.2 to Form 8-K dated 1/18/07).                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.16c        | Final      Decision of the Connecticut DPUC, Docket No. 06-07-08, dated March 28,      2008. (Exhibit 99.1 to Form 8-K dated 4/3/08).                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.17         | Connecticut      Water Service, Inc. and Subsidiaries Employee Code of Conduct, January 24,      2008.                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.18         | Stock      Purchase Agreement between The Connecticut Water Company and Ellington      Acres Company and the shareholders of Ellington Acres Company, dated as of      July 21, 2008 (Exhibit 10.1 to Form 10-Q for the quarter ended June 30,      2008).                                                                                                                                                                                                                                                                              |
| 10.19*        | Form      of Amended Restated Employment Agreement with the Company’s executive      officers, including:a)  Peter      J. Bancroftb)  David      C. Benoitc)  Thomas      R. Marstond)  Terrance      P. O’Neille)  Eric      W. Thornburgf)  Maureen      P. Westbrook                                                                                                                                                                                        |
| 10.20*        | Form      of Amended Restated Employment Agreement with the Company’s executive      officers, including:a)  Kristen      A. Johnsonb)  Daniel      J. Meaneyc)  Nicholas      A. Rinaldi                                                                                                                                                                                                                                                                                                           |
| 10.21*        | Form      of Amended and Restated Supplemental Executive Retirement Agreement with      the Company’s executive officers, including:a)  Peter      J. Bancroftb)  David      C. Benoitc)  Kristen      A. Johnsond)  Thomas      R. Marstone)  Daniel      J. Meaneyf)  Terrance      P. O’Neillg)  Nicholas      A. Rinaldih)  Eric      W. Thornburgi)  Maureen      P. Westbrook                                               |
| 10.22         | Form      of Amended and Restated Deferred Compensation Agreement with the Company’s      executive officers (Exhibit 10.3 to Form 8-K filed on January 30, 2008),      including:a)  Peter      J. Bancroftb)  David      C. Benoitc)  Kristen      A. Johnsond)  Thomas      R. Marstone)  Daniel      J. Meaneyf)  Terrance      P. O’Neillg)  Nicholas      A. Rinaldih)  Eric      W. Thornburgi)  Maureen      P. Westbrook |
| 21*           | Connecticut      Water Service, Inc. Subsidiaries Listing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 23.1*         | Consent      of Independent Registered Public Accounting Firm.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 31.1*         | Rule      13a-14 Certification of Eric W. Thornburg, Chief Executive      Officer.                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 31.2*         | Rule      13a-14 Certification of David C. Benoit, Chief Financial      Officer.                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 32.1*         | Certification      of Eric W. Thornburg, Chief Executive Officer, pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                       |
| 32.2*         | Certification      of David C. Benoit, Chief Financial Officer, pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                         |
| Note:         | Exhibits      10.1 through 10.5k, 10.13 through 10.15g, and 10.19 through 10.22 set      forth each management contract or compensatory plan or arrangement      required to be filed as an exhibit to this Form  10-K.                                                                                                                                                                                                                                                                                                                 |

----

Table of Contents

SIGNA

|                | CONNECTICUT      WATER SERVICE, INC.Registrant                                                                                     |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------|
| March      13, 2009 | By  /s/   Eric      W. ThornburgEric      W. ThornburgChairman,      President and Chief ExecutiveOfficer |

| Signature                                                               |   | Title                                                                                                         |   | Date                |
|-------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|---------------------|
| /s/   Eric      W. ThornburgEric      W. Thornburg  |   | Chairman,      President, and Chief Executive Officer (Principal Executive      Officer)                      |   | March      13, 2009 |
| /s/   David      C. BenoitDavid      C. Benoit      |   | Vice      President – Finance, Chief Financial Officer and Treasurer (Principal      Financial Officer) |   | March      13, 2009 |
| /s/   Nicholas      A. RinaldiNicholas      A. Rinaldi   |   | Controller      (Principal Accounting Officer)                                                                |   | March      13, 2009 |

----

Table of Contents

| Signature                                                             |   | Title    |   | Date                |
|-----------------------------------------------------------------------|--------|----------|--------|---------------------|
| /s/   Mary      Ann HanleyMary      Ann Hanley    |   | Director |   | March      11, 2009 |
| /s/   Heather      HuntHeather      Hunt          |   | Director |   | March      11, 2009 |
| /s/   Mark      G. KachurMark      G. Kachur      |   | Director |   | March      11, 2009 |
| /s/   David      A. LentiniDavid      A. Lentini  |   | Director |   | March      11, 2009 |
| /s/   Arthur      C. ReedsArthur      C. Reeds    |   | Director |   | March      11, 2009 |
| /s/   Lisa      J. ThibdaueLisa      J. Thibdaue  |   | Director |   | March      11, 2009 |
| /s/   Carol      P. WallaceCarol      P. Wallace  |   | Director |   | March      11, 2009 |
| /s/   Donald      B. WilburDonald      B. Wilbur  |   | Director |   | March      11, 2009 |

----

Table of Contents

| Description                               |   | Balance      Beginning of Year |   |   | Additions      Charged to Income |   |   | Deductions      From Reserves(1) |   |   | Balance      End of Year |   |
|-------------------------------------------|--------|--------------------------------|--------|--------|----------------------------------|--------|--------|----------------------------------|--------|--------|--------------------------|--------|
| Allowance      for Uncollectible Accounts |   |                           |   |   |                             |   |   |                             |   |   |                     |   |
| Year      Ended December 31, 2008         |   | $                              | 352    |   |                             | $      | 286    |                             |   | $      | 262                      |   |   | $ | 376 |   |
| Year      Ended December 31, 2007         |   | $                              | 285    |   |                             | $      | 265    |                             |   | $      | 198                      |   |   | $ | 352 |   |
| Year      Ended December 31, 2006         |   | $                              | 256    |   |                             | $      | 225    |                             |   | $      | 196                      |   |   | $ | 285 |   |

----

Table of Contents