OREANDA-NEWS. Connecticut Water Service, Inc. (NASDAQ GS: CTWS) announced Net Income of $23.4 million, or earnings per basic average share (EPS) of $2.12, on total revenues of $105.3 million in 2016. Total revenues include revenues generated by the Company’s three business segments: Water Operations, Service and Rentals, and Real Estate. In 2015, the Company had Net Income of $22.8 million, or $2.07 EPS, on total revenues of $103.1 million.

Net Income in the Company’s core business, the Water Operations segment, was $22.2 million, on revenues of $100.0 million. In 2015, Net Income from the segment totaled $21.0 million, on revenues of $97.5 million. The increase in revenues was related to recovery of costs for completed infrastructure replacement projects through the Water Infrastructure and Conservation Adjustment (WICA) in Connecticut and the Water Infrastructure Charge (WISC) in Maine, as well as a general rate increase in Maine Water’s Biddeford Saco division.

A significant driver of the increased earnings was an 8% decrease in Operation and Maintenance expenses in 2016. The decrease was largely related to declines in pension and other compensation benefits, post-retirement medical expenses, use of outside services, and continued focus on cost savings measures and improved efficiency.


On February 27, 2017, the Company completed the acquisition of the Heritage Village Water Company (HVWC) in a transaction with a total enterprise value of $20.7 million. HVWC serves approximately 4,700 water and 3,000 wastewater customers in the communities of Middlebury, Oxford, and Southbury, Connecticut. The wastewater operation is the only wastewater utility in the state regulated by the Connecticut Public Utilities Regulatory Authority (PURA). With the addition of HVWC, CTWS, through its regulated water utility subsidiaries serves more than 129,000 customers, or nearly 440,000 people in 79 communities across Connecticut and Maine, and more than 3,000 wastewater customers in Southbury, Connecticut.

On October 11, 2016, the Company entered into an agreement to acquire The Avon Water Company (AWC) in a transaction that reflects a total enterprise value of $36.6 million. AWC serves approximately 4,800 water customers in the communities of Avon, Farmington and Simsbury. A decision by PURA on the proposed acquisition is expected in the second quarter with a closing to follow shortly thereafter.

Since January 2012, CTWS has grown its customer base by more than 44%, or nearly 40,000 customers, primarily through large acquisitions in both Maine and Connecticut.

Dividend Increase

On May 13, 2016, CTWS’s Board of Directors approved an increase of 5.6% in its annualized cash dividend, raising the quarterly amount to $0.2825 per share on the Company’s common stock, for an annualized dividend of $1.13. This increase also accelerated the timing of the annual increase which has historically occurred in the third quarter of the year. The acceleration, coupled with the dividend, resulted in a 6.2% increase in 2016 dividends versus 2015. A quarterly cash dividend payment of $0.2825 per common share will be paid to shareholders on March 15, 2017, for shareholders of record as of March 1, 2017.


In January 2017, Connecticut Water filed for a 1.09% increase in WICA, which, if approved by PURA, would increase the cumulative WICA to 8.25% effective April 1, 2017. Connecticut Water files for WICA increases on a statewide basis. In Maine, Maine Water files for WISC increases with the Maine Public Utilities Commission (MPUC) on a system-by-system basis. The current overall approved cumulative WISC surcharge for all divisions is 6.5%.

WICA and WISC allow for recovery of eligible infrastructure replacements on a semi-annual basis. Since the adoption of WICA in 2007, Connecticut Water has replaced more than 100 miles of aging water main with an average age of 75 years. WISC became available in Maine in 2013 and has been used to replace aging water mains and pump stations, construct storage tanks and fund treatment improvements.

Other Developments

The pipeline to serve the University of Connecticut’s Storrs Campus (UConn) and the off-campus customers in the Town of Mansfield, Connecticut was placed into service in October 2016 and was activated as a supplemental water source to the University on December 2, 2016. As called for in the Water Supply Agreement with UConn, Connecticut Water acquired approximately 300 off-campus customers that had formerly been served by UConn on the activation date.

The Company’s 2016 Customer Satisfaction Index as measured by an independent research firm was measured at 92.3%. Mr. Thornburg stated, "We are very pleased that our customers are overwhelmingly satisfied with the water and service provided by our companies. Our employees take great pride in serving customers and we appreciate their passion and commitment to customer satisfaction."

CTWS is the largest publicly traded water company based in New England. Through its wholly-owned public water utility subsidiaries, Connecticut Water and Maine Water, the Company currently provides drinking water to more than 129,000 customers in 79 communities.