10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2013 or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM

TO

Commission File Number 0-8084

Connecticut Water Service, Inc.

(Exact name of registrant as specified in its charter)

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

(860) 669-8636

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes xNo ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes xNo ¨

Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer x
Non-accelerated filer o (Do not check if smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date

11,018,161

Number of shares of common stock outstanding, October 31, 2013

(Includes 172,519 common stock equivalent shares awarded under the Performance Stock Programs) 

CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES

Financial Report

September 30, 2013

TABLE OF CONTENTS

Part I, Item 1:  Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012	3
Condensed Consolidated Statements of Income for the three months ended September 30, 2013 and 2012	4
Condensed Consolidated Statements of Income for the nine months ended September 30, 2013 and 2012	5
Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2013 and 2012	6
Condensed Consolidated Statements of Retained Earnings for the three and nine months ended September 30, 2013 and 2012	7
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012	8
Notes to Condensed Consolidated Financial Statements	9
Part I, Item 2:  Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Part I, Item 3:  Quantitative and Qualitative Disclosures About Market Risk	32
Part I, Item 4:  Controls and Procedures	33
Part II, Item 1:  Legal Proceedings	33
Part II, Item 1A:  Risk Factors	33
Part II, Item 2:  Unregistered Sales of Equity Securities and Use of Proceeds	33
Part II, Item 6:  Exhibits	34
Signature Page Exhibit 31.1 Exhibit 31.2 Exhibit 32 Exhibit 101.INS Exhibit 101.SCH Exhibit 101.CAL Exhibit 101.DEF Exhibit 101.LAB Exhibit 101.PRE	35

CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share data)

ASSETS	September 30, 2013			December 31, 2012
Utility Plant	$	627,503		$	611,787
Construction Work in Progress	11,946			7,734
	639,449			619,521
Accumulated Provision for Depreciation	(177,639		)	(171,610		)
Net Utility Plant	461,810			447,911
Other Property and Investments	7,135			6,394
Cash and Cash Equivalents	1,588			13,150
Accounts Receivable (Less Allowance, 2013 - $1,036; 2012 - $1,058)	14,306			11,526
Accrued Unbilled Revenues	8,708			7,233
Materials and Supplies, at Average Cost	2,021			1,629
Prepaid Income Taxes - Refund Receivable	13,813			347
Prepayments and Other Current Assets	6,785			2,477
Total Current Assets	47,221			36,362
Restricted Cash	9,938			9,820
Unamortized Debt Issuance Expense	6,979			7,411
Unrecovered Income Taxes - Regulatory Asset	41,870			9,871
Pension Benefits - Regulatory Asset	16,716			18,319
Post-Retirement Benefits Other Than Pension - Regulatory Asset	3,134			3,022
Goodwill	31,685			31,685
Deferred Charges and Other Costs	9,114			8,180
Total Regulatory and Other Long-Term Assets	119,436			88,308
Total Assets	$	635,602		$	578,975
CAPITALIZATION AND LIABILITIES
Common Stockholders' Equity:
Common Stock Without Par Value: Authorized - 25,000,000 Shares
Issued and Outstanding: 2013 - 11,016,494; 2012 - 10,939,486	$	137,085		$	134,873
Retained Earnings	60,108			51,804
Accumulated Other Comprehensive Loss	(1,091		)	(1,328		)
Common Stockholders' Equity	196,102			185,349
Preferred Stock	772			772
Long-Term Debt	175,533			178,475
Total Capitalization	372,407			364,596
Current Portion of Long-Term Debt	4,103			1,304
Interim Bank Loans Payable	1,324			1,660
Accounts Payable and Accrued Expenses	7,432			10,016
Accrued Interest	1,450			889
Current Portion of Refund to Customers - Regulatory Liability	3,100			—
Other Current Liabilities	1,849			2,008
Total Current Liabilities	19,258			15,877
Advances for Construction	31,566			31,030
Contributions in Aid of Construction	77,346			77,372
Deferred Federal and State Income Taxes	45,537			40,869
Unfunded Future Income Taxes	41,442			8,992
Long-Term Compensation Arrangements	36,279			36,430
Unamortized Investment Tax Credits	1,435			1,490
Refund to Customers - Regulatory Liability	9,299			—
Other Long-Term Liabilities	1,033			2,319
Total Long-Term Liabilities	243,937			198,502
Commitments and Contingencies	—			—
Total Capitalization and Liabilities	$	635,602		$	578,975

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

3

CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

For the Three Months Ended September 30, 2013 and 2012

(Unaudited)

(In thousands, except per share amounts)

	2013			2012
Operating Revenues	$	27,632		$	24,461
Operating Expenses
Operation and Maintenance	11,099			10,273
Depreciation	2,684			2,387
Income Taxes	1,659			2,098
Taxes Other Than Income Taxes	2,135			1,985
Total Operating Expenses	17,577			16,743
Net Operating Revenues	10,055			7,718
Other Utility Income, Net of Taxes	194			243
Total Utility Operating Income	10,249			7,961
Other Income (Deductions), Net of Taxes
Loss on Real Estate Transactions	(7		)	(31		)
Non-Water Sales Earnings	381			329
Allowance for Funds Used During Construction	79			59
Other	423			(156		)
Total Other Income, Net of Taxes	876			201
Interest and Debt Expense
Interest on Long-Term Debt	1,827			1,925
Other Interest (Income) Charges, Net	(142		)	172
Amortization of Debt Expense and Premium, Net	(2		)	91
Total Interest and Debt Expense	1,683			2,188
Net Income	9,442			5,974
Preferred Stock Dividend Requirement	10			10
Net Income Applicable to Common Stock	$	9,432		$	5,964
Weighted Average Common Shares Outstanding:
Basic	10,835			8,689
Diluted	11,006			8,829
Earnings Per Common Share:
Basic	$	0.87		$	0.69
Diluted	$	0.86		$	0.67
Dividends Per Common Share	$	0.2475		$	0.2425

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

4

CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

For the Nine Months Ended September 30, 2013 and 2012

(Unaudited)

(In thousands, except per share amounts)

	2013			2012
Operating Revenues	$	69,906		$	64,349
Operating Expenses
Operation and Maintenance	31,834			29,984
Depreciation	7,988			7,166
Income Taxes	5,306			5,244
Taxes Other Than Income Taxes	6,105			5,675
Total Operating Expenses	51,233			48,069
Net Operating Revenues	18,673			16,280
Other Utility Income, Net of Taxes	579			607
Total Utility Operating Income	19,252			16,887
Other Income (Deductions), Net of Taxes
(Loss) Gain on Real Estate Transactions	(7		)	951
Non-Water Sales Earnings	1,143			1,012
Allowance for Funds Used During Construction	209			194
Other	251			(597		)
Total Other Income, Net of Taxes	1,596			1,560
Interest and Debt Expense
Interest on Long-Term Debt	5,405			5,772
Other Interest (Income) Charges, Net	(842		)	359
Amortization of Debt Expense and Premium, Net	(80		)	269
Total Interest and Debt Expense	4,483			6,400
Net Income	16,365			12,047
Preferred Stock Dividend Requirement	29			29
Net Income Applicable to Common Stock	$	16,336		$	12,018
Weighted Average Common Shares Outstanding:
Basic	10,819			8,669
Diluted	10,987			8,805
Earnings Per Common Share:
Basic	$	1.51		$	1.39
Diluted	$	1.49		$	1.36
Dividends Per Common Share	$	0.7325		$	0.7175

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

5

CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months Ended September 30, 2013 and 2012

(Unaudited)

(In thousands)

	2013		2012
Net Income	$	9,442	$	5,974
Other Comprehensive Income/(Loss), net of tax
Qualified Cash Flow Hedging Instrument Income, net of tax benefit of $12 and $1 in 2013 and 2012	40		1
Reclassification to Pension and Post-Retirement Benefits Other than Pension, net of tax (expense) benefit of $(34) in 2013 and $15 in 2012	22		(18		)
Unrealized gain on investments, net of tax expense of $31 in 2013 and $20 in 2012	54		30
Other Comprehensive Income, net of tax	116		13
Comprehensive Income	$	9,558	$	5,987

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Nine Months Ended September 30, 2013 and 2012

(Unaudited)

(In thousands)

	2013		2012
Net Income	$	16,365	$	12,047
Other Comprehensive Income/(Loss), net of tax
Qualified Cash Flow Hedging Instrument Income, net of tax benefit of $12 and $1 in 2013 and 2012	41		2
Reclassification to Pension and Post-Retirement Benefits Other Than Pension, net of tax (expense) benefit of $(80) in 2013 and $46 in 2012	89		(53		)
Unrealized gain on investments, net of tax expense of $66 in 2013 and $41 in 2012	107		61
Other Comprehensive Income, net of tax	237		10
Comprehensive Income	$	16,602	$	12,057

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

6

CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

For the Three Months Ended September 30, 2013 and 2012

(Unaudited)

(In thousands, except per share amounts)

	2013		2012
Balance at Beginning of Period	$	53,395	$	48,544
Net Income	9,442		5,974
	62,837		54,518
Dividends Declared:
Cumulative Preferred, Class A, $0.20 per share	3		3
Cumulative Preferred, Series $0.90, $0.225 per share	7		7
Common Stock - 2013 $0.2475 per share; 2012 $0.2425 per share	2,719		2,142
	2,729		2,152
Balance at End of Period	$	60,108	$	52,366

CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

For the Nine Months Ended September 30, 2013 and 2012

(Unaudited)

(In thousands, except per share amounts)

	2013		2012
Balance at Beginning of Period	$	51,804	$	46,669
Net Income	16,365		12,047
	68,169		58,716
Dividends Declared:
Cumulative Preferred, Class A, $0.60 per share	9		9
Cumulative Preferred, Series $0.90, $0.675 per share	20		20
Common Stock - 2013 $0.7325 per share; 2012 $0.7175 per share	8,032		6,321
	8,061		6,350
Balance at End of Period	$	60,108	$	52,366

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

7

CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2013 and 2012

(Unaudited)

(In thousands)

	2013			2012
Operating Activities:
Net Income	$	16,365		$	12,047
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
Deferred Revenues	(2,583		)	179
Provision for Deferred Income Taxes and Investment Tax Credits, Net	5,063			1,756
Allowance for Funds Used During Construction	(209		)	(194		)
Depreciation (including $533 and $330 in 2013 and 2012 charged to other accounts)	8,521			7,496
Loss (Gain) on Real Estate Transactions	7			(951		)
Change in Assets and Liabilities:
Increase in Accounts Receivable and Accrued Unbilled Revenues	(4,255		)	(4,745		)
Increase in Prepaid Income Taxes and Prepayments and Other Current Assets	(18,170		)	(2,173		)
Decrease in Other Non-Current Items	11,429			4,137
Increase in Accounts Payable, Accrued Expenses and Other Current Liabilities	1,876			930
Total Adjustments	1,679			6,435
Net Cash and Cash Equivalents Provided by Operating Activities	18,044			18,482
Investing Activities:
Company Financed Additions to Utility Plant	(22,703		)	(17,779		)
Advances from Others for Construction	(179		)	(53		)
Net Additions to Utility Plant Used in Continuing Operations	(22,882		)	(17,832		)
Purchase of water systems, net of cash acquired	—			(36,340		)
Proceeds from the Sale of Land	95			1,450
Release of Restricted Cash	1,295			6,117
Net Cash and Cash Equivalents Used in Investing Activities	(21,492		)	(46,605		)
Financing Activities:
Proceeds from Interim Bank Loans	1,324			22,617
Repayment of Interim Bank Loans	(1,660		)	(21,372		)
Proceeds from the Issuance of Long-Term Debt	14,550			36,088
Costs to Issue Long-Term Debt and Common Stock	(42		)	(254		)
Proceeds from Issuance of Common Stock	1,209			735
Proceeds from the Exercise of Stock Options	—			631
Repayment of Long-Term Debt Including Current Portion	(15,613		)	(871		)
Advances from Others for Construction	179			53
Cash Dividends Paid	(8,061		)	(6,350		)
Net Cash and Cash Equivalents (Used in) Provided by Financing Activities	(8,114		)	31,277
Net (Decrease) Increase in Cash and Cash Equivalents	(11,562		)	3,154
Cash and Cash Equivalents at Beginning of Period	13,150			1,012
Cash and Cash Equivalents at End of Period	$	1,588		$	4,166
Non-Cash Investing and Financing Activities:
Non-Cash Contributed Utility Plant	$	438		$	718
Short-term Investment of Bond Proceeds Held in Restricted Cash	$	9,938		$	9,819
Supplemental Disclosures of Cash Flow Information:
Cash Paid for:
Interest	$	4,126		$	5,123
State and Federal Income Taxes	$	2,550		$	4,337

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

8

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Preparation of Financials

The condensed consolidated financial statements included herein have been prepared by Connecticut Water Service, Inc. and Subsidiaries (the “Company”), pursuant to the rules and regulations of the Securities and Exchange Commission and reflect all adjustments that are of a normal recurring nature which are, in the opinion of management, necessary to a fair statement of the results for interim periods.  The Company’s primary operating subsidiaries are: The Connecticut Water Company (“Connecticut Water”), The Maine Water Company (“Maine Water”) and the Biddeford & Saco Water Company ("BSWC").  Certain information and footnote disclosures have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.  The Condensed Consolidated Balance Sheet at December 31, 2012 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and the notes thereto included in the Company’s latest Annual Report on Form 10-K for the year ended December 31, 2012 and as updated in the Company's Quarterly Report on Forms 10-Q for the periods ended March 31, 2013 and June 30, 2013.

Effective January 1, 2013, the Company began recording an accrual for future patronage refunds from a banking partner based on past history, where in prior years the refund was recorded when received. The Company received $588,000 in patronage distribution during the first quarter of 2013 which related to the year ended December 31, 2012. The Company has determined that changing the accounting to an accrual basis in 2013 is appropriate. The Company believes that the amounts received and recorded in prior periods were not material to the Company's consolidated results of operations or consolidated financial position.

During the second quarter of 2013, the Company recognized that it was not properly amortizing the fair value of debt that was recorded as part of the Company's acquisitions of Maine Water and BSWC. As a result, in the second quarter of 2013, the Company recorded $169,000 and $85,000 of amortization into income relating to year ended December 31, 2012 and the first quarter of 2013, respectively. The Company believes that the amounts recorded were not material to the Company's consolidated results of operations or consolidated financial position.

Certain reclassifications have been made to the 2012 Condensed Consolidated Balance Sheet and the 2012 Condensed Consolidated Statement of Cash Flows to conform previously reported data to the current presentation.

The results for interim periods are not necessarily indicative of results to be expected for the year since the consolidated earnings are subject to seasonal factors.

Regulatory Matters

The rates we charge our Connecticut water customers are established under the jurisdiction of and are approved by the Connecticut Public Utilities Regulatory Authority ("PURA"), formerly the Connecticut Department of Public Utility Control.  It is our policy to seek rate relief as necessary to enable us to achieve an adequate rate of return.  Connecticut Water’s allowed return on equity and return on rate base, effective as of July 14, 2010 are 9.75% and 7.32%, respectively.

On January 25, 2013, Connecticut Water filed a Water Infrastructure Conservation Act ("WICA") application with the PURA requesting an additional 1.08% surcharge to customer bills related to approximately $6.5 million spending on WICA projects. This application also reduced the surcharge by 0.09% for the prior year reconciliation adjustment which expired April 1, 2013.  On January 30, 2013, Connecticut Water filed for a 0.10% reconciliation adjustment for the 2012 shortfall in WICA, to become effective April 1, 2013.  On March 25, 2013, the PURA approved an additional 1.06% surcharge, effective April 1, 2013. Additionally, on March 27, 2013, the PURA approved a 0.10% reconciliation adjustment, effective April 1, 2013. As of April 1, 2013, Connecticut Water's cumulative WICA surcharge was 6.80%.

On July 25, 2013, Connecticut Water filed a WICA application with the PURA requesting an additional 1.09% surcharge to customers' bills, representing approximately $5.6 million in WICA related projects. On September 18, 2013 the PURA approved the 1.09% surcharge with the new rates becoming effective on October 1, 2013. As of October 1, 2013, the cumulative WICA surcharge was 7.89%.

On June 28, 2013, Connecticut Water entered into a settlement agreement with the Office of the Consumer Counsel of the State of Connecticut and the Office of the Attorney General for the State of Connecticut (the "Settlement Agreement"), whereby

9

Connecticut Water would adjust the water rates charged to its customers effective April 1, 2014 in accordance with the elements of the Settlement Agreement (the "Connecticut Water Rate Reduction Plan"). On July 1, 2013, Connecticut Water submitted an application to the PURA seeking formal approval of the Settlement Agreement.

The Settlement Agreement contemplates that Connecticut Water will adopt temporary and proposed regulations issued by the Internal Revenue Service ("IRS") that allows the Company to adopt an alternative method for determining how expenditures related to tangible property can be treated for federal tax purposes for tax years beginning on or after January 1, 2012.  This tax accounting method change treats certain expenditures that the Company historically capitalized for tax purposes, as a deductible repair expense on its tax return.  The adoption of the tax accounting method change allowed Connecticut Water to record a favorable “catch up adjustment” on the Company's consolidated 2012 federal tax return which was filed in September 2013. The Company filed for a tax refund of approximately $13.6 million by carrying back the net operating loss generated from this adjustment.

The Settlement Agreement includes, as a result of negotiated compromise of the parties' respective positions, the following key elements related to the Connecticut Water Rate Reduction Plan:

1)    Connecticut Water crediting its water customers with the amount of the catch up adjustment plus the amount by which 2012 federal income taxes are reduced by the repair deduction (the deduction amount filed on the Company's 2012 federal tax return was approximately $45 million) in order to offset an anticipated rate increase arising from the revenue adjustment mechanism authorized by the State of Connecticut in Public Act No. 13-78 with any associated change in rates to also be reflected on Connecticut Water customers' bills as of April 1, 2014;

2)    Resetting Connecticut Water's adjustment under Connecticut's WICA mechanism to zero by integrating the present WICA surcharge of 7.89% into Connecticut Water's base rates; and

3)    Connecticut Water agreeing not to file for a general rate increase (except under extraordinary circumstances outside Connecticut Water's control) for new rates to be effective any sooner than October 1, 2015.

In the Settlement Agreement, the parties also requested that PURA approve an accounting treatment for Connecticut Water to: 1) allow for the deferral of the tax refund described above and a credit of the tax benefit to customers over a proposed two-year period through a credit on water bills issued starting April 1, 2014 and 2) defer on the balance sheet as a regulatory asset or liability, for later crediting to or collection from customers of the amount by which actual revenues deviate from the revenues allowed in Connecticut Water's in most recent general rate proceedings, including WICA proceedings (the "Revenue Adjustment Mechanism" or "RAM"). The RAM removes the financial disincentive for water utilities to develop and implement effective water conservation programs.

On August 30, 2013, the PURA issued a final decision approving the Settlement Agreement. The Company will begin to issue a credit on customers' bills of approximately 8% beginning April 1, 2014.

Connecticut Water's allowed revenues for the nine months endedSeptember 30, 2013, as approved by PURA during our 2010 general rate case and including subsequently approved WICA surcharges, are approximately $58.3 million. Through normal billing and accrual of unbilled water usage for the nine months endedSeptember 30, 2013 revenue for Connecticut Water would have been approximately $55.5 million had the RAM not been implemented effective January 1, 2013. As a result of the implementation of the RAM, Connecticut Water recorded $2.8 million in additional revenue for the nine months endedSeptember 30, 2013.

The rates we charge our Maine water customers are established under the jurisdiction of and are approved by the MPUC.  It is our policy to seek rate relief as necessary to enable us to achieve an adequate rate of return.  Maine Water’s average allowed return on equity and return on rate base, as of September 30, 2013 were 10.00% and 8.31%, respectively.  BSWC’s allowed return on equity, as of September 30, 2013, was 10.00%.

In April 2013, Maine Water filed for rate increases in three of its divisions, totaling approximately $94,000 in additional revenue, driven primarily by dropping consumption and small expense increases. On July 9, 2013, the MPUC approved rate increases totaling $88,000 for these divisions, to be effective July 1, 2013. In June 2013, Maine Water filed for rate increases in three additional divisions, totaling approximately $554,000 in additional revenue, driven primarily by capital expenditures, declining consumption and small expense increases. These applications are currently under review at the MPUC, and a final decision is expected within nine months of the initial filing.

10

Effective June 2013, a Water Infrastructure Surcharge (“WISC”) is available in Maine that allows for expedited recovery of investment in water system infrastructure replacement, both treatment and distribution. The Company expects that Maine Water and BSWC will begin to use this in late 2013 or early 2014.

On September 3, 2013, an application was filed with the MPUC to merge Maine Water and BSWC, with Maine Water as the surviving entity. This application is currently under review by the MPUC, and a decision is expected before the end of 2013.

2. Pension and Other Post-Retirement Benefits

The following tables set forth the components of pension and other post-retirement benefit costs for the three and nine months endedSeptember 30, 2013 and 2012.

Pension Benefits

Components of Net Periodic Cost (in thousands):

	Three Months						Nine Months
Period ended September 30,	2013			2012			2013			2012
Service Cost	$	550		$	505		$	1,650		$	1,515
Interest Cost	696			642			2,087			1,927
Expected Return on Plan Assets	(799		)	(674		)	(2,397		)	(2,020		)
Amortization of:
Prior Service Cost	19			19			56			56
Net Loss	563			438			1,689			1,315
Net Periodic Benefit Cost	$	1,029		$	930		$	3,085		$	2,793

The Company made a contribution to its defined benefit pension plan of $2,490,000 in 2013 for the 2012 plan year, as allowed by the current funding status.

Post-Retirement Benefits Other Than Pension (PBOP)

Components of Net Periodic Cost (in thousands):

	Three Months						Nine Months
Period ended September 30,	2013			2012			2013			2012
Service Cost	$	169		$	136		$	506		$	411
Interest Cost	127			136			381			406
Expected Return on Plan Assets	(73		)	(67		)	(218		)	(202		)
Other	57			57			169			169
Amortization of:
Transition Obligation	—			1			—			1
Prior Service Cost	(202		)	(202		)	(605		)	(605		)
Recognized Net Loss	108			152			323			458
Net Periodic Benefit Cost	$	186		$	213		$	556		$	638

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3. Earnings per Share

Earnings per weighted average common share are calculated by dividing net income applicable to common stock by the weighted average number of shares of common stock outstanding during the respective periods as detailed below (diluted shares include the effect of unexercised stock options):

Three months ended September 30,	2013			2012
Common Shares Outstanding End of Period:	11,016,494			8,848,848
Weighted Average Shares Outstanding (Days Outstanding Basis):
Basic	10,834,532			8,689,116
Diluted	11,006,240			8,829,025
Basic Earnings per Share	$	0.87		$	0.69
Dilutive Effect of Unexercised Stock Options	(0.01		)	(0.02		)
Diluted Earnings per Share	$	0.86		$	0.67
Nine Months ended September 30,
Weighted Average Shares Outstanding (Days Outstanding Basis):
Basic	10,818,996			8,669,229
Diluted	10,986,731			8,805,061
Basic Earnings per Share	$	1.51		$	1.39
Dilutive Effect of Unexercised Stock Options	(0.02		)	(0.03		)
Diluted Earnings per Share	$	1.49		$	1.36

Total unrecognized compensation expense for all stock awards was approximately $1.0 million as of September 30, 2013 and will be recognized over a weighted average period of 1.1 years.

4. New Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board ("FASB") issued updated accounting guidance to improve the reporting of reclassifications out of accumulated other comprehensive income (“AOCI”). The update requires an entity to present information about the amounts reclassified from AOCI in their financial statements in either a single note or parenthetically on the face of the financial statements. The updated guidance is effective prospectively for reporting periods beginning after December 15, 2012. The Company adopted the provisions of the updated guidance for its quarterly reporting period beginning January 1, 2013. The adoption of the revised guidance had no impact on the Company's consolidated results of operations or consolidated financial position, but the Company did add additional disclosures, see Note 5.

In July 2013, the FASB issued Accounting Standards Update ("ASU") No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This ASU requires an entity to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss carryforward, or similar tax loss or tax credit carryforward, rather than as a liability when (1) the uncertain tax position would reduce the Net Operating Loss or other carryforward under the tax law of the applicable jurisdiction and (2) the entity intends to use the deferred tax asset for that purpose. This ASU is effective prospectively for fiscal years beginning after December 15, 2013. The Company does not expect that the adoption of this guidance will materially impact our consolidated financial position.

12

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Accumulated Other Comprehensive Income (Loss)

The changes in Accumulated Other Comprehensive Income/(Loss) ("AOCI") by component, net of tax, for the three and nine months endedSeptember 30, 2013 is as follows (in thousands):

Three Months Ended September 30, 2013	Interest Rate Swap			Unrealized Gains on Investments		Defined Benefit Items			Total
Beginning Balance (a)	$	(40	)	$	122	$	(1,289	)	$	(1,207	)
Other Comprehensive Income Before Reclassification	—			54		—			54
Amounts Reclassified from AOCI	40			—		22			62
Net current-period Other Comprehensive Income	40			54		22			116
Ending Balance	$	—		$	176	$	(1,267	)	$	(1,091	)
Nine Months Ended September 30, 2013	Interest Rate Swap			Unrealized Gains on Investments		Defined Benefit Items			Total
Beginning Balance (a)	$	(41	)	$	69	$	(1,356	)	$	(1,328	)
Other Comprehensive Income Before Reclassification	—			95		—			95
Amounts Reclassified from AOCI	41			12		89			142
Net current-period Other Comprehensive Income	41			107		89			237
Ending Balance	$	—		$	176	$	(1,267	)	$	(1,091	)
(a) All amounts shown are net of tax. Amounts in parentheses indicate loss.

The following table sets forth the amounts reclassified from AOCI by component and the affected line item on the Condensed Consolidated Statement of Income for the three and nine months endedSeptember 30, 2013 (in thousands):

Details about Other AOCI Components	Amounts Reclassified from AOCI Three Months Ended September 30, 2013(a)		Amounts Reclassified from AOCI Nine Months Ended September 30, 2013(a)		Affected Line Items on Income Statement
Amortization of Cash Flow Hedging Instrument	28		29		Other Income
Tax benefit	12		12		Other Income
	40		41
Realized Gains on Investments	—		21		Other Income
Tax expense	—		(9	)	Other Income
	—		12
Amortization of Recognized Net Gain from Defined Benefit Items	56		169		Other Income (b)
Tax expense	(34	)	(80	)	Other Income
	22		89
Total Reclassifications for the period, net of tax	62		142
(a) Amounts in parentheses indicate loss/expense.
(b) Included in computation of net periodic pension cost (see Note 2 for additional details).

13

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

6. Long-Term Debt

Long-Term Debt at September 30, 2013 and December 31, 2012 consisted of the following (in thousands):

		2013			2012
Connecticut Water Service, Inc.:
4.09%	Term Loan Note	$	16,653		$	17,337
The Connecticut Water Company:
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%	2007 A Series, Due 2037	—			14,550
5.10%	2009 A Series, Due 2039	19,950			19,950
5.00%	2011 A Series, Due 2021	23,651			23,797
3.16%	CoBank Note Payable, Due 2020	8,000			8,000
3.51%	CoBank Note Payable, Due 2022	14,795			14,795
4.29%	CoBank Note Payable, Due 2028	17,020			17,020
4.72%	CoBank Note Payable, Due 2032	14,795			14,795
4.75%	CoBank Note Payable, Due 2033	14,550			—
Total The Connecticut Water Company		134,811			134,957
The Maine Water Company:
8.95%	1994 Series G, Due 2024	9,000			9,000
2.68%	1999 Series J, Due 2019	474			524
0.00%	2001 Series K, Due 2031	739			780
2.58%	2002 Series L, Due 2022	90			98
1.53%	2003 Series M, Due 2023	401			421
1.73%	2004 Series N, Due 2024	451			471
0.00%	2004 Series O, Due 2034	140			147
1.76%	2006 Series P, Due 2026	451			471
1.57%	2009 Series R, Due 2029	242			247
0.00%	2009 Series S, Due 2029	717			762
0.00%	2009 Series T, Due 2029	2,012			2,137
0.00%	2012 Series U, Due 2042	171			177
1.00%	2013 Series V, Due 2033	1,410			—
2.52%	CoBank Note Payable, Due 2017	1,965			1,965
Total The Maine Water Company		18,263			17,200
The Biddeford & Saco Water Company
6.45%	Series M, Due 2014	2,700			2,700
7.72%	Series L, Due 2018	2,250			2,250
2.40%	Series N, Due 2022	1,297			1,297
1.86%	Series O, Due 2025	862			862
2.23%	Series P, Due 2028	1,354			1,354
Various	Various Capital Leases	94			126
Total The Biddeford & Saco Water Company		8,557			8,589
Add:  Acquisition Fair Value Adjustment		1,352			1,696
Less:  Current Portion		(4,103		)	(1,304		)
Total Long-Term Debt		$	175,533		$	178,475

As of September 30, 2013, the Company and its subsidiaries will make principal payments of approximately $4,103,000 over the next twelve months.

14

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

In December 2011, Connecticut Water borrowed $22.05 million through the issuance of Water Facilities Revenue Bonds by Connecticut Innovations, Inc. (formerly known as the Connecticut Development Authority).  Connecticut Water received approximately $24,000,000 in cash in exchange for the issuance of bonds with an aggregate principal amount of $22,050,000 with a maturity date of December 20, 2021 and a 5% coupon.  Connecticut Water recorded a bond premium in connection with this transaction and is amortizing that premium over the life of the bond.  The proceeds from the sale of the bonds are being used to finance construction and installation of various capital improvements to Connecticut Water’s existing water system.

There are no mandatory sinking fund payments required on Connecticut Water’s outstanding Water Facilities Revenue Bonds.  However, certain fixed rate Unsecured Water Facilities Revenue Refinancing Bonds provide for an estate redemption right whereby the estate of deceased bondholders or surviving joint owners may submit bonds to the Trustee for redemption at par, subject to a $25,000 per individual holder and a 3% annual aggregate limitation.

On January 1, 2012, the Company and CoBank, ACB ("CoBank") entered into an amendment to the CoBank Agreement (the “Amendment”) and two additional Promissory Note and Single Advance Term Loan Supplements providing for two additional Term Loans to the Company (the “2012 Term Loan Notes”).  Under the terms of the Amendment and the 2012 Term Loan Notes, on January 3, 2012 the Company borrowed from CoBank, in the aggregate, an additional $36.1 million of an available $40 million to be applied to the Company’s acquisition of the issued and outstanding capital stock of Aqua Maine, Inc. from Aqua America, Inc.

Under one Term Loan Note and Supplement, CoBank loaned the Company $18.0 million, which shall be repaid by the Company in 60 equal quarterly installments of principal and interest over a 15-year amortizing term, with the first installment paid on April 20, 2012 and the last installment due on January 20, 2027.  Under the other Term Loan Note and Supplement, as amended in September 2012, CoBank loaned the Company $18.1 million, which shall be repaid by the Company in quarterly interest payments and repayment of the principal balance in full on the earlier of January 2, 2014 or upon the Company raising equity capital, in the aggregate, up to the outstanding amount owed under the second Term Note and Supplement. The second Term Note was repaid in December 2012 with a portion of the proceeds from the Company's equity issuance.

On October 29, 2012, Connecticut Water entered into a Master Loan Agreement (the “Agreement”) with CoBank, ACB, (“CoBank”). Connecticut Water also delivered to CoBank four Promissory Note and Single Advance Term Loan Supplements, each dated October 29, 2012 (the “Promissory Notes”). On the terms and subject to the conditions set forth in the Promissory Notes issued pursuant to the Agreement, CoBank agreed to make unsecured loans (each a “Loan,” and collectively the “Loans”) to Connecticut Water from time to time, in an aggregate principal amount of up to $54,645,000. Connecticut Water used substantially all of the proceeds of the Loans to refinance the 1998 Series A, 1998 Series B, 2003A Series, 2003C Series and 2005A Series bonds outstanding.

On December 7, 2012, Maine Water entered into an amended and restated Master Loan Agreement with CoBank, pursuant to which CoBank loaned Maine Water $1,965,000, which proceeds were used by Maine Water to reimburse itself for the repayment in full on November 29, 2012 of all principal, accrued interest, premiums, surcharges and other amounts owed by Maine Water pursuant to its long-term bonds previously issued in 1999.

On March 5, 2013, Connecticut Water and CoBank entered into a Promissory Note and Single Advance Term Loan Supplement to the MLA (the “Note”) in which CoBank agreed to make an additional Loan to Connecticut Water in an aggregate principal amount of up to $14,550,000, with a maturity date of March 4, 2033. Additionally, the Company entered into an Amendment to the Guarantee dated March 5, 2013 (the “Guarantee Amendment”), pursuant to which the Company agreed to guarantee the payment of certain of Connecticut Water's obligations under the Note pursuant to the same terms of the Guarantee. Connecticut Water used substantially all of the proceeds of the Loans to refinance the 2007 A Series bonds outstanding.

On June 3, 2013, Maine Water completed the issuance of $1,409,888 aggregate principal amount of its First Mortgage Bonds, Series V, 1.0% due April 1, 2033 (the “Bonds”). The Bonds were issued by Maine Water to the Maine Municipal Bond Bank (the “Bank”) and the proceeds of the issuance were loaned (the “Loan”) by the Bank to Maine Water pursuant to a Loan Agreement by and between Maine Water and the Bank dated as of June 3, 2013. The proceeds of the Loan will be used by Maine Water to fund various water facilities projects.

Financial Covenants – The Company and its subsidiaries are required to comply with certain covenants in connection with various long term loan agreements.  The most restrictive of these covenants is to maintain a consolidated debt to capitalization ratio of not more than 60%. The Company and its subsidiaries were in compliance with all covenants at September 30, 2013.

15

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

7. Fair Value Disclosures

FASB Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures (“FASB ASC 820”) provides enhanced guidance for using fair value to measure assets and liabilities and expands disclosure with respect to fair value measurements.

FASB ASC 820 establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs).  The hierarchy consists of three broad levels, as follows:

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.

The following table summarizes our financial instruments measured at fair value on a recurring basis within the fair value hierarchy as of September 30, 2013 (in thousands):

	Level 1		Level 2		Level 3		Total
Asset Type:
Company Owned Life Insurance	$	—	$	2,719	$	—	$	2,719
Money Market Fund	115		—		—		115
Mutual Funds:
Equity Funds (1)	1,378		—		—		1,378
Total	$	1,493	$	2,719	$	—	$	4,212

The following table summarizes our financial instruments measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2012 (in thousands):

	Level 1		Level 2		Level 3		Total
Asset Type:
Company Owned Life Insurance	$	—	$	2,538	$	—	$	2,538
Money Market Fund	28		—		—		28
Mutual Funds:
Equity Funds (1)	1,046		—		—		1,046
Total	$	1,074	$	2,538	$	—	$	3,612

(1) Mutual funds consist primarily of equity securities and are presented on the Other Property and Investments line item of the Company's Condensed Consolidated Balance Sheets.

The fair value of Company Owned Life Insurance is based on the cash surrender value of the contracts. These contracts are based principally on a referenced pool of investment funds that actively redeem shares and are observable and measurable and are presented on the Other Property and Investments line item of the Company's Condensed Consolidated Balance Sheets.

The following methods and assumptions were used to estimate the fair value of each of the following financial instruments, which are not recorded at fair value on the financial statements.

Cash and cash equivalents – Cash equivalents consist of highly liquid instruments with original maturities at the time of purchase of three months or less.  The carrying amount approximates fair value.  Under the fair value hierarchy the fair value of cash and cash equivalents is classified as a Level 1 measurement.

Restricted Cash – As part of the Connecticut Water’s December 2011 and Maine Water's June 2013 bond offerings, the Company recorded unused proceeds from this bond issuance as restricted cash as the funds can only be used for certain capital expenditures.  The Company expects to use the remainder of the proceeds during 2013 and 2014, as the approved capital expenditures are completed.  The carrying amount approximates fair value.  Under the fair value hierarchy the fair value of restricted cash is classified as a Level 1 measurement.

16

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Long-Term Debt – The fair value of the Company's fixed rate long-term debt is based upon borrowing rates currently available to the Company.  As of September 30, 2013 and December 31, 2012, the estimated fair value of the Company's long-term debt was $181,160,000 and $194,900,000, respectively, as compared to the carrying amounts of $175,533,000 and $178,475,000, respectively. The estimated fair value of long term debt was calculated using a discounted cash flow model that uses comparable interest rates and yield curve data based on the A-rated MMD (Municipal Market Data) Index which is the benchmark of current municipal bond yields. Under the fair value hierarchy, the fair value of long term debt is classified as a Level 2 measurement.

The fair values shown above have been reported to meet the disclosure requirements of accounting principles generally accepted in the United States and do not purport to represent the amounts at which those obligations would be settled.

8. Segment Reporting

The Company operates principally in three business segments: Water Activities, Real Estate Transactions, and Services and Rentals.  Results of operations for the three and nine months endedSeptember 30, 2013 include the results of BSWC. Financial data for the segments is as follows (in thousands):

Three Months Ended September 30, 2013
Segment	Revenues		Pre-Tax Income (Loss)			Income Tax Expense (Benefit)			Net Income (Loss)
Water Activities	$	27,982	$	10,294		$	1,226		$	9,068
Real Estate Transactions	95		(8		)	(1		)	(7		)
Services and Rentals	1,491		588			207			381
Total	$	29,568	$	10,874		$	1,432		$	9,442

Three Months Ended September 30, 2012
Segment	Revenues		Pre-Tax Income		Income Tax Expense		Net Income (Loss)
Water Activities	$	24,919	$	7,795	$	2,119	$	5,676
Real Estate Transactions	—		—		31		(31		)
Services and Rentals	1,586		559		230		329
Total	$	26,505	$	8,354	$	2,380	$	5,974

Nine Months Ended September 30, 2013
Segment	Revenues		Pre-Tax Income (Loss)			Income Tax Expense (Benefit)			Net Income (Loss)
Water Activities	$	70,964	$	20,223		$	4,994		$	15,229
Real Estate Transactions	95		(8		)	(1		)	(7		)
Services and Rentals	4,357		1,875			732			1,143
Total	$	75,416	$	22,090		$	5,725		$	16,365

Nine Months Ended September 30, 2012
Segment	Revenues		Pre-Tax Income		Income Tax Expense		Net Income
Water Activities	$	65,480	$	15,209	$	5,125	$	10,084
Real Estate Transactions	1,450		1,331		380		951
Services and Rentals	4,287		1,712		700		1,012
Total	$	71,217	$	18,252	$	6,205	$	12,047

The revenues shown in Water Activities above consisted of revenues from water customers of $27,632,000 and $24,461,000 for the three months endedSeptember 30, 2013 and 2012, respectively.  Additionally, there were revenues associated with utility plant leased to others of $350,000 and $458,000 for the three months endedSeptember 30, 2013 and 2012, respectively. The revenues shown in Water Activities above consisted of revenues from water customers of $69,906,000 and $64,349,000 for the nine months endedSeptember 30, 2013 and 2012, respectively.  Additionally, there were revenues associated with utility plant leased to others of $1,058,000 and $1,131,000 for the nine months endedSeptember 30, 2013 and 2012, respectively. The

17

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

revenues from water customers for the three and nine months endedSeptember 30, 2013 include $2,762,000 in revenues related to the implementation of the RAM during the third quarter of 2013.

The Company owns various small, discrete parcels of land that are no longer required for water supply purposes.  From time to time, the Company may sell or donate these parcels, depending on various factors, including the current market for land, the amount of tax benefits received for donations and the Company’s ability to use any benefits received from donations.  During the nine months endedSeptember 30, 2013, the Company completed the sale of a small rental property in the Town of Killingly, CT. During the nine months endedSeptember 30, 2012, the Company completed the previously announced sale of a parcel of land in the Town of Plymouth, CT.

Assets by segment (in thousands):

	September 30, 2013		December 31, 2012
Total Plant and Other Investments:
Water Activities	$	468,240	$	453,625
Non-Water	705		680
	468,945		454,305
Other Assets:
Water Activities	155,602		118,020
Non-Water	11,055		6,650
	166,657		124,670
Total Assets	$	635,602	$	578,975

9. Income Taxes

FASB ASC 740 Income Taxes (“FASB ASC 740”) addresses the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FASB ASC 740, the Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. On June 11, 2013, the Company was notified by the Connecticut Department of Revenue Services that its state tax filings for the years 2009 through 2011 would be reviewed during the fourth quarter of 2013. The Company is also aware that certain of its peers have been challenged on certain tax credits associated with fixed capital investment credits and believes that this may be a focus of the State's review. While the Company firmly believes that all fixed capital investment credits are appropriate and conservatively measured, the Company believes, based on recent activities by taxing authorities, that it is more likely than not that the Company's fixed capital investment credits claimed in prior years may be challenged and ultimately disallowed. Therefore, as required by FASB ASC 740, during the nine months endedSeptember 30, 2013, the Company recorded a reserve of $2.3 million, or 100% of the credits recorded that would be subject to disallowance, of which approximately $0.9 million was recorded in the three months ended September 30, 2013.

On the 2012 tax return, filed in September 2013, the subsidiary Connecticut Water Company filed a change in accounting method to adopt the Internal Revenue Services' temporary tangible property regulations. This method change allowed the Company to take a current year deduction for expenses that were previously capitalized for tax purposes. Since the filing of the 2012 tax return, the IRS has issued final regulations. While the Company believes that the deduction taken on its tax return is appropriate, the methodology for determining the deduction could be challenged by the taxing authorities. Therefore, as required by FASB ASC 740, during the three and nine months ended September 30, 2013, the Company recorded a reserve of $2.2 million for a portion of the benefit that is not being returned to customers.

From time to time, the Company may be assessed interest and penalties by taxing authorities.  In those cases, the charges would appear on the Other line item within the Other Income (Deductions), Net of Taxes section of the Company's Condensed Consolidated Statements of Income.  There were no such charges for the nine months endedSeptember 30, 2013 and 2012.  Additionally, there were no accruals relating to interest or penalties as of September 30, 2013 and December 31, 2012.  The Company remains subject to examination by federal authorities for the 2010, 2011 and 2012 tax years.

The Company is currently engaged in an analysis to determine the amount of expenditures related to tangible property that will be reflected on its 2013 Federal Tax Return to be filed in September 2014. As a result, through the third quarter of 2013, the

18

Company has estimated the portion of its infrastructure investment that will qualify as a repair deduction for 2013 and has reflected that deduction in its effective tax rate at 50% of the expected $15 million of infrastructure improvement. Consistent with other differences between book and tax expenditures, the Company is required to flow-through any timing differences not required by the Internal Revenue Service to be normalized.

The Company’s effective income tax rate for the three months ended of September 30, 2013 and 2012 was 13.2% and 28.5%, respectively.  The Company's effective tax rate, excluding discrete items booked during the quarter, was 16.1% for the three months endedSeptember 30, 2013. The statutory income tax rates during each period was 41%.  In determining its annual estimated effective tax rate for interim periods, the Company reflects its estimated permanent and flow-through tax differences for the taxable year, including the basis difference for the adoption of the tangible property regulations in the current year.

The Company’s effective income tax rate for the first nine months of 2013 and 2012 was 25.9% and 34.0%, respectively.  The Company's effective tax rate, excluding discrete items such as the tax reserves described above and the 2012 return to accrual true up, was 27.3% for the nine months endedSeptember 30, 2013. The statutory income tax rates during each period was 41%.  In determining its annual estimated effective tax rate for interim periods, the Company reflects its estimated permanent and flow-through tax differences for the taxable year, including the basis difference for the adoption of the tangible property regulations in the current year.

10. Lines of Credit

On June 30, 2009, the Company entered into a $15 million line of credit agreement with CoBank, ACB, which was amended in May 2010, July 2011 and September 2012 and is currently scheduled to expire on July 1, 2014.  The Company maintains an additional line of credit of $20 million, with an expiration date of June 30, 2014.  On June 30, 2013, the Company allowed BSWC's $2.25 million line of credit to expire. As of September 30, 2013, the total lines of credit available to the Company was $35.0 million.  Interim Bank Loans Payable at September 30, 2013 and December 31, 2012 was approximately $1.3 million and $1.7 million, respectively, and represents the outstanding aggregate balances on these lines of credit. As discussed in Part I, Item 2 below, the Company used a portion of the $47.5 million of net proceeds of its December 2012 equity issuance to pay down a portion of its outstanding balances on these lines of credit. As of September 30, 2013, the Company had $33.7 million in unused lines of credit.  Interest expense charged on interim bank loans will fluctuate based on market interest rates.

11. Acquisitions

Effective December 10, 2012, the Company completed the acquisition of the Biddeford & Saco Water Company ("BSWC"). This acquisition further expanded the Company's footprint into another New England state, providing the Company with diversity with respect to weather and regulatory climate and ratemaking. Shareholders of BSWC common stock exchanged all outstanding shares of BSWC for 380,254 shares of Connecticut Water Service, Inc. in a transaction valued at approximately $12.0 million, based on the closing price of the Company's common stock on the acquisition date. BSWC is a public water utility regulated by the Maine Public Utility Commission ("MPUC") that serves approximately 15,000 customers in 4 communities in the State of Maine. The Company is accounting for the acquisition in accordance with FASB ASC 805 Business Combinations ("FASB ASC 805").

The estimated fair values of assets acquired and liabilities assumed, including BSWC's outstanding long-term debt, are based upon the information that was available as of the acquisition dates, which management believes provides a reasonable basis for the estimated values. The fair values of long term-debt were based on similar marketable instruments. Management is analyzing additional data necessary to finalize these fair values, which are subject to change. While such changes could be significant, management does not expect them to be, based upon the information provided to date. The valuation, and thus the purchase price allocation, is expected to be completed as soon as practicable but no later than one year from the acquisition date.

The Company incurred pre-tax acquisition and closing related expenses of approximately $544,000 during the year ended December 31, 2012 to acquire BSWC which is recorded on the "Other" line item of the "Other Income (Deductions), Net of Taxes" section of the Consolidated Statements of Income.

19

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the estimated fair value of the BSWC assets acquired on December 10, 2012, the date of the acquisition (in thousands):

Net Utility Plant	$	19,411
Cash and Cash Equivalents	14
Accounts Receivable, net	628
Prepayments and Other Current Assets	545
Goodwill	7,708
Deferred Charges and Other Costs	554
Total Assets Acquired	$	28,860
Long-Term Debt, including current portion	$	9,263
Accounts Payable and Accrued Expenses	254
Other Current Liabilities	1,076
Advances for Construction	714
Contributions in Aid of Construction	2,568
Deferred Federal and State Income Taxes	1,668
Other Long-Term Liabilities	1,305
Total Liabilities Assumed	$	16,848
Net Assets Acquired	$	12,012

The estimated fair values of the assets acquired and the liabilities assumed were determined based on the accounting guidance for fair value measurement under GAAP, which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value analysis assumes the highest and best use of the assets by market participants. For BSWC, the allocation of the purchase price includes an adjustment to fair value related to BSWC's long-term debt and any associated deferred taxes. The excess of the purchase price paid over the estimated fair value of the assets acquired and the liabilities assumed was recognized as goodwill in the Water Activities Segment, none of which is deductible for tax purposes.

Goodwill is calculated as the excess of the purchase price over the net assets acquired and the contributing factors to the amount recorded include expected future cash flows, potential operational synergies, the utilization of technology and cost savings opportunities in the delivery of certain shared administrative and other services.

The following unaudited pro forma summary for the three and nine months endedSeptember 30, 2012 presents information as if BSWC had been acquired on January 1, 2012 and assumes that there were no other changes in our operations.  The following pro forma information does not necessarily reflect the actual results that would have occurred had the Company operated the business since January 1, 2012, nor is it necessarily indicative of the future results of operations of the combined companies (in thousands):

	Three Months Ended		Nine Months Ended
Operating Revenues	$	25,703	$	67,658
Other Water Activities Revenues	458		1,131
Real Estate Revenues	—		1,450
Service and Rentals Revenues	1,608		4,375
Total Revenues	$	27,769	$	74,614
Net Income	$	6,035	$	12,170
Basic Earnings per Average Share Outstanding	$	0.69	$	1.40
Diluted Earnings per Average Share Outstanding	$	0.68	$	1.38

20

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the results of BSWC for the three and nine months endedSeptember 30, 2013, and is included in the Condensed Consolidated Statement of Income for the period (in thousands):

	Three Months Ended		Nine Months Ended
Operating Revenues	$	1,134	$	3,173
Other Water Activities Revenues	—		—
Real Estate Revenues	—		—
Service and Rentals Revenues	22		85
Total Revenues	$	1,156	$	3,258
Net Income (Loss)	$	24	$	(75	)
Basic Income (Loss) per Average Share Outstanding	$	—	$	(0.01	)

Part I, Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the accompanying unaudited financial statements and related notes thereto and the audited financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2012.

General Information

Acquisitions

Effective January 1, 2012, Connecticut Water Service, Inc. (the "Company") completed the acquisition of Aqua Maine, Inc. (“AM”) from Aqua America, Inc. (“AA”) for a total cash purchase price, adjusted at closing, of $35.6 million.  Subsequent to the closing, the name of AM was changed to The Maine Water Company ("Maine Water").  Maine Water is a public water utility regulated by the Maine Public Utilities Commission (“MPUC”) that serves approximately 16,000 customers in 11 water systems in the State of Maine.  The acquisition is consistent with the Company’s growth strategy and makes the Company the largest U.S. based publicly-traded water utility company in New England.  The acquisition expanded the Company’s footprint into another New England state, providing some diversity with respect to weather and regulatory climate and ratemaking.  The Company accounted for the acquisition in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification (“ASC”) 805 Business Combinations ("FASB ASC 805"), including the purchase price allocation.

Additionally, in February 2012, Connecticut Water acquired a small water system in Hebron, Connecticut for $130,000.  The water system serves three multi-unit apartment buildings.

On July 19, 2012, the Company announced that it had reached an agreement to acquire The Biddeford & Saco Water Company ("BSWC"), pending a vote of BSWC shareholders, approval by the MPUC and the satisfaction of other various conditions. This acquisition added approximately 15,500 additional customers in the State of Maine, in the communities of Biddeford, Saco, Old Orchard Beach and Scarborough. Under the terms of the agreement, the acquisition was executed through a stock-for-stock merger transaction valued at approximately $12.0 million. On November 7, 2012, the MPUC approved the transaction and the Company completed the transaction on December 10, 2012. Holders of BSWC common stock received an aggregate of 380,254 shares of the Company's common stock in a tax-free exchange. The Company is accounting for the acquisition in accordance with FASB ASC 805. The Company is still in the process of completing the purchase price allocation as required by FASB ASC 805. See Note 11 in Part I, Item1 for more information.

UCONN Proposal

Beginning in June 2011, the University of Connecticut ("UCONN"), in partnership with the Town of Mansfield, initiated a process to identify and implement actions to secure a long-term water solution to meet the water supply needs for the University and the Town of Mansfield. On June 7, 2013, Connecticut Water submitted information to the University and the Town on its proposal to bring a reliable supply of water to the University's Storrs campus and to residents of Mansfield. Connecticut Water's submission for this project was made as part of the Environmental Impact Evaluation ("EIE") process under the Connecticut Environmental Policy Act.

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As detailed in its proposal, Connecticut Water proposes to bring up to 2 million gallons of water a day with a water main extension of approximately 5 miles from its water system in the Town of Tolland to Mansfield to meet the University campus and the Town of Mansfield's water supply needs. On August 7, 2013, the Board of Trustees of the University voted to recommend Connecticut Water's proposal.  On September 16, 2013, the State's Office of Policy and Management issued their approval of the Record of Decision of the EIE, allowing the University to proceed to implement the water supply solution.

On October 23, 2013, Connecticut Water entered into a non-binding letter of intent with UCONN to provide a long-term supply of potable water for UCONN’s Storrs campus facilities (the “Project”). The UCONN Letter of Intent describes the rights and obligations of the parties related to the Project and also sets forth the principal terms and conditions under which the Company will supply water to UCONN for the Project.

The proposed rights and obligations of the parties, and other terms and conditions described in the Letter of Intent are not intended to be legally binding on either of the parties. The parties have agreed that they will only be bound if and when a definitive water supply and management agreement has been negotiated, approved and executed by the parties.

The Company and UCONN expect to negotiate and execute their definitive agreement for the Project on or before December 31, 2013, unless otherwise extended by mutual agreement of the parties. The definitive agreement will be subject to the requirements of the Project’s EIE and record of decision, as approved by the Office of Policy and Management that identified the Company as the preferred option to supply UCONN and the Town of Mansfield, Connecticut with up to 2.2 million gallons of water per day over the next 50 years. The Company is responsible for obtaining any required regulatory permits, licenses and approvals to implement the water supply solution, including but not limited to those from PURA, the Connecticut Department of Energy and Environmental Protection and the Connecticut Department of Public Health.

On October 29, 2013, Connecticut Water and the Town of Mansfield, Connecticut entered into a non-binding Letter of Intent for Connecticut Water to provide water utility service to the Town. The Mansfield Letter of Intent provides the framework for necessary contractual agreements for Connecticut Water to serve the Mansfield community. Connecticut Water and the Town are working together towards finalizing a definitive written agreement by December 31, 2013, unless otherwise extended by mutual agreement of the parties.

Public Utility Regulatory Authority Matters

Our Regulated Companies derive their rights and franchises to operate from special state acts that are subject to alteration, amendment or repeal and do not grant us exclusive rights to our service areas. Our franchises are free from burdensome restrictions, are unlimited as to time, and authorize us to sell potable water in all the towns we now serve.  There is the possibility that either the State of Connecticut or the State of Maine could attempt to revoke our franchises and allow a governmental entity to take over some or all of our systems.  While we would vigorously oppose any such attempts, from time to time such legislation is contemplated.

The rates we charge our Connecticut water customers are established under the jurisdiction of and are approved by the Connecticut Public Utilities Regulatory Authority ("PURA"), formerly the Connecticut Department of Public Utility Control.  It is our policy to seek rate relief as necessary to enable us to achieve an adequate rate of return.  Connecticut Water’s allowed return on equity and return on rate base, effective as of July 14, 2010 are 9.75% and 7.32%, respectively.

On January 26, 2012, Connecticut Water filed a Water Infrastructure Conservation Act ("WICA") application with the PURA requesting an additional 1.17% surcharge to customer bills, related to approximately $7.0 million spending on WICA projects.  This application also reduced the surcharge by 0.11% for the prior year reconciliation adjustment which expired April 1, 2012.  On January 30, 2012, Connecticut Water filed for a 0.09% reconciliation adjustment for the 2011 shortfall in WICA, to become effective April 1, 2012.  In March 2012, the PURA approved an increase of 1.16% on Connecticut Water’s first WICA application and approved the 0.09% reconciliation surcharge from the second application, effective April 1, 2012.  As of April 1, 2012, Connecticut Water’s cumulative WICA surcharge was 4.23%.

On July 26, 2012, Connecticut Water filed a WICA application with the PURA requesting an additional 1.50% surcharge to customer bills, related to approximately $7.7 million spending on WICA projects. In September 2012, the PURA approved the 1.50% increase, effective October 1, 2012.  As of October 1, 2012, Connecticut Water’s cumulative WICA surcharge was 5.73%.

On January 25, 2013, Connecticut Water filed a WICA application with the PURA requesting an additional 1.08% surcharge to customer bills related to approximately $6.5 million spending on WICA projects. This application also reduced the surcharge by 0.09% for the prior year reconciliation adjustment which expired April 1, 2013.  On January 30, 2013, Connecticut Water

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filed for a 0.10% reconciliation adjustment for the 2012 shortfall in WICA, to become effective April 1, 2013.  On March 25, 2013, the PURA approved an additional 1.06% surcharge, effective April 1, 2013. Additionally, on March 27, 2013, the PURA approved a 0.10% reconciliation adjustment, effective April 1, 2013. As of April 1, 2013, Connecticut Water's cumulative WICA surcharge was 6.80%.

On July 25, 2013, Connecticut Water filed a WICA application with the PURA requesting an additional 1.09% surcharge to customers' bills, representing approximately $5.6 million in WICA related projects. On September 18, 2013 the PURA approved the 1.09% surcharge with the new rates becoming effective on October 1, 2013. As of October 1, 2013, the cumulative WICA surcharge was 7.89%.

On June 28, 2013, Connecticut Water entered into a settlement agreement with the Office of the Consumer Counsel of the State of Connecticut and the Office of the Attorney General for the State of Connecticut (the "Settlement Agreement"), whereby Connecticut Water would adjust the water rates charged to its customers effective April 1, 2014 in accordance with the elements of the Settlement Agreement (the "Connecticut Water Rate Reduction Plan"). On July 1, 2013, Connecticut Water submitted an application to the PURA seeking formal approval of the Settlement Agreement.

The Settlement Agreement contemplates that Connecticut Water will adopt temporary and proposed regulations issued by the Internal Revenue Service ("IRS") that allows the Company to adopt an alternative method for determining how expenditures related to tangible property can be treated for federal tax purposes for tax years beginning on or after January 1, 2012.  This tax accounting method change treats certain expenditures that the Company historically capitalized for tax purposes, as a deductible repair expense on its tax return.  The adoption of the tax accounting method change allowed Connecticut Water to record a favorable “catch up adjustment” on the Company's consolidated 2012 federal tax return which was filed in September 2013. The Company filed for a tax refund of approximately $13.6 million by carrying back the net operating loss generated from this adjustment.

The Settlement Agreement includes, as a result of negotiated compromise of the parties' respective positions, the following key elements related to the Connecticut Water Rate Reduction Plan:

1)    Connecticut Water crediting its water customers with the amount of the catch up adjustment plus the amount by which 2012 federal income taxes are reduced by the repair deduction (the deduction amount filed on the Company's 2012 federal tax return was approximately $45 million) in order to offset an anticipated rate increase arising from the revenue adjustment mechanism authorized by the State of Connecticut in Public Act No. 13-78 with any associated change in rates to also be reflected on Connecticut Water customers' bills as of April 1, 2014;

2)    Resetting Connecticut Water's adjustment under Connecticut's WICA mechanism to zero by integrating the present WICA surcharge of 7.89% into Connecticut Water's base rates; and

3)    Connecticut Water agreeing not to file for a general rate increase (except under extraordinary circumstances outside Connecticut Water's control) for new rates to be effective any sooner than October 1, 2015.

In the Settlement Agreement, the parties also requested that PURA approve an accounting treatment for Connecticut Water to: 1) allow for the deferral of the tax refund described above and a credit of the tax benefit to customers over a proposed two-year period through a credit on water bills issued starting April 1, 2014 and 2) defer on the balance sheet as a regulatory asset or liability, for later crediting to or collection from customers of the amount by which actual revenues deviate from the revenues allowed in Connecticut Water's in most recent general rate proceedings, including WICA proceedings (the "Revenue Adjustment Mechanism" or "RAM"). The RAM removes the financial disincentive for water utilities to develop and implement effective water conservation programs.

On August 30, 2013, the PURA issued a final decision approving the Settlement Agreement. The Company will begin to issue a credit on customers' bills of approximately 8% beginning April 1, 2014.

Connecticut Water's allowed revenues for the nine months endedSeptember 30, 2013, as approved by PURA during our 2010 general rate case and including subsequently approved WICA surcharges, are approximately $58.3 million. Through normal billing and accrual of unbilled water usage for the nine months endedSeptember 30, 2013 revenue for Connecticut Water would have been approximately $55.5 million had the RAM not been implemented effective January 1, 2013. As a result of the implementation of the RAM, Connecticut Water recorded $2.8 million in additional revenue for the nine months endedSeptember 30, 2013. The additional revenue generated approximately $0.15 in additional earnings per share in the nine months endedSeptember 30, 2013. Based on historical analysis, the Company believes that approximately 23% of Connecticut Water's

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annual revenue will be earned in the final three months of 2013.

The rates we charge our Maine water customers are established under the jurisdiction of and are approved by the MPUC.  It is our policy to seek rate relief as necessary to enable us to achieve an adequate rate of return.  Maine Water’s average allowed return on equity and return on rate base, as of September 30, 2013 were 10.00% and 8.31%, respectively.  BSWC’s allowed return on equity, as of September 30, 2013, was 10.00%.

In April 2013, Maine Water filed for rate increases in three of its divisions, totaling approximately $94,000 in additional revenue, driven primarily by dropping consumption and small expense increases. On July 9, 2013, the MPUC approved rate increases totaling $88,000 for these divisions, to be effective July 1, 2013. In June 2013, Maine Water filed for rate increases in three additional divisions, totaling approximately $554,000 in additional revenue, driven primarily by capital expenditures, declining consumption and small expense increases. These applications are currently under review at the MPUC, and a final decision is expected within nine months of the initial filing.

Effective June 2013, a Water Infrastructure Surcharge (“WISC”) is available in Maine that allows for expedited recovery of investment in water system infrastructure replacement, both treatment and distribution. The Company expects that Maine Water and BSWC will begin to use this in late 2013 or early 2014.

On September 3, 2013, an application was filed with the MPUC to merge Maine Water and BSWC, with Maine Water as the surviving entity. This application is currently under review by the MPUC, and a decision is expected before the end of 2013.

Critical Accounting Policies and Estimates

The Company maintains its accounting records in accordance with accounting principles generally accepted in the United States of America and as directed by the PURA and the MPUC to which Connecticut Water, Maine Water and BSWC, respectively, the Company’s regulated water utility subsidiaries, are subject.  Significant accounting policies employed by the Company, including the use of estimates, were presented in the Notes to Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Critical accounting policies are those that are the most important to the presentation of the Company’s financial condition and results of operations.  The application of such accounting policies requires management’s most difficult, subjective, and complex judgments and involves uncertainties and assumptions.  The Company’s most critical accounting policies pertain to public utility regulation related to ASC 980 “Regulated Operations”, revenue recognition (including the Revenue Adjustment Mechanism), and accounting for pension and other post-retirement benefit plans.  Each of these accounting policies and the application of critical accounting policies and estimates were discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Management must use informed judgments and best estimates to properly apply these critical accounting policies.  Because of the uncertainty in these estimates, actual results could differ from estimates used in applying the critical accounting policies.  The Company is not aware of any reasonably likely events or circumstances which would result in different amounts being reported that would materially affect its financial condition or results of operations.

Outlook

The following modifies and updates the “Outlook” section of the Company’s 2012 Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

The Company’s earnings and profitability are primarily dependent upon the sale and distribution of water, the amount of which is dependent on seasonal weather fluctuations, particularly during the summer months when water demand will vary with rainfall and temperature levels.  The Company’s earnings and profitability in future years will also depend upon a number of other factors, such as the ability to maintain our operating costs at current or lower levels, customer growth in the Company’s core regulated water utility businesses, growth in revenues attributable to non-water sales operations, availability and desirability of land no longer needed for water delivery for land sales, the outcome of the review of the Company's Connecticut state tax filings by the Connecticut Department of Revenue Services, and the timing and adequacy of rate relief when requested, from time to time, by our regulated water companies.

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The Company expects Net Income from its Water Activities segment to increase in 2013 over 2012 levels, based, in part, on the implementation of the RAM, the adoption of the tax accounting method change and the continued utilization of WICA, along with modest growth in its Services and Rentals segment.

The Company believes that the factors described above and those described in detail below under the heading “Commitments and Contingencies” below may have significant impact, either alone or in the aggregate, on the Company’s earnings and profitability in fiscal years 2013 and beyond.  Please also review carefully the risks and uncertainties described in the sections entitled Item 1A – Risk Factors, “Commitments and Contingencies” in Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and the risks and uncertainties described in the “Forward-Looking Information” section below.

Liquidity and Capital Resources

The Company is not aware of demands, events, or uncertainties that will result in a decrease of liquidity or a material change in the mix or relative cost of its capital resources, other than those outlined below.

Borrowing Facilities

On June 30, 2009, the Company entered into a $15 million line of credit agreement with CoBank, ACB ("CoBank"), which was amended in May 2010, July 2011 and September 2012 and is currently scheduled to expire on July 1, 2014.  The Company maintains an additional line of credit of $20 million, with an expiration date of June 30, 2014.  On June 30, 2013, the Company allowed BSWC's $2.25 million line of credit to expire. As of September 30, 2013, the total lines of credit available to the Company was $35.0 million.  Interim Bank Loans Payable at September 30, 2013 and December 31, 2012 was approximately $1.3 million and $1.7 million, respectively, and represents the outstanding aggregate balances on these lines of credit. The Company used a portion of the $47.5 million of net proceeds of its December 2012 equity issuance to pay down a portion of its outstanding balances on these lines of credit. As of September 30, 2013, the Company had $33.7 million in unused lines of credit.  Interest expense charged on interim bank loans will fluctuate based on market interest rates.

On January 1, 2012, the Company and CoBank entered into an amendment to the CoBank Agreement (the “Amendment”) and two additional Promissory Note and Single Advance Term Loan Supplements providing for two additional Term Loans to the Company (the “Term Loan Notes and Supplements”).  Under the terms of the Amendment and the Term Loan Notes and Supplements, on January 3, 2012 the Company borrowed from CoBank, in the aggregate, an additional $36.1 million of an available $40 million to be applied to the Company’s acquisition of the issued and outstanding capital stock of Aqua Maine, Inc. from Aqua America, Inc.

Under one Term Loan Note and Supplement, CoBank loaned the Company $18.0 million, which Term Loan shall be repaid by the Company in 60 equal quarterly installments of principal and interest over a 15-year amortizing term, with the first installment paid on April 20, 2012 and the last installment due on January 20, 2027.  Under the other Term Loan Note and Supplement, as amended in September 2012, CoBank loaned the Company $18.1 million, which Term Loan shall be repaid by the Company in quarterly interest payments and repayment of the principal balance in full on the earlier of January 2, 2014 or upon the Company raising equity capital, in the aggregate, up to the outstanding amount owed under the second Term Note and Supplement. On December 12, 2012, the Company issued approximately 1.7 million shares of common stock and used a portion of the proceeds to pay off the second Term Note. See "December 2012 Equity Issuance" below for more detail.

On August 3, 2012, Connecticut Water filed with PURA an application to refinance approximately $55 million of Connecticut Water's long-term debt. The application sought approval for Connecticut Water to issue four promissory notes in order to redeem five series of Connecticut Water's currently outstanding bonds. The Notes to be issued by Connecticut Water would have terms ranging from 8 to 20 years, will be unsecured and will have fixed interest rates, which would be lower than the rates on the currently outstanding bonds. On September 12, 2012, PURA issued a final decision allowing Connecticut Water to refinance the long-term debt.

On October 29, 2012, Connecticut Water entered into a Master Loan Agreement (the “Agreement”) with CoBank. Connecticut Water also delivered to CoBank four Promissory Note and Single Advance Term Loan Supplements, each dated October 29, 2012 (the “Promissory Notes”).  On the terms and subject to the conditions set forth in the Promissory Notes issued pursuant to the Agreement, CoBank agreed to make unsecured loans (each a “Loan,” and collectively the “Loans”) to Connecticut Water from time to time, in an aggregate principal amount of up to $54,645,000. Connecticut Water used substantially all of the proceeds of the Loans to refinance the 1998 Series A, 1998 Series B, 2003A Series, 2003C Series and 2005A Series bonds outstanding.  Subject to the payment of a surcharge described in the Agreement for Loans bearing interest at fixed rates, Connecticut Water may prepay the Loans in whole or in part at any time prior to each of the maturity dates of each Loan.

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On December 7, 2012, Maine Water entered into an amended and restated Master Loan Agreement with CoBank, pursuant to which CoBank loaned Maine Water $1,965,000, which proceeds were used by Maine Water to reimburse itself for the repayment in full on November 29, 2012 of all principal, accrued interest, premiums, surcharges and other amounts owed by Maine Water pursuant to its long-term bonds previously issued in 1999.

On March 5, 2013, Connecticut Water and CoBank entered into a Promissory Note and Single Advance Term Loan Supplement to the MLA (the “Note”) in which CoBank agreed to make an additional Loan to Connecticut Water in an aggregate principal amount of up to $14,550,000, with a maturity date of March 4, 2033. Additionally, the Company entered into an Amendment to the Guarantee dated March 5, 2013 (the “Guarantee Amendment”), pursuant to which the Company agreed to guarantee the payment of certain of Connecticut Water's obligations under the Note pursuant to the same terms of the Guarantee. Connecticut Water used substantially all of the proceeds of the Loans to refinance the 2007 A Series bonds outstanding.

On June 3, 2013, Maine Water completed the issuance of $1,409,888 aggregate principal amount of its First Mortgage Bonds, Series V, 1.0% due April 1, 2033 (the “Bonds”). The Bonds were issued by Maine Water to the Maine Municipal Bond Bank (the “Bank”) and the proceeds of the issuance were loaned (the “Loan”) by the Bank to Maine Water pursuant to a Loan Agreement by and between Maine Water and the Bank dated as of June 3, 2013 (the “Loan Agreement”). The proceeds of the Loan will be used by Maine Water to fund various water facilities projects.

Credit Rating

On April 15, 2013, Standard & Poor's Ratings Services ("S&P") affirmed its 'A'/Negative corporate credit rating and outlook on the Company. In its report, S&P commented on the material improvement of the Company's debt-to-capital ratio (52.1% at December 31, 2012 compared to 59.1% at December 31, 2011). S&P also noted that cash flows measures are expected to improve due to increased revenue from infrastructure surcharges and rate case increases. The Company's A rating has been in place since its initial rating in 2003.

Stock Plans

The Company offers a dividend reinvestment and stock purchase plan (“DRIP”) to all registered shareholders, and to the customers and employees of our regulated water companies, whereby participants can opt to have dividends directly reinvested into additional shares of the Company.  In August 2011, the Board of Directors approved amendments to the DRIP (effective as of January 1, 2012) that permit the Company to add, at the Company’s discretion, an “up to 5.00% purchase price discount” feature to the DRIP and are intended to encourage greater shareholder, customer and employee participation in the DRIP.  During the nine months endedSeptember 30, 2013 and 2012, plan participants invested $1,209,000 and $735,000, respectively, in additional shares as part of the DRIP.

From 1999 through 2003, the Company issued stock options to certain employees of the Company.  No stock options have been issued by the Company since 2003.  During the nine months endedSeptember 30, 2013, no stock options were exercised.  During the nine months endedSeptember 30, 2012, 5,671 stock options were exercised, resulting in approximately $631,000 in proceeds to the Company.

December 2012 Equity Issuance

On December 12, 2012, the Company completed an underwritten public offering of 1,696,250 shares of its common stock at a price to the public of $29.25 per share, including overallotments. Wells Fargo Securities served as sole book-runner for the offering. The offering was made pursuant to a “shelf” registration statement (including a prospectus) previously filed with and declared effective by the Securities and Exchange Commission in July 2012. The Company used the net proceeds of approximately $47.5 million to repay approximately $39 million of our short-term indebtedness, to fund capital expenditures and for other general corporate purposes.

2013 Construction Budget

The Board of Directors approved a $31.3 million construction budget for 2013, net of amounts to be financed by customer advances and contributions in aid of construction.  The Company is and will use some combination of its internally generated funds, remaining proceeds from its December 2012 equity issuance, borrowing under its available lines of credit, and the funds remaining under our 2011 debt issuance to fund the 2013 construction budget.

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As the Company looks forward to the remainder of 2013 and 2014, it anticipates continued reinvestment to replace aging infrastructure and to seek recovery through periodic WICA applications in Connecticut and the WISC recently approved by the Maine Legislature.  The total cost of that investment may exceed the amount of internally generated funds.  If so, the Company will consider external financing.  In order to maintain a balanced capital structure, we would consider both debt and equity issuances.  As the capital investment planning process is completed in the coming periods, the Company expects to provide a reasonable range of these potential financings.

Results of Operations

Three months ended September 30

Net Income for the three months ended September 30, 2013 increased from the same period in the prior year by $3,468,000 to $9,442,000. Earnings per basic average common share increased by $0.18 to $0.87 during the three months ended September 30, 2013.

This increase in Net Income is broken down by business segment as follows (in thousands):

Business Segment	September 30, 2013			September 30, 2012			Increase/(Decrease)
Water Activities	$	9,068		$	5,676		$	3,392
Real Estate Transactions	(7		)	(31		)	24
Services and Rentals	381			329			52
Total	$	9,442		$	5,974		$	3,468

The increase in the Water Activity segment’s Net Income was primarily due to the net effects of the variances listed below:

Revenue

Revenue from our water customers increased by $3,171,000, or 13.0%, to $27,632,000 for the three months ended September 30, 2013 when compared to the same period in 2012.  The primary reason for the increase in revenues was the implementation of the RAM in the third quarter of 2013 which contributed $2,762,000 in additional revenue in the period which represented the amount by which actual revenues in the first nine months of 2013 were less than the revenues allowed in Connecticut Water's most recent general rate proceeding for the nine month period. In future periods, Connecticut Water will record the RAM on a monthly basis, based upon our actual billing compared to approved rates, including WICA surcharges and record a regulatory asset or liability for future collection from or refund to customers. Additionally, BSWC contributed an additional $1,134,000 in revenue during the period. Excluding BSWC and the implementation of the RAM, the Company saw a decrease in revenue from water customers of $725,000, or approximately 3.0% during the three months ended September 30, 2013. The primary driver for the decrease in revenue in 2013 was a general decline in usage among all customer classes.

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Operation and Maintenance Expense

Operation and Maintenance (“O&M”) expense increased by $826,000, or 8.0%, for the three months ended September 30, 2013 when compared to the same period of 2012 primarily due to the acquisition of BSWC, which contributed $785,000 of incremental O&M expense. The following table presents the components of O&M expense both including and excluding BSWC (in thousands):

Expense Components	Actual September 30, 2013 O&M		Actual September 30, 2012 O&M		Actual Increase / (Decrease)			BSWC September 30, 2013 O&M		Adjusted Increase / (Decrease)
Pension	$	1,048	$	931	$	117		$	27	$	90
Customer costs	407		337		70			26		44
Medical	644		495		149			120		29
Property liability insurance	291		264		27			10		17
Purchased water	438		462		(24		)	—		(24		)
Post-retirement medical	187		213		(26		)	—		(26		)
Regulatory commission expense	85		113		(28		)	—		(28		)
Utility costs	932		897		35			77		(42		)
Maintenance	714		691		23			68		(45		)
Other benefits	276		334		(58		)	—		(58		)
Payroll	3,549		3,418		131			220		(89		)
Water treatment (including chemicals)	856		881		(25		)	79		(104		)
Other	1,672		1,237		435			158		277
Total	$	11,099	$	10,273	$	826		$	785	$	41

The increase in O&M expenses excluding the incremental expense as a result of the acquisition of BSWC, was approximately $41,000, or approximately 0.4%, in the third quarter of 2013 when compared to the same period in 2012.  The changes in individual items, excluding the impact of BSWC, are described below:

• The increase in Pension costs was attributable primarily to a decrease in the discount rate used in determining net periodic benefit costs in 2013;

• Customer costs increased primarily due to an increase in uncollectible accounts in the third quarter of 2013 when compared to the same period of 2012; and

• The primary driver in the increase in Other expense was due to the mark-to-market adjustment related to employee stock awards. The Company adjusts the value of those stock awards at the end of each reporting period based on the Company’s stock price on the last day of that period.

The increases described above were partially offset by the following decreases to O&M expense:

• Payroll costs decreased primarily due to a decrease in the number employees at September 30, 2013 when compared to September 30, 2012, excluding BSWC employees, and the capitalization of various ongoing projects that began throughout 2013; and

• Water treatment costs decreased primarily due to a reduction in the costs to dispose of waste generated at treatment plants.

The Company saw an approximate 12.4% increase in its Depreciation expense from the three months endedSeptember 30, 2013 compared to the same period in 2012.  The primary driver of this increase was approximately $168,000 in Depreciation expense attributable to BSWC.  Excluding the impact of BSWC, the Company's depreciation expense increased by approximately 5.4% for the three months endedSeptember 30, 2013. The remainder of the increase in Depreciation expense was due to higher Utility Plant in Service as of September 30, 2013 compared to September 30, 2012.

Income Tax expense decreased by $439,000 in the third quarter of 2013 when compared to the same period in 2012 due to a lower effective income tax rate and higher pre-tax net income. Excluding the impact of BSWC, Income Tax expense decreased by $448,000. The Company's effective tax rate decreased from 28.5% to 13.2% in the three months endedSeptember 30, 2013 and 2012. The adjustment to the reserve for the fixed capital credits and reserve for the adoption of the tangible property regulations offset a portion of the return to accrual for the 2012 tax return.

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Other Income (Deductions), Net of Taxes increased for the three months endedSeptember 30, 2013 by $675,000. The primary driver of this increase was the tax benefits arising from the Company's income tax provision to income tax return analysis during three months endedSeptember 30, 2013. Additionally, during the three months endedSeptember 30, 2012 the Company incurred costs associated with the acquisition of BSWC.

Total Interest and Debt Expense decreased by $505,000 in three months endedSeptember 30, 2013 when compared to the same period in 2012 due to an increase in the patronage income received from one of our banking partners and a decrease in Interest on Long-Term Debt due to the refinancing of approximately $54.6 million in long-term debt in the fourth quarter of 2012 and approximately $14.6 million in long-term debt in the first quarter of 2013 and the repayment of approximately $18.0 million in debt used to acquire Maine Water.

Nine months ended September 30

Net Income for the nine months endedSeptember 30, 2013 increased from the same period in the prior year by $4,318,000 to $16,365,000. Earnings per basic average common share increased by $0.12 to $1.51 during the nine months endedSeptember 30, 2013.

This increase in Net Income is broken down by business segment as follows (in thousands):

Business Segment	September 30, 2013			September 30, 2012		Increase/(Decrease)
Water Activities	$	15,229		$	10,084	$	5,145
Real Estate Transactions	(7		)	951		(958		)
Services and Rentals	1,143			1,012		131
Total	$	16,365		$	12,047	$	4,318

The increase in the Water Activity segment’s Net Income was primarily due to the net effects of the variances listed below:

Revenue

Revenue from our water customers increased by $5,557,000, or 8.6%, to $69,906,000 for the nine months endedSeptember 30, 2013 when compared to the same period in 2012. The primary reason for the increase in revenues was the acquisition of BSWC which contributed $3,173,000 in revenue during the nine months endedSeptember 30, 2013. Additionally, the implementation of the RAM in the third quarter of 2013 contributed $2,762,000 in additional revenue in the period which represented the amount by which actual revenues in the first nine months of 2013 were less than the revenues allowed in Connecticut Water's most recent general rate proceeding for the nine month period. In future periods, Connecticut Water will record the RAM on a monthly basis, based upon our actual billing compared to approved rates, including WICA surcharges and record a regulatory asset or liability for future collection from or refund to customers. Excluding BSWC and the implementation of RAM, the Company saw a decrease in revenue from water customers of $378,000, or approximately 0.6% during the nine months endedSeptember 30, 2013. The primary driver for the decrease in revenue in 2013 was a general decline in usage among all customer classes.

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Operation and Maintenance Expense

Operation and Maintenance (“O&M”) expense increased by $1,850,000, or 6.2%, for the nine months endedSeptember 30, 2013 when compared to the same period of 2012 primarily due to the acquisition of BSWC, which contributed $2,383,000 of incremental O&M expense.  The following table presents the components of O&M expense both including and excluding BSWC (in thousands):

Expense Components	Actual September 30, 2013 O&M		Actual September 30, 2012 O&M		Actual Increase / (Decrease)			BSWC September 30, 2013 O&M		Adjusted Increase / (Decrease)
Customer	$	1,135	$	769	$	366		$	114	$	252
Outside services	1,608		1,099		509			296		213
Pension	3,060		2,793		267			82		185
Maintenance	2,007		1,737		270			170		100
Investor relations	579		487		92			—		92
Purchased water	1,128		1,089		39			—		39
Post retirement medical	557		638		(81		)	—		(81		)
Utility costs	2,817		2,743		74			190		(116		)
Amston Lake water quality monitoring costs (non-labor)	—		135		(135		)	—		(135		)
Other benefits	726		906		(180		)	—		(180		)
Medical	2,062		1,862		200			390		(190		)
Water treatment (including chemicals)	2,141		2,238		(97		)	214		(311		)
Payroll	10,586		10,167		419			751		(332		)
Other	3,428		3,321		107			176		(69		)
Total	$	31,834	$	29,984	$	1,850		$	2,383	$	(533	)

The decrease in O&M expenses, excluding the incremental expense as a result of the acquisition of BSWC, was approximately $533,000, or approximately 1.8%, in the nine months endedSeptember 30, 2013 when compared to the same period in 2012.  The changes in individual items, excluding the impact of BSWC, are described below:

• Payroll costs decreased primarily due to a decrease in the number employees at September 30, 2013 when compared to September 30, 2012, excluding BSWC employees, and the capitalization of employee time related to an ongoing procurement project that began in the first quarter of 2013. This project is designed to help reduce the costs of water infrastructure projects in future periods;

• Water treatment costs decreased primarily due to a reduction in the costs to dispose of waste generated at treatment plants; and

• Medical costs decreased in the first nine months of 2013 when compared to the same period in 2012 due primarily to a reduction in claims filed by plan participants.

The decreases described above were partially offset by the following increases to O&M expense:

• Customer costs increased in 2013 primarily due to an increase in bad debt expense and an increase in postage costs for customer mailings;

• Outside services expense increased primarily due to an increase in consulting fees related to the organizational design portion of the Company's ongoing procurement project; and

• The increase in Pension costs was attributable primarily to a decrease in the discount rate used in determining net periodic benefit costs in 2013.

The Company saw an approximate 11.5% increase in its Depreciation expense from the nine months endedSeptember 30, 2013 compared to the same period in 2012.  The primary driver of this increase was approximately $504,000 in Depreciation expense attributable to BSWC.  Excluding the impact of BSWC, the Company's depreciation expense increased by approximately 4.4% for the nine months endedSeptember 30, 2013. The remainder of the increase in Depreciation expense was due to higher Utility Plant in Service as of September 30, 2013 compared to September 30, 2012.

Income Tax expense increased by $62,000 in the nine months endedSeptember 30, 2013 when compared to the same period in 2012 due to a lower effective income tax rate and higher pre-tax net income. Excluding the impact of BSWC, which had a tax

30

benefit for the nine months endedSeptember 30, 2013, Income Tax expense increased by $139,000. The Company's effective tax rate decreased from 34.0% to 25.9% in the nine months endedSeptember 30, 2013 and 2012. The reserve made for the fixed capital credits and the adoption of the tangible property regulations offset the return to accrual for the 2012 tax return. The inclusion of an estimate of the 2013 repair deduction in the current year provision  led to the decrease in the overall effective tax rate.

Other Income (Deductions), Net of Taxes increased for the nine months endedSeptember 30, 2013 by $36,000. During the nine months endedSeptember 30, 2012, the Company completed a sale of land to the Town of Plymouth, CT and adjusted valuation allowances which generated $951,000 of Net Income. During the same period of 2013, the Company completed the sale of a small rental property and adjusted valuation allowances which generated a $7,000 loss. Offsetting this unfavorable variance was the impact of tax benefits arising from the Company's income tax provision to income tax return analysis during nine months endedSeptember 30, 2013.

Total Interest and Debt Expense decreased by $1,917,000 in the nine months endedSeptember 30, 2013 when compared to the same period in 2012 due to an increase in the patronage income from one of our banking partners and a decrease in Interest on Long-Term Debt due to the refinancing of approximately $54.6 million in long-term debt in the fourth quarter of 2012 and approximately $14.6 million in long-term debt in the first quarter of 2013 and the repayment of approximately $18.0 million in debt used to acquire Maine Water.

Commitments and Contingencies

On June 11, 2013, the Company was notified by the Connecticut Department of Revenue Services that its state tax filings for the years 2009 through 2011 would be reviewed during the fourth quarter of 2013. See Note 9 for further details.

There were no material changes under this subheading to any of the other items previously disclosed by the Company in its Annual Report on Form 10-K for the period year December 31, 2012.

Forward-Looking Information

Certain statements made in this Quarterly Report on Form 10-Q, (“10-Q”) are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”) that are made based upon, among other things, our current assumptions, expectations and beliefs concerning future developments and their potential effect on us.  These forward-looking statements involve risks, uncertainties and other factors, many of which are outside our control, which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements.  In some cases you can identify forward-looking statements where statements are preceded by, followed by or include the words “believes,” “expects,” “anticipates,” “plans,” “future,” “potential,” “probably,” “predictions,” “continue” or the negative of such terms or similar expressions.  Forward-looking statements included in this 10-Q, include, but are not limited to, statements regarding:

• projected capital expenditures and related funding requirements;

• the availability and cost of capital;

• developments, trends and consolidation in the water and wastewater utility industries;

• dividend payment projections;

• our ability to successfully acquire and integrate regulated water and wastewater systems, as well as unregulated businesses, that are complementary to our operations and the growth of our business;

• the capacity of our water supplies, water facilities and wastewater facilities;

• the impact of limited geographic diversity on our exposure to unusual weather;

• the impact of conservation awareness of customers and more efficient plumbing fixtures and appliances on water usage per customer;

• our capability to pursue timely rate increase requests;

• our authority to carry on our business without unduly burdensome restrictions;

• our ability to maintain our operating costs at the lowest possible level, while providing good quality water service;

• our ability to obtain fair market value for condemned assets;

• the impact of fines and penalties;

• changes in laws, governmental regulations and policies, including environmental, health and water quality and public utility regulations and policies;

• the decisions of governmental and regulatory bodies, including decisions to raise or lower rates;

• our ability to successfully extend and expand our service contract work within our Service and Rentals Segment in both Connecticut and Maine;

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• the development of new services and technologies by us or our competitors;

• the availability of qualified personnel;

• the condition of our assets;

• the impact of legal proceedings;

• the outcome of the review of the Company's Connecticut state tax filings by the Connecticut Department of Revenue Services;

• general economic conditions;

• the profitability of our Real Estate Segment, which is subject to the amount of land we have available for sale and/or donation, the demand for any available land, the continuation of the current state tax benefits relating to the donation of land for open space purposes and regulatory approval for land dispositions; and

• acquisition-related costs and synergies.

Because forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including but not limited to:

• changes in general economic, business, credit and financial market conditions;

• changes in environmental conditions, including those that result in water use restrictions;

• abnormal weather conditions;

• increases in energy and fuel costs;

• unfavorable changes to the federal and/or state tax codes;

• significant changes in, or unanticipated, capital requirements;

• significant changes in our credit rating or the market price of our common stock;

• our ability to integrate businesses, technologies or services which we may acquire, including the acquisitions of The Maine Water Company and the Biddeford and Saco Water Company in 2012;

• our ability to manage the expansion of our business;

• the extent to which we are able to develop and market new and improved services;

• the continued demand by telecommunication companies for antenna site leases on our property;

• the effect of the loss of major customers;

• our ability to retain the services of key personnel and to hire qualified personnel as we expand;

• labor disputes;

• increasing difficulties in obtaining insurance and increased cost of insurance;

• cost overruns relating to improvements or the expansion of our operations;

• increases in the costs of goods and services;

• civil disturbance or terroristic threats or acts; and

• changes in accounting pronouncements.

Given these uncertainties, you should not place undue reliance on these forward-looking statements.  You should read this 10-Q, the Annual Report on Form 10-K for the fiscal year ended December 31, 2012 (“10-K”) and the documents that we incorporate by reference into the 10-K completely and with the understanding that our actual future results, performance and achievements may be materially different from what we expect.  These forward-looking statements represent our assumptions, expectations and beliefs only as of the date of this 10-Q.  Except for our ongoing obligations to disclose certain information under the federal securities laws, we are not obligated, and assume no obligation, to update these forward-looking statements, even though our situation may change in the future.  For further information or other factors which could affect our financial results and such forward-looking statements, see Part I, Item 1A“Risk Factors” found in the 10-K.  We qualify all of our forward-looking statements by these cautionary statements.

Part I, Item 3:  Quantitative and Qualitative Disclosure About Market Risk

The primary market risk faced by the Company is interest rate risk.  The Company has no exposure to derivative financial instruments or financial instruments with significant credit risk or off-balance-sheet risks.  In addition, the Company is not subject, in any material respect, to any currency or other commodity risk.

The Company is subject to the risk of fluctuating interest rates in the normal course of business.  The Company’s exposure to interest fluctuations is managed at the Company and subsidiary operations levels through the use of a combination of fixed rate long-term debt, variable long-term debt and short-term variable borrowings under financing arrangements entered into by the Company and its subsidiaries.  The Company has $35.0 million of variable rate lines of credit with two banks, under which the interim bank loans payable at September 30, 2013 were approximately $1.3 million.

32

As of September 30, 2013, the Company had $22.05 million of variable-rate long-term debt outstanding.  Holding other variables constant, including levels of indebtedness, a one-percentage point change in interest rates would impact pre-tax earnings by approximately $0.2 million, annually.  The Company monitors its exposure to variable rate debt and will make future financing decisions as the need arises.

Part I, Item 4:  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of September 30, 2013, management, including the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)).  Based upon, and as of the date of that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

During the quarter ended September 30, 2013, there have been no changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting

On December 10, 2012, the acquisition of BSWC closed. The Company is currently in the process of integrating BSWC’s operations, processes, and internal controls. See Note 11 to the Condensed Consolidated Financial Statements in Part I, Item I for additional information relating to the acquisition.

Part II, Item 1:  Legal Proceedings

We are involved in various legal proceedings from time to time.  Although the results of legal proceedings cannot be predicted with certainty, there are no pending legal proceedings to which we or any of our subsidiaries are a party or to which any of our properties is the subject that presents a reasonable likelihood of a material adverse impact on the Company.

Part II, Item 1A: Risk Factors

Information about the material risks related to our business, financial condition and results of operations for the three and nine months ended ended September 30, 2013 does not materially differ from that set out under Part I, Item 1A "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2012. You should carefully consider the risk factors and other information discussed in our Annual Report on Form 10-K for the year ended December 31, 2012, as well as the information provided elsewhere in this report. Additional risks, uncertainties and other factors not presently known to us or that we currently deem immaterial may also impair the Company's business operations, financial condition or operating results.

Part II, Item 2: Unregistered Sales of Equity Securities and Use of Proceeds

No stock repurchases were made during the quarter ended September 30, 2013.

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Part II, Item 6: Exhibits

Exhibit Number	Description
2.1	Agreement and Plan of Merger between Connecticut Water Service, Inc., Biddeford and Saco Water Company, and OAC, Inc. (Exhibit 2.1 to Form 8-K filed on July 19, 2012)
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 December 31, 1998).
3.2	By-Laws, as amended, of Connecticut Water Service, Inc. as amended and restated as of August 16, 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 December 31, 1998).
3.4	Certificate of Amendment to the Certificate of Incorporation of Connecticut Water Service, Inc. dated August 6, 2001 (Exhibit 3.4 to Form 10-K for the year ended December 31, 2001).
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 March 31, 2003).
10.1	Settlement Agreement between and among The Connecticut Water Company, Office of Consumer Counsel and the Attorney General for the State of Connecticut, dated June 28, 2013 (Exhibit 10.1 to Form 8-K current report filed on July 2, 2013).
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**	Certification of Eric W. Thornburg, Chief Executive Officer, and David C. Benoit, Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase
101.DEF**	XBRL Taxonomy Extension Definition Linkbase
101.LAB**	XBRL Taxonomy Extension Label Linkbase
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase
* filed herewith
** furnished herewith

34

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Connecticut Water Service, Inc. (Registrant)
Date:	November 8, 2013	By:  /s/ David C. Benoit
		David C. Benoit Vice President – Finance and Chief Financial Officer
Date:	November 8, 2013	By:  /s/ Nicholas A. Rinaldi
		Nicholas A. Rinaldi Controller

35

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

I, Eric W. Thornburg, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Connecticut Water Service, Inc. (the “registrant”).

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Eric W. Thornburg

Eric W. Thornburg

President and Chief Executive Officer

November 8, 2013

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

I, David C. Benoit, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Connecticut Water Service, Inc. (the “registrant”).

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ David C. Benoit

David C. Benoit

Chief Financial Officer and Vice President – Finance

November 8, 2013

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. Section 1350

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Connecticut Water Service, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Eric W. Thornburg, the Chief Executive Officer of the Company, and David C. Benoit, the Chief Financial Officer of the Company, do each hereby certify, to the best of his knowledge, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Eric W. Thornburg

Eric W. Thornburg

November 8, 2013

/s/ David C. Benoit

David C. Benoit

November 8, 2013

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Fair Value Disclosures

9 Months Ended

Sep. 30, 2013

Notes To Financial Statements [Abstract]

Fair Value Disclosures

Fair Value Disclosures

FASB Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures (“FASB ASC 820”) provides enhanced guidance for using fair value to measure assets and liabilities and expands disclosure with respect to fair value measurements.

FASB ASC 820 establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs).  The hierarchy consists of three broad levels, as follows:

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.

The following table summarizes our financial instruments measured at fair value on a recurring basis within the fair value hierarchy as of September 30, 2013 (in thousands):

	Level 1		Level 2		Level 3		Total
Asset Type:
Company Owned Life Insurance	$	—	$	2,719	$	—	$	2,719
Money Market Fund	115		—		—		115
Mutual Funds:
Equity Funds (1)	1,378		—		—		1,378
Total	$	1,493	$	2,719	$	—	$	4,212

The following table summarizes our financial instruments measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2012 (in thousands):

	Level 1		Level 2		Level 3		Total
Asset Type:
Company Owned Life Insurance	$	—	$	2,538	$	—	$	2,538
Money Market Fund	28		—		—		28
Mutual Funds:
Equity Funds (1)	1,046		—		—		1,046
Total	$	1,074	$	2,538	$	—	$	3,612

(1) Mutual funds consist primarily of equity securities and are presented on the Other Property and Investments line item of the Company's Condensed Consolidated Balance Sheets.

The fair value of Company Owned Life Insurance is based on the cash surrender value of the contracts. These contracts are based principally on a referenced pool of investment funds that actively redeem shares and are observable and measurable and are presented on the Other Property and Investments line item of the Company's Condensed Consolidated Balance Sheets.

The following methods and assumptions were used to estimate the fair value of each of the following financial instruments, which are not recorded at fair value on the financial statements.

Cash and cash equivalents – Cash equivalents consist of highly liquid instruments with original maturities at the time of purchase of three months or less.  The carrying amount approximates fair value.  Under the fair value hierarchy the fair value of cash and cash equivalents is classified as a Level 1 measurement.

Restricted Cash – As part of the Connecticut Water’s December 2011 and Maine Water's June 2013 bond offerings, the Company recorded unused proceeds from this bond issuance as restricted cash as the funds can only be used for certain capital expenditures.  The Company expects to use the remainder of the proceeds during 2013 and 2014, as the approved capital expenditures are completed.  The carrying amount approximates fair value.  Under the fair value hierarchy the fair value of restricted cash is classified as a Level 1 measurement.

Long-Term Debt – The fair value of the Company's fixed rate long-term debt is based upon borrowing rates currently available to the Company.  As of September 30, 2013 and December 31, 2012, the estimated fair value of the Company's long-term debt was $181,160,000 and $194,900,000, respectively, as compared to the carrying amounts of $175,533,000 and $178,475,000, respectively. The estimated fair value of long term debt was calculated using a discounted cash flow model that uses comparable interest rates and yield curve data based on the A-rated MMD (Municipal Market Data) Index which is the benchmark of current municipal bond yields. Under the fair value hierarchy, the fair value of long term debt is classified as a Level 2 measurement.

The fair values shown above have been reported to meet the disclosure requirements of accounting principles generally accepted in the United States and do not purport to represent the amounts at which those obligations would be settled.

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CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Statement [Abstract]
Operating Revenues	$ 27,632	$ 24,461	$ 69,906	$ 64,349
Operating Expenses
Operation and Maintenance	11,099	10,273	31,834	29,984
Depreciation	2,684	2,387	7,988	7,166
Income Taxes	1,659	2,098	5,306	5,244
Taxes Other Than Income Taxes	2,135	1,985	6,105	5,675
Total Operating Expenses	17,577	16,743	51,233	48,069
Net Operating Revenues	10,055	7,718	18,673	16,280
Other Utility Income, Net of Taxes	194	243	579	607
Total Utility Operating Income	10,249	7,961	19,252	16,887
Other Income (Deductions), Net of Taxes
Gain (Loss) on Real Estate Transactions	(7)	(31)	(7)	951
Non-Water Sales Earnings	381	329	1,143	1,012
Allowance for Funds Used During Construction	79	59	209	194
Other	423	(156)	251	(597)
Total Other Income, Net of Taxes	876	201	1,596	1,560
Interest and Debt Expense
Interest on Long-Term Debt	1,827	1,925	5,405	5,772
Other Interest Charges	(142)	172	(842)	359
Amortization of Debt Expense	(2)	91	(80)	269
Total Interest and Debt Expense	1,683	2,188	4,483	6,400
Net Income	9,442	5,974	16,365	12,047
Preferred Stock Dividend Requirement	10	10	29	29
Net Income Applicable to Common Stock	$ 9,432	$ 5,964	$ 16,336	$ 12,018
Weighted Average Common Shares Outstanding:
Basic (in shares)	10,835	8,689	10,819	8,669
Diluted (in shares)	11,006	8,829	10,987	8,805
Earnings Per Common Share:
Basic (in dollars per share)	$ 0.87	$ 0.69	$ 1.51	$ 1.39
Diluted (in dollars per share)	$ 0.86	$ 0.67	$ 1.49	$ 1.36
Dividends Per Common Share (in dollars per share)	$ 0.2475	$ 0.2425	$ 0.7325	$ 0.7175

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation charged to other accounts	$ 533	$ 330

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Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2013

Accumulated Other Comprehensive Income (Loss) [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The changes in Accumulated Other Comprehensive Income/(Loss) ("AOCI") by component, net of tax, for the three and nine months endedSeptember 30, 2013 is as follows (in thousands):

Three Months Ended September 30, 2013	Interest Rate Swap			Unrealized Gains on Investments		Defined Benefit Items			Total
Beginning Balance (a)	$	(40	)	$	122	$	(1,289	)	$	(1,207	)
Other Comprehensive Income Before Reclassification	—			54		—			54
Amounts Reclassified from AOCI	40			—		22			62
Net current-period Other Comprehensive Income	40			54		22			116
Ending Balance	$	—		$	176	$	(1,267	)	$	(1,091	)
Nine Months Ended September 30, 2013	Interest Rate Swap			Unrealized Gains on Investments		Defined Benefit Items			Total
Beginning Balance (a)	$	(41	)	$	69	$	(1,356	)	$	(1,328	)
Other Comprehensive Income Before Reclassification	—			95		—			95
Amounts Reclassified from AOCI	41			12		89			142
Net current-period Other Comprehensive Income	41			107		89			237
Ending Balance	$	—		$	176	$	(1,267	)	$	(1,091	)
(a) All amounts shown are net of tax. Amounts in parentheses indicate loss.

The following table sets forth the amounts reclassified from AOCI by component and the affected line item on the Condensed Consolidated Statement of Income for the three and nine months endedSeptember 30, 2013 (in thousands):

Details about Other AOCI Components	Amounts Reclassified from AOCI Three Months Ended September 30, 2013(a)		Amounts Reclassified from AOCI Nine Months Ended September 30, 2013(a)		Affected Line Items on Income Statement
Amortization of Cash Flow Hedging Instrument	28		29		Other Income
Tax benefit	12		12		Other Income
	40		41
Realized Gains on Investments	—		21		Other Income
Tax expense	—		(9	)	Other Income
	—		12
Amortization of Recognized Net Gain from Defined Benefit Items	56		169		Other Income (b)
Tax expense	(34	)	(80	)	Other Income
	22		89
Total Reclassifications for the period, net of tax	62		142
(a) Amounts in parentheses indicate loss/expense.
(b) Included in computation of net periodic pension cost (see Note 2 for additional details).

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Segment Reporting

9 Months Ended

Sep. 30, 2013

Notes To Financial Statements [Abstract]

Segment Reporting

Segment Reporting

The Company operates principally in three business segments: Water Activities, Real Estate Transactions, and Services and Rentals.  Results of operations for the three and nine months endedSeptember 30, 2013 include the results of BSWC. Financial data for the segments is as follows (in thousands):

Three Months Ended September 30, 2013
Segment	Revenues		Pre-Tax Income (Loss)			Income Tax Expense (Benefit)			Net Income (Loss)
Water Activities	$	27,982	$	10,294		$	1,226		$	9,068
Real Estate Transactions	95		(8		)	(1		)	(7		)
Services and Rentals	1,491		588			207			381
Total	$	29,568	$	10,874		$	1,432		$	9,442

Three Months Ended September 30, 2012
Segment	Revenues		Pre-Tax Income		Income Tax Expense		Net Income (Loss)
Water Activities	$	24,919	$	7,795	$	2,119	$	5,676
Real Estate Transactions	—		—		31		(31		)
Services and Rentals	1,586		559		230		329
Total	$	26,505	$	8,354	$	2,380	$	5,974

Nine Months Ended September 30, 2013
Segment	Revenues		Pre-Tax Income (Loss)			Income Tax Expense (Benefit)			Net Income (Loss)
Water Activities	$	70,964	$	20,223		$	4,994		$	15,229
Real Estate Transactions	95		(8		)	(1		)	(7		)
Services and Rentals	4,357		1,875			732			1,143
Total	$	75,416	$	22,090		$	5,725		$	16,365

Nine Months Ended September 30, 2012
Segment	Revenues		Pre-Tax Income		Income Tax Expense		Net Income
Water Activities	$	65,480	$	15,209	$	5,125	$	10,084
Real Estate Transactions	1,450		1,331		380		951
Services and Rentals	4,287		1,712		700		1,012
Total	$	71,217	$	18,252	$	6,205	$	12,047

The revenues shown in Water Activities above consisted of revenues from water customers of $27,632,000 and $24,461,000 for the three months endedSeptember 30, 2013 and 2012, respectively.  Additionally, there were revenues associated with utility plant leased to others of $350,000 and $458,000 for the three months endedSeptember 30, 2013 and 2012, respectively. The revenues shown in Water Activities above consisted of revenues from water customers of $69,906,000 and $64,349,000 for the nine months endedSeptember 30, 2013 and 2012, respectively.  Additionally, there were revenues associated with utility plant leased to others of $1,058,000 and $1,131,000 for the nine months endedSeptember 30, 2013 and 2012, respectively. The revenues from water customers for the three and nine months endedSeptember 30, 2013 include $2,762,000 in revenues related to the implementation of the RAM during the third quarter of 2013.

The Company owns various small, discrete parcels of land that are no longer required for water supply purposes.  From time to time, the Company may sell or donate these parcels, depending on various factors, including the current market for land, the amount of tax benefits received for donations and the Company’s ability to use any benefits received from donations.  During the nine months endedSeptember 30, 2013, the Company completed the sale of a small rental property in the Town of Killingly, CT. During the nine months endedSeptember 30, 2012, the Company completed the previously announced sale of a parcel of land in the Town of Plymouth, CT.

Assets by segment (in thousands):

	September 30, 2013		December 31, 2012
Total Plant and Other Investments:
Water Activities	$	468,240	$	453,625
Non-Water	705		680
	468,945		454,305
Other Assets:
Water Activities	155,602		118,020
Non-Water	11,055		6,650
	166,657		124,670
Total Assets	$	635,602	$	578,975

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Aquisitions Goodwill Rollforward (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Goodwill [Line Items]
Goodwill	$ 31,685	$ 31,685

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Fair Value Disclosures Fair Value of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	$ 4,212	$ 3,612
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	1,493	1,074
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	2,719	2,538
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	0	0
Cash Surrender Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	2,719	2,538
Cash Surrender Value [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	0	0
Cash Surrender Value [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	2,719	2,538
Cash Surrender Value [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	0	0
Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	115	28
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	115	28
Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	0	0
Money Market Funds [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	0	0
Equity Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	1,378	1,046
Equity Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	1,378	1,046
Equity Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	0	0
Equity Funds [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	$ 0	$ 0

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Segment Reporting Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Reconciliation of Revenue from Segments to Consolidated [Table Text Block]

Financial data for the segments is as follows (in thousands):

Three Months Ended September 30, 2013
Segment	Revenues		Pre-Tax Income (Loss)			Income Tax Expense (Benefit)			Net Income (Loss)
Water Activities	$	27,982	$	10,294		$	1,226		$	9,068
Real Estate Transactions	95		(8		)	(1		)	(7		)
Services and Rentals	1,491		588			207			381
Total	$	29,568	$	10,874		$	1,432		$	9,442

Three Months Ended September 30, 2012
Segment	Revenues		Pre-Tax Income		Income Tax Expense		Net Income (Loss)
Water Activities	$	24,919	$	7,795	$	2,119	$	5,676
Real Estate Transactions	—		—		31		(31		)
Services and Rentals	1,586		559		230		329
Total	$	26,505	$	8,354	$	2,380	$	5,974

Nine Months Ended September 30, 2013
Segment	Revenues		Pre-Tax Income (Loss)			Income Tax Expense (Benefit)			Net Income (Loss)
Water Activities	$	70,964	$	20,223		$	4,994		$	15,229
Real Estate Transactions	95		(8		)	(1		)	(7		)
Services and Rentals	4,357		1,875			732			1,143
Total	$	75,416	$	22,090		$	5,725		$	16,365

Nine Months Ended September 30, 2012
Segment	Revenues		Pre-Tax Income		Income Tax Expense		Net Income
Water Activities	$	65,480	$	15,209	$	5,125	$	10,084
Real Estate Transactions	1,450		1,331		380		951
Services and Rentals	4,287		1,712		700		1,012
Total	$	71,217	$	18,252	$	6,205	$	12,047

Reconciliation of Assets from Segment to Consolidated [Table Text Block]

Assets by segment (in thousands):

	September 30, 2013		December 31, 2012
Total Plant and Other Investments:
Water Activities	$	468,240	$	453,625
Non-Water	705		680
	468,945		454,305
Other Assets:
Water Activities	155,602		118,020
Non-Water	11,055		6,650
	166,657		124,670
Total Assets	$	635,602	$	578,975

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Fair Value Disclosures Fair Value Disclosures (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The following table summarizes our financial instruments measured at fair value on a recurring basis within the fair value hierarchy as of September 30, 2013 (in thousands):

	Level 1		Level 2		Level 3		Total
Asset Type:
Company Owned Life Insurance	$	—	$	2,719	$	—	$	2,719
Money Market Fund	115		—		—		115
Mutual Funds:
Equity Funds (1)	1,378		—		—		1,378
Total	$	1,493	$	2,719	$	—	$	4,212

The following table summarizes our financial instruments measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2012 (in thousands):

	Level 1		Level 2		Level 3		Total
Asset Type:
Company Owned Life Insurance	$	—	$	2,538	$	—	$	2,538
Money Market Fund	28		—		—		28
Mutual Funds:
Equity Funds (1)	1,046		—		—		1,046
Total	$	1,074	$	2,538	$	—	$	3,612

(1) Mutual funds consist primarily of equity securities and are presented on the Other Property and Investments line item of the Company's Condensed Consolidated Balance Sheets.

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Aquisitions Pro Forma Summary for Prior Year (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Operating Revenues	$ 27,632,000	$ 24,461,000	$ 69,906,000	$ 64,349,000
Regulated Operating Revenue, Other	350,000	458,000	1,058,000	1,131,000
Revenues	29,568,000	26,505,000	75,416,000	71,217,000
Net Income	9,442,000	5,974,000	16,365,000	12,047,000
Earnings Per Share, Basic	$ 0.87	$ 0.69	$ 1.51	$ 1.39
Earnings Per Share, Diluted	$ 0.86	$ 0.67	$ 1.49	$ 1.36
Biddeford and Saco Water Company Acquisition [Member]
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Operating Revenues	1,134,000	25,703,000	3,173,000	67,658,000
Regulated Operating Revenue, Other	0	458,000	0	1,131,000
Real Estate Revenue, Net	0	0	0	1,450,000
Sales Revenue, Services, Net	22,000	1,608,000	85,000	4,375,000
Revenues	1,156,000	27,769,000	3,258,000	74,614,000
Net Income	$ 24,000	$ 6,035,000	$ (75,000)	$ 12,170,000
Earnings Per Share, Basic	$ 0.00	$ 0.69	$ (0.01)	$ 1.40
Earnings Per Share, Diluted		$ 0.68		$ 1.38

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Accumulated Other Comprehensive Income (Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Jun. 30, 2013	Dec. 31, 2012
Amounts Recognized in Other Comprehensive Income [Line Items]
Other Comprehensive Income (Loss), Reclassification Adjustment for Sale of Securities Included in Net Income, before Tax	$ 0		$ 21
Other Comprehensive Income (Loss), Reclassification Adjustment for Sale of Securities Included in Net Income, Tax	0		(9)
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax	0		0		(40)	(41)
Accumulated Other Comprehensive Loss	(1,091)		(1,091)		(1,207)	(1,328)
Other Comprehensive Income Loss Derivatives Before Reclassification Adjustments Net Of Tax	0		0
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax	40		41
Other Comprehensive Income (Loss), Reclassification Adjustment for Sale of Securities Included in Net Income, Net of Tax	0		12
Other Comprehensive Income (Loss), Reclassification, Pension and Other Postretirement Benefit Plans, Net Gain (Loss) Recognized in Net Periodic Benefit Cost, before Tax	56		169
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Tax	(34)		(80)
Accumulated Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax	176		176		122	69
Accumulated Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net of Tax	(1,267)		(1,267)		(1,289)	(1,356)
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, before Reclassification Adjustments, Net of Tax	54		95
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, before Reclassification Adjustments, Net of Tax	0		0
Total Other Comprehensive Income Before Reclassification, Net of Tax	54		95
Other Comprehensive Income Loss Reclassification Adjustment Derivatives Included In Net Income Net Of Tax	40		41
Other Comprehensive Income (Loss), Reclassification, Pension and Other Postretirement Benefit Plans, Net Gain (Loss) Recognized in Net Periodic Benefit Cost, Net of Tax	22		89
Total Amounts Reclassified From AOCI, Net of Tax	62		142
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax	54		107
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax	22		89
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	$ 116	$ 13	$ 237	$ 10

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Segment Reporting Segment Reporting (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Segment Reporting Information [Line Items]
Revenues	$ 29,568	$ 26,505	$ 75,416	$ 71,217
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest	10,874	8,354	22,090	18,252
Income Tax Expense (Benefit), Continuing Operations	1,432	2,380	5,725	6,205
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	9,442	5,974	16,365	12,047
Water Activities [Member]
Segment Reporting Information [Line Items]
Revenues	27,982	24,919	70,964	65,480
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest	10,294	7,795	20,223	15,209
Income Tax Expense (Benefit), Continuing Operations	1,226	2,119	4,994	5,125
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	9,068	5,676	15,229	10,084
Real Estate Transactions [Member]
Segment Reporting Information [Line Items]
Revenues	95	0	95	1,450
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest	(8)	0	(8)	1,331
Income Tax Expense (Benefit), Continuing Operations	(1)	31	(1)	380
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	(7)	(31)	(7)	951
Services and Rentals [Member]
Segment Reporting Information [Line Items]
Revenues	1,491	1,586	4,357	4,287
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest	588	559	1,875	1,712
Income Tax Expense (Benefit), Continuing Operations	207	230	732	700
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ 381	$ 329	$ 1,143	$ 1,012

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Pension and Other Post-Retirement Benefits In Text Linking (Details) (Pension Plans, Defined Benefit [Member], USD $)	Sep. 30, 2013
Pension Plans, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Estimated Future Employer Contributions in Next Fiscal Year	$ 2,490,000

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Income Tax Expense Income Tax Expense (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013 Rate	Sep. 30, 2012 Rate	Sep. 30, 2013 Rate	Sep. 30, 2012 Rate
Operating Loss Carryforwards [Line Items]
Reserve Against Fixed Capital Investment Credits Claimed in Prior Years	$ 900,000		$ 2,300,000
Effective Income Tax Rate, Continuing Operations	13.20%	28.50%	25.90%	34.00%
Effective Tax Rate Excluding Reserve Against Fixed Capital Investment Credits Claimed in Prior Years	16.10%		27.30%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate	41.00%		41.00%

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Long-Term Debt Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2013

Long-term Debt, Unclassified [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

Long-Term Debt at September 30, 2013 and December 31, 2012 consisted of the following (in thousands):

		2013			2012
Connecticut Water Service, Inc.:
4.09%	Term Loan Note	$	16,653		$	17,337
The Connecticut Water Company:
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%	2007 A Series, Due 2037	—			14,550
5.10%	2009 A Series, Due 2039	19,950			19,950
5.00%	2011 A Series, Due 2021	23,651			23,797
3.16%	CoBank Note Payable, Due 2020	8,000			8,000
3.51%	CoBank Note Payable, Due 2022	14,795			14,795
4.29%	CoBank Note Payable, Due 2028	17,020			17,020
4.72%	CoBank Note Payable, Due 2032	14,795			14,795
4.75%	CoBank Note Payable, Due 2033	14,550			—
Total The Connecticut Water Company		134,811			134,957
The Maine Water Company:
8.95%	1994 Series G, Due 2024	9,000			9,000
2.68%	1999 Series J, Due 2019	474			524
0.00%	2001 Series K, Due 2031	739			780
2.58%	2002 Series L, Due 2022	90			98
1.53%	2003 Series M, Due 2023	401			421
1.73%	2004 Series N, Due 2024	451			471
0.00%	2004 Series O, Due 2034	140			147
1.76%	2006 Series P, Due 2026	451			471
1.57%	2009 Series R, Due 2029	242			247
0.00%	2009 Series S, Due 2029	717			762
0.00%	2009 Series T, Due 2029	2,012			2,137
0.00%	2012 Series U, Due 2042	171			177
1.00%	2013 Series V, Due 2033	1,410			—
2.52%	CoBank Note Payable, Due 2017	1,965			1,965
Total The Maine Water Company		18,263			17,200
The Biddeford & Saco Water Company
6.45%	Series M, Due 2014	2,700			2,700
7.72%	Series L, Due 2018	2,250			2,250
2.40%	Series N, Due 2022	1,297			1,297
1.86%	Series O, Due 2025	862			862
2.23%	Series P, Due 2028	1,354			1,354
Various	Various Capital Leases	94			126
Total The Biddeford & Saco Water Company		8,557			8,589
Add:  Acquisition Fair Value Adjustment		1,352			1,696
Less:  Current Portion		(4,103		)	(1,304		)
Total Long-Term Debt		$	175,533		$	178,475

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Other Comprehensive Income, net of tax
Qualified Cash Flow Hedging Instrument Expense, net of tax benefitof	$ 12	$ 1	$ 12	$ 1
Reclassification to Pension and Post-Retirement Benefits Plans, net of tax (expense) benefit of	(34)	15	(80)	46
Unrealized Investment loss, net of tax expense of	$ (31)	$ (20)	$ (66)	$ (41)

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CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (Parenthetical) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Dividends Declared:
Common Stock (in dollars per share)	$ 0.2475	$ 0.2425	$ 0.7325	$ 0.7175
Cumulative Preferred Stock
Dividends Declared:
Preferred Stock (in dollars per share)	$ 0.225	$ 0.225	$ 0.675	$ 0.675
Series A Voting
Dividends Declared:
Preferred Stock (in dollars per share)	$ 0.20	$ 0.20	$ 0.60	$ 0.60

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Basis of Preparation of Financials

9 Months Ended

Sep. 30, 2013

Notes To Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. Basis of Preparation of Financials

The condensed consolidated financial statements included herein have been prepared by Connecticut Water Service, Inc. and Subsidiaries (the “Company”), pursuant to the rules and regulations of the Securities and Exchange Commission and reflect all adjustments that are of a normal recurring nature which are, in the opinion of management, necessary to a fair statement of the results for interim periods.  The Company’s primary operating subsidiaries are: The Connecticut Water Company (“Connecticut Water”), The Maine Water Company (“Maine Water”) and the Biddeford & Saco Water Company ("BSWC").  Certain information and footnote disclosures have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.  The Condensed Consolidated Balance Sheet at December 31, 2012 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and the notes thereto included in the Company’s latest Annual Report on Form 10-K for the year ended December 31, 2012 and as updated in the Company's Quarterly Report on Forms 10-Q for the periods ended March 31, 2013 and June 30, 2013.

Effective January 1, 2013, the Company began recording an accrual for future patronage refunds from a banking partner based on past history, where in prior years the refund was recorded when received. The Company received $588,000 in patronage distribution during the first quarter of 2013 which related to the year ended December 31, 2012. The Company has determined that changing the accounting to an accrual basis in 2013 is appropriate. The Company believes that the amounts received and recorded in prior periods were not material to the Company's consolidated results of operations or consolidated financial position.

During the second quarter of 2013, the Company recognized that it was not properly amortizing the fair value of debt that was recorded as part of the Company's acquisitions of Maine Water and BSWC. As a result, in the second quarter of 2013, the Company recorded $169,000 and $85,000 of amortization into income relating to year ended December 31, 2012 and the first quarter of 2013, respectively. The Company believes that the amounts recorded were not material to the Company's consolidated results of operations or consolidated financial position.

Certain reclassifications have been made to the 2012 Condensed Consolidated Balance Sheet and the 2012 Condensed Consolidated Statement of Cash Flows to conform previously reported data to the current presentation.

The results for interim periods are not necessarily indicative of results to be expected for the year since the consolidated earnings are subject to seasonal factors.

Regulatory Matters

The rates we charge our Connecticut water customers are established under the jurisdiction of and are approved by the Connecticut Public Utilities Regulatory Authority ("PURA"), formerly the Connecticut Department of Public Utility Control.  It is our policy to seek rate relief as necessary to enable us to achieve an adequate rate of return.  Connecticut Water’s allowed return on equity and return on rate base, effective as of July 14, 2010 are 9.75% and 7.32%, respectively.

On January 25, 2013, Connecticut Water filed a Water Infrastructure Conservation Act ("WICA") application with the PURA requesting an additional 1.08% surcharge to customer bills related to approximately $6.5 million spending on WICA projects. This application also reduced the surcharge by 0.09% for the prior year reconciliation adjustment which expired April 1, 2013.  On January 30, 2013, Connecticut Water filed for a 0.10% reconciliation adjustment for the 2012 shortfall in WICA, to become effective April 1, 2013.  On March 25, 2013, the PURA approved an additional 1.06% surcharge, effective April 1, 2013. Additionally, on March 27, 2013, the PURA approved a 0.10% reconciliation adjustment, effective April 1, 2013. As of April 1, 2013, Connecticut Water's cumulative WICA surcharge was 6.80%.

On July 25, 2013, Connecticut Water filed a WICA application with the PURA requesting an additional 1.09% surcharge to customers' bills, representing approximately $5.6 million in WICA related projects. On September 18, 2013 the PURA approved the 1.09% surcharge with the new rates becoming effective on October 1, 2013. As of October 1, 2013, the cumulative WICA surcharge was 7.89%.

On June 28, 2013, Connecticut Water entered into a settlement agreement with the Office of the Consumer Counsel of the State of Connecticut and the Office of the Attorney General for the State of Connecticut (the "Settlement Agreement"), whereby Connecticut Water would adjust the water rates charged to its customers effective April 1, 2014 in accordance with the elements of the Settlement Agreement (the "Connecticut Water Rate Reduction Plan"). On July 1, 2013, Connecticut Water submitted an application to the PURA seeking formal approval of the Settlement Agreement.

The Settlement Agreement contemplates that Connecticut Water will adopt temporary and proposed regulations issued by the Internal Revenue Service ("IRS") that allows the Company to adopt an alternative method for determining how expenditures related to tangible property can be treated for federal tax purposes for tax years beginning on or after January 1, 2012.  This tax accounting method change treats certain expenditures that the Company historically capitalized for tax purposes, as a deductible repair expense on its tax return.  The adoption of the tax accounting method change allowed Connecticut Water to record a favorable “catch up adjustment” on the Company's consolidated 2012 federal tax return which was filed in September 2013. The Company filed for a tax refund of approximately $13.6 million by carrying back the net operating loss generated from this adjustment.

The Settlement Agreement includes, as a result of negotiated compromise of the parties' respective positions, the following key elements related to the Connecticut Water Rate Reduction Plan:

1)    Connecticut Water crediting its water customers with the amount of the catch up adjustment plus the amount by which 2012 federal income taxes are reduced by the repair deduction (the deduction amount filed on the Company's 2012 federal tax return was approximately $45 million) in order to offset an anticipated rate increase arising from the revenue adjustment mechanism authorized by the State of Connecticut in Public Act No. 13-78 with any associated change in rates to also be reflected on Connecticut Water customers' bills as of April 1, 2014;

2)    Resetting Connecticut Water's adjustment under Connecticut's WICA mechanism to zero by integrating the present WICA surcharge of 7.89% into Connecticut Water's base rates; and

3)    Connecticut Water agreeing not to file for a general rate increase (except under extraordinary circumstances outside Connecticut Water's control) for new rates to be effective any sooner than October 1, 2015.

In the Settlement Agreement, the parties also requested that PURA approve an accounting treatment for Connecticut Water to: 1) allow for the deferral of the tax refund described above and a credit of the tax benefit to customers over a proposed two-year period through a credit on water bills issued starting April 1, 2014 and 2) defer on the balance sheet as a regulatory asset or liability, for later crediting to or collection from customers of the amount by which actual revenues deviate from the revenues allowed in Connecticut Water's in most recent general rate proceedings, including WICA proceedings (the "Revenue Adjustment Mechanism" or "RAM"). The RAM removes the financial disincentive for water utilities to develop and implement effective water conservation programs.

On August 30, 2013, the PURA issued a final decision approving the Settlement Agreement. The Company will begin to issue a credit on customers' bills of approximately 8% beginning April 1, 2014.

Connecticut Water's allowed revenues for the nine months endedSeptember 30, 2013, as approved by PURA during our 2010 general rate case and including subsequently approved WICA surcharges, are approximately $58.3 million. Through normal billing and accrual of unbilled water usage for the nine months endedSeptember 30, 2013 revenue for Connecticut Water would have been approximately $55.5 million had the RAM not been implemented effective January 1, 2013. As a result of the implementation of the RAM, Connecticut Water recorded $2.8 million in additional revenue for the nine months endedSeptember 30, 2013.

The rates we charge our Maine water customers are established under the jurisdiction of and are approved by the MPUC.  It is our policy to seek rate relief as necessary to enable us to achieve an adequate rate of return.  Maine Water’s average allowed return on equity and return on rate base, as of September 30, 2013 were 10.00% and 8.31%, respectively.  BSWC’s allowed return on equity, as of September 30, 2013, was 10.00%.

In April 2013, Maine Water filed for rate increases in three of its divisions, totaling approximately $94,000 in additional revenue, driven primarily by dropping consumption and small expense increases. On July 9, 2013, the MPUC approved rate increases totaling $88,000 for these divisions, to be effective July 1, 2013. In June 2013, Maine Water filed for rate increases in three additional divisions, totaling approximately $554,000 in additional revenue, driven primarily by capital expenditures, declining consumption and small expense increases. These applications are currently under review at the MPUC, and a final decision is expected within nine months of the initial filing.

Effective June 2013, a Water Infrastructure Surcharge (“WISC”) is available in Maine that allows for expedited recovery of investment in water system infrastructure replacement, both treatment and distribution. The Company expects that Maine Water and BSWC will begin to use this in late 2013 or early 2014.

On September 3, 2013, an application was filed with the MPUC to merge Maine Water and BSWC, with Maine Water as the surviving entity. This application is currently under review by the MPUC, and a decision is expected before the end of 2013.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Operating Activities:
Net Income	$ 16,365	$ 12,047
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Deferred Revenues	(2,583)	179
Provision for Deferred Income Taxes and Investment Tax Credits, Net	(5,063)	(1,756)
Allowance for Funds Used During Construction	(209)	(194)
Depreciation (including $533 and $330 in 2013 and 2012 charged to other accounts)	8,521	7,496
Gain (Loss) on Sale of Properties	7	(951)
Change in Assets and Liabilities:
Decrease in Accounts Receivable and Accrued Unbilled Revenues	(4,255)	(4,745)
Increase in Prepayments and Other Current Assets	(18,170)	(2,173)
Decrease in Other Non-Current Items	11,429	4,137
Decrease in Accounts Payable, Accrued Expenses and Other Current Liabilities	1,876	930
Total Adjustments	1,679	6,435
Net Cash and Cash Equivalents Provided by Operating Activities	18,044	18,482
Investing Activities:
Company Financed Additions to Utility Plant	(22,703)	(17,779)
Advances from Others for Construction	(179)	(53)
Net Additions to Utility Plant Used in Continuing Operations	(22,882)	(17,832)
Purchase of water systems, net of cash acquired	0	(36,340)
Proceeds from Sale of Land Held-for-investment	95	1,450
Release of restricted cash	1,295	6,117
Net Cash and Cash Equivalents Used in Investing Activities	(21,492)	(46,605)
Financing Activities:
Proceeds from Interim Bank Loans	1,324	22,617
Repayment of Interim Bank Loans	(1,660)	(21,372)
Proceeds from Issuance of Common Stock	1,209	735
Proceeds from Issuance of Long-term Debt	14,550	36,088
Proceeds from the Exercise of Stock Options	0	631
Costs to Issue Long-Term Debt and Common Stock	(42)	(254)
Repayment of Long-Term Debt Including Current Portion	(15,613)	(871)
Advances from Others for Construction	179	53
Cash Dividends Paid	(8,061)	(6,350)
Net Cash and Cash Equivalents (Used in) Provided by Financing Activities	(8,114)	31,277
Net (Decrease) Increase in Cash and Cash Equivalents	(11,562)	3,154
Cash and Cash Equivalents at Beginning of Period	13,150	1,012
Cash and Cash Equivalents at End of Year	1,588	4,166
Non-Cash Investing and Financing Activities:
Non-Cash Contributed Utility Plant	438	718
Short-term Investment of Bond Proceeds Held in Restricted Cash	9,938	9,819
Cash Paid for:
Interest	4,126	5,123
State and Federal Income Taxes	$ 2,550	$ 4,337

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Segment Reporting Segment Reporting Textual Information (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Segment Reporting Information [Line Items]
Operating Revenues	$ 27,632,000	$ 24,461,000	$ 69,906,000	$ 64,349,000
Regulated Operating Revenue, Other	$ 350,000	$ 458,000	$ 1,058,000	$ 1,131,000

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Aquisitions Acquisitions (Tables)

9 Months Ended

Sep. 30, 2013

Acquisitions [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

The following table summarizes the estimated fair value of the BSWC assets acquired on December 10, 2012, the date of the acquisition (in thousands):

Net Utility Plant	$	19,411
Cash and Cash Equivalents	14
Accounts Receivable, net	628
Prepayments and Other Current Assets	545
Goodwill	7,708
Deferred Charges and Other Costs	554
Total Assets Acquired	$	28,860
Long-Term Debt, including current portion	$	9,263
Accounts Payable and Accrued Expenses	254
Other Current Liabilities	1,076
Advances for Construction	714
Contributions in Aid of Construction	2,568
Deferred Federal and State Income Taxes	1,668
Other Long-Term Liabilities	1,305
Total Liabilities Assumed	$	16,848
Net Assets Acquired	$	12,012

Business Acquisition, Pro Forma Information [Table Text Block]

The following unaudited pro forma summary for the three and nine months endedSeptember 30, 2012 presents information as if BSWC had been acquired on January 1, 2012 and assumes that there were no other changes in our operations.  The following pro forma information does not necessarily reflect the actual results that would have occurred had the Company operated the business since January 1, 2012, nor is it necessarily indicative of the future results of operations of the combined companies (in thousands):

	Three Months Ended		Nine Months Ended
Operating Revenues	$	25,703	$	67,658
Other Water Activities Revenues	458		1,131
Real Estate Revenues	—		1,450
Service and Rentals Revenues	1,608		4,375
Total Revenues	$	27,769	$	74,614
Net Income	$	6,035	$	12,170
Basic Earnings per Average Share Outstanding	$	0.69	$	1.40
Diluted Earnings per Average Share Outstanding	$	0.68	$	1.38

The following table summarizes the results of BSWC for the three and nine months endedSeptember 30, 2013, and is included in the Condensed Consolidated Statement of Income for the period (in thousands):

	Three Months Ended		Nine Months Ended
Operating Revenues	$	1,134	$	3,173
Other Water Activities Revenues	—		—
Real Estate Revenues	—		—
Service and Rentals Revenues	22		85
Total Revenues	$	1,156	$	3,258
Net Income (Loss)	$	24	$	(75	)
Basic Income (Loss) per Average Share Outstanding	$	—	$	(0.01	)

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Earnings per Share Earnings per Share (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Common Stock, Shares, Outstanding	11,016,494	8,848,848	11,016,494	8,848,848	10,939,486
Weighted Average Number of Shares Outstanding, Basic	10,835,000	8,689,000	10,819,000	8,669,000
Diluted (in shares)	11,006,000	8,829,000	10,987,000	8,805,000
Basic (in dollars per share)	$ 0.87	$ 0.69	$ 1.51	$ 1.39
Incremental Common Shares Attributal To Share Based Payements Arrangements	$ (0.01)	$ (0.02)	$ (0.02)	$ (0.03)
Earnings Per Share, Diluted	$ 0.86	$ 0.67	$ 1.49	$ 1.36

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Long-Term Debt Long-Term Debt in Text (Details) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Oct. 29, 2012
Debt Instrument [Line Items]
Long-term Debt, Current Maturities	$ (4,103,000)		$ (1,304,000)
Proceeds from Issuance of Long-term Debt	14,550,000	36,088,000
Monetary Limit of Deceased Bond Holders Redemption per Year	25,000
Percent Limit of Deceased Bond Holders Redemption per Year	3.00%
Total Amount Borrowed Under Two Term Loan Notes	36,100,000
Total Amount Originally Available Under Two Term Loan Notes	40,000,000
Number of Quarterly Principal and Interest Payments	60
Life of Term Loan Supplement A	15 years
Total Available Loans for Refinancing				54,645,000
Unsecured Water Facilities Revenue Refinancing Bonds Series A Issued 2011 Due 2021 [Member]
Debt Instrument [Line Items]
Long-term Debt, Description	22.05
Proceeds from Issuance of Long-term Debt	24,000,000
Debt Instrument, Interest Rate Terms	.05
Debt Instrument, Face Amount	22,050,000
Debt Instrument, Maturity Date	Dec. 20, 2021
Connecticut Water Service Term Loan Note and Supplement A [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	18,000,000
Debt Instrument, Date of First Required Payment	Apr. 20, 2012
Debt Instrument, Maturity Date	Jan. 20, 2027
Connecticut Water Service Term Loan Note and Supplement B [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	18,100,000
Debt Instrument, Maturity Date	Jan. 02, 2014
Subsidiaries [Member]
Debt Instrument [Line Items]
Long-term Debt, Current Maturities	$ 134,811,000		$ 134,957,000

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Aquisitions Fair Value of Assets Acquired (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011	Dec. 10, 2012 Biddeford and Saco Water Company Acquisition [Member]
Business Acquisition [Line Items]
Public Utilities, Property, Plant and Equipment, Net	$ 461,810	$ 447,911			$ 19,411
Cash and Cash Equivalents	1,588	13,150	4,166	1,012	14
Accounts Receivable, Net, Current	14,306	11,526			628
Prepayments and Other Current Assets	6,785	2,477			545
Goodwill	31,685	31,685			7,708
Deferred Charges and Other Costs	9,114	8,180			554
Total Assets	635,602	578,975			28,860
Long-term Debt	175,533	178,475			9,263
Accounts Payable and Accrued Expenses	7,432	10,016			254
Other Current Liabilities	1,849	2,008			1,076
Advances for Construction	31,566	31,030			714
Contributions in Aid of Construction	77,346	77,372			2,568
Deferred Federal and State Income Taxes	45,537	40,869			1,668
Other Long-Term Liabilities	1,033	2,319			1,305
Liabilities					16,848
Assets, Net					$ 12,012

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Issued	11,016,494	10,939,486
Outstanding	11,016,494	10,939,486
ASSETS
Allowance	$ 1,036	$ 1,058
Capitalization, Long-term Debt and Equity [Abstract]
Common Stock, No Par Value	$ 0	$ 0
Common Stock, Shares Authorized	25,000,000	25,000,000

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New Accounting Pronouncements

9 Months Ended

Sep. 30, 2013

Notes To Financial Statements [Abstract]

New Accounting Pronouncements

4. New Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board ("FASB") issued updated accounting guidance to improve the reporting of reclassifications out of accumulated other comprehensive income (“AOCI”). The update requires an entity to present information about the amounts reclassified from AOCI in their financial statements in either a single note or parenthetically on the face of the financial statements. The updated guidance is effective prospectively for reporting periods beginning after December 15, 2012. The Company adopted the provisions of the updated guidance for its quarterly reporting period beginning January 1, 2013. The adoption of the revised guidance had no impact on the Company's consolidated results of operations or consolidated financial position, but the Company did add additional disclosures, see Note 5.

In July 2013, the FASB issued Accounting Standards Update ("ASU") No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This ASU requires an entity to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss carryforward, or similar tax loss or tax credit carryforward, rather than as a liability when (1) the uncertain tax position would reduce the Net Operating Loss or other carryforward under the tax law of the applicable jurisdiction and (2) the entity intends to use the deferred tax asset for that purpose. This ASU is effective prospectively for fiscal years beginning after December 15, 2013. The Company does not expect that the adoption of this guidance will materially impact our consolidated financial position.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Statement of Other Comprehensive Income [Abstract]
Net Income	$ 9,442	$ 5,974	$ 16,365	$ 12,047
Other Comprehensive Income, net of tax
Qualified Cash Flow Hedging Instrument Expense, net of tax benift of $12 and $1 for three months ended September 30, 2013 and 2012, respectively, and $12 and $1 for nine months ended September 30, 2013 and 2012, respectively	40	1	41	2
Reclassification to Pension and Post-Retirement Benefits Other Than Pension, net of tax (expense) benefit of $(34) and $15 for the three months ended September 30, 2013 and 2012 and $(80) and $46 for the nine months ended September 30, 2013 and 2012, respectively	22	(18)	89	(53)
Unrealized gain (loss) on investments, net of tax expense of $31 and $20 for the three months ended September 30, 2013 and 2012, repectively, and $66 and $41 for the nine months ended September 30, 2013 and 2012, repectively	54	30	107	61
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	116	13	237	10
Comprehensive Income	$ 9,558	$ 5,987	$ 16,602	$ 12,057

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CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2013	Dec. 31, 2012
ASSETS
Utility Plant	$ 627,503,000	$ 611,787,000
Construction Work in Progress	11,946,000	7,734,000
Gross Utility Plant	639,449,000	619,521,000
Accumulated Provision for Depreciation	(177,639,000)	(171,610,000)
Net Utility Plant	461,810,000	447,911,000
Other Property and Investments	7,135,000	6,394,000
Cash and Cash Equivalents	1,588,000	13,150,000
Accounts Receivable (Less Allowance, 2013 - $1,036; 2012 - $1,058)	14,306,000	11,526,000
Accrued Unbilled Revenues	8,708,000	7,233,000
Materials and Supplies	2,021,000	1,629,000
Prepaid Income Taxes - Refund Receivable	13,813,000	347,000
Prepayments and Other Current Assets	6,785,000	2,477,000
Total Current Assets	47,221,000	36,362,000
Restricted Cash	9,938,000	9,820,000
Unamortized Debt Issuance Expense	6,979,000	7,411,000
Unrecovered Income Taxes - Regulatory Asset	41,870,000	9,871,000
Pension Benefits - Regulatory Asset	16,716,000	18,319,000
Post-Retirement Benefits Other Than Pension - Regulatory Asset	3,134,000	3,022,000
Goodwill	31,685,000	31,685,000
Deferred Charges and Other Costs	9,114,000	8,180,000
Total Regulatory and Other Long-Term Assets	119,436,000	88,308,000
Total Assets	635,602,000	578,975,000
CAPITALIZATION AND LIABILITIES
Common Stock Without Par Value: Authorized - 25,000,000 Shares - Issued and Outstanding: 2013 - 11,016,494; 2012 - 10,939,486	137,085,000	134,873,000
Retained Earnings (Accumulated Deficit)	60,108,000	51,804,000
Accumulated Other Comprehensive Loss	(1,091,000)	(1,328,000)
Common Stockholders' Equity	196,102,000	185,349,000
Preferred Stock	772,000	772,000
Long-Term Debt	175,533,000	178,475,000
Total Capitalization	372,407,000	364,596,000
Debt, Current	4,103,000	1,304,000
Interim Bank Loans Payable	1,324,000	1,660,000
Accounts Payable and Accrued Expenses	7,432,000	10,016,000
Accrued Interest	1,450,000	889,000
Customer Refund Liability, Current	3,100,000	0
Other Current Liabilities	1,849,000	2,008,000
Total Current Liabilities	19,258,000	15,877,000
Advances for Construction	31,566,000	31,030,000
Contributions in Aid of Construction	77,346,000	77,372,000
Deferred Federal and State Income Taxes	45,537,000	40,869,000
Unfunded Future Income Taxes	41,442,000	8,992,000
Long-Term Compensation Arrangements	36,279,000	36,430,000
Unamortized Investment Tax Credits	1,435,000	1,490,000
Refund to Customers - Regulatory Liability	9,299,000	0
Other Long-Term Liabilities	1,033,000	2,319,000
Total Long-Term Liabilities	243,937,000	198,502,000
Commitments and Contingencies	0	0
Total Capitalization and Liabilities	$ 635,602,000	$ 578,975,000

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Basis of Preparation of Financials In text details (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Patronage Received from Banking Partner	$ 588
Amoritzation of Fair Value of Debt Acquired 2012 Portion	169
Amoritzation of Fair Value of Debt Acquired 2013 Portion	$ 85
Maine Water Company [Member]
Allowed Rate of Return on Equity	10.00%
Allowed Return on Rate Base	8.31%
Biddeford & Saco Water Company [Member]
Allowed Rate of Return on Equity	10.00%
The Connecticut Water Company [Member]
Allowed Rate of Return on Equity	9.75%
Allowed Return on Rate Base	7.32%

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Earnings per Share Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

Earnings per weighted average common share are calculated by dividing net income applicable to common stock by the weighted average number of shares of common stock outstanding during the respective periods as detailed below (diluted shares include the effect of unexercised stock options):

Three months ended September 30,	2013			2012
Common Shares Outstanding End of Period:	11,016,494			8,848,848
Weighted Average Shares Outstanding (Days Outstanding Basis):
Basic	10,834,532			8,689,116
Diluted	11,006,240			8,829,025
Basic Earnings per Share	$	0.87		$	0.69
Dilutive Effect of Unexercised Stock Options	(0.01		)	(0.02		)
Diluted Earnings per Share	$	0.86		$	0.67
Nine Months ended September 30,
Weighted Average Shares Outstanding (Days Outstanding Basis):
Basic	10,818,996			8,669,229
Diluted	10,986,731			8,805,061
Basic Earnings per Share	$	1.51		$	1.39
Dilutive Effect of Unexercised Stock Options	(0.02		)	(0.03		)
Diluted Earnings per Share	$	1.49		$	1.36

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Lines of Credit Lines of Credit (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Short-term Debt [Line Items]
Line of Credit Facility, Current Borrowing Capacity	$ 35.00
Line of Credit, Current	1.3	1.7
Line of Credit Facility, Remaining Borrowing Capacity	33.7
CTWS Line of Credit A [Member]
Short-term Debt [Line Items]
Line of Credit Facility, Current Borrowing Capacity	15.00
CTWS Line of Credit B [Member]
Short-term Debt [Line Items]
Line of Credit Facility, Current Borrowing Capacity	20.00
BSWC Line of Credit [Member]
Short-term Debt [Line Items]
Line of Credit Facility, Current Borrowing Capacity	$ 2.25

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Fair Value Disclosures In Text Tagging (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term Debt, Fair Value	$ 181,160	$ 194,900
Long-term Debt	$ 175,533	$ 178,475

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Long-Term Debt Long-Term Debt (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	$ 175,533	$ 178,475
Long-term Debt, Current Maturities	(4,103)	(1,304)
Long-term Debt	175,533	178,475
Connecticut Water Service Term Loan Note and Supplement A [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	16,653	17,337
Subsidiaries [Member]
Debt Instrument [Line Items]
Long-term Debt, Current Maturities	134,811	134,957
Subsidiaries [Member] | Unsecured Water Facilities Revenue Refinancing Bonds Series Issued 2004, Due 2029 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	12,500	12,500
Subsidiaries [Member] | Unsecured Water Facilities Revenue Refinancing Bonds Series A Issued 2004 Due 2028 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	5,000	5,000
Subsidiaries [Member] | Unsecured Water Facilities Revenue Refinancing Bonds Series B Issued 2004 Due 2028 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	4,550	4,550
Subsidiaries [Member] | Unsecured Water Facilities Revenue Refinancing Bonds Series A Issued 2007, Due 2037 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	0	14,550
Subsidiaries [Member] | Unsecured Water Facilities Revenue Refinancing Bonds Series A Issued 2009, Due 2039 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	19,950	19,950
Subsidiaries [Member] | CoBank Note Payable, Due 2020 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	8,000	8,000
Subsidiaries [Member] | CoBank Note Payable Due 2022 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	14,795	14,795
Subsidiaries [Member] | Unsecured Water Facilities Revenue Refinancing Bonds Series A Issued 2011 Due 2021 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	23,651	23,797
Subsidiaries [Member] | CoBank Note Payable Due 2028 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	17,020	17,020
Subsidiaries [Member] | CoBank Note Payable Due 2032 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	14,795	14,795
Subsidiaries [Member] | CoBank Note Payable, Due 2033 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	14,550	0
Subsidiaries [Member] | Maine Water Company Series G [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	9,000	9,000
Subsidiaries [Member] | Maine Water Company Series J [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	474	524
Maine Water Company [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	18,263	17,200
Maine Water Company [Member] | Maine Water Company Series K [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	739	780
Maine Water Company [Member] | Maine Water Company Series L [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	90	98
Maine Water Company [Member] | Maine Water Company Series M [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	401	421
Maine Water Company [Member] | Maine Water Company Series N [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	451	471
Maine Water Company [Member] | Maine Water Company Series O [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	140	147
Maine Water Company [Member] | Maine Water Company Series P [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	451	471
Maine Water Company [Member] | Maine Water Company Series R [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	242	247
Maine Water Company [Member] | Maine Water Company Series S [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	717	762
Maine Water Company [Member] | Maine Water Company Series T [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	2,012	2,137
Maine Water Company [Member] | Fair Value Adjustment of Long-Term Debt Assume [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	1,352	1,696
Maine Water Company [Member] | 2012 Series U, Due 2042 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	171	177
Maine Water Company [Member] | 2013 Series V, Due 2033 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	1,410	0
Maine Water Company [Member] | CoBank Note Payable, Due 2017 [Member]
Debt Instrument [Line Items]
Long-term Debt, Current Maturities	1,965	1,965
Biddeford & Saco Water Company [Member] | Series M, Due 2014 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	2,700	2,700
Biddeford & Saco Water Company [Member] | Series L, Due 2018 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	2,250	2,250
Biddeford & Saco Water Company [Member] | Series N, Due 2022 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	1,297	1,297
Biddeford & Saco Water Company [Member] | Series O, Due 2025 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	862	862
Biddeford & Saco Water Company [Member] | Series P, Due 2028 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	1,354	1,354
Biddeford & Saco Water Company [Member] | Long Term Capital Leases [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	94	126
Biddeford and Saco [Member]
Debt Instrument [Line Items]
Long-term Debt, Current Maturities	$ 8,557	$ 8,589

XML

Long-Term Debt Long-Term Debt Parenthetical (Details)	Sep. 30, 2013	Dec. 31, 2012
Connecticut Water Service Term Loan Note and Supplement A [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.09%	4.09%
Subsidiaries [Member] | Unsecured Water Facilities Revenue Refinancing Bonds Series A Issued 2007, Due 2037 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	5.00%	5.00%
Subsidiaries [Member] | Unsecured Water Facilities Revenue Refinancing Bonds Series A Issued 2009, Due 2039 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	5.10%	5.10%
Subsidiaries [Member] | Unsecured Water Facilities Revenue Refinancing Bonds Series A Issued 2011 Due 2021 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	5.00%	5.00%
Subsidiaries [Member] | CoBank Note Payable, Due 2020 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.16%	3.16%
Subsidiaries [Member] | CoBank Note Payable Due 2022 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.51%	3.51%
Subsidiaries [Member] | CoBank Note Payable Due 2028 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.29%	4.29%
Subsidiaries [Member] | CoBank Note Payable Due 2032 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.72%	4.72%
Subsidiaries [Member] | CoBank Note Payable, Due 2033 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.75%
Maine Water Company [Member] | Maine Water Company Series G [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	8.95%	8.95%
Maine Water Company [Member] | Maine Water Company Series J [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	2.68%	2.68%
Maine Water Company [Member] | Maine Water Company Series K [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.00%	0.00%
Maine Water Company [Member] | Maine Water Company Series L [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	2.58%	2.58%
Maine Water Company [Member] | Maine Water Company Series M [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	1.53%	1.53%
Maine Water Company [Member] | Maine Water Company Series N [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	1.73%	1.73%
Maine Water Company [Member] | Maine Water Company Series O [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.00%	0.00%
Maine Water Company [Member] | Maine Water Company Series P [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	1.76%	1.76%
Maine Water Company [Member] | Maine Water Company Series R [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	1.57%	1.57%
Maine Water Company [Member] | Maine Water Company Series S [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.00%	0.00%
Maine Water Company [Member] | Maine Water Company Series T [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.00%	0.00%
Maine Water Company [Member] | 2012 Series U, Due 2042 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.00%	0.00%
Maine Water Company [Member] | 2013 Series V, Due 2033 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	1.00%	1.00%
Biddeford & Saco Water Company [Member] | Series M, Due 2014 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	6.45%	6.45%
Biddeford & Saco Water Company [Member] | Series L, Due 2018 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	7.72%	7.72%
Biddeford & Saco Water Company [Member] | Series N, Due 2022 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	2.40%	2.40%
Biddeford & Saco Water Company [Member] | Series O, Due 2025 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	1.86%	1.86%
Biddeford & Saco Water Company [Member] | Series P, Due 2028 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	2.23%	2.23%

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Earnings per Share

9 Months Ended

Sep. 30, 2013

Notes To Financial Statements [Abstract]

Earnings per Share

3. Earnings per Share

Earnings per weighted average common share are calculated by dividing net income applicable to common stock by the weighted average number of shares of common stock outstanding during the respective periods as detailed below (diluted shares include the effect of unexercised stock options):

Three months ended September 30,	2013			2012
Common Shares Outstanding End of Period:	11,016,494			8,848,848
Weighted Average Shares Outstanding (Days Outstanding Basis):
Basic	10,834,532			8,689,116
Diluted	11,006,240			8,829,025
Basic Earnings per Share	$	0.87		$	0.69
Dilutive Effect of Unexercised Stock Options	(0.01		)	(0.02		)
Diluted Earnings per Share	$	0.86		$	0.67
Nine Months ended September 30,
Weighted Average Shares Outstanding (Days Outstanding Basis):
Basic	10,818,996			8,669,229
Diluted	10,986,731			8,805,061
Basic Earnings per Share	$	1.51		$	1.39
Dilutive Effect of Unexercised Stock Options	(0.02		)	(0.03		)
Diluted Earnings per Share	$	1.49		$	1.36

Total unrecognized compensation expense for all stock awards was approximately $1.0 million as of September 30, 2013 and will be recognized over a weighted average period of 1.1 years.

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Pension and Other Post-Retirement Benefits Pension Benefit Cost (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Pension Plans, Defined Benefit [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Benefit Plan, Service Cost	$ 550	$ 505	$ 1,650	$ 1,515
Defined Benefit Plan, Interest Cost	696	642	2,087	1,927
Defined Benefit Plan, Expected Return on Plan Assets	(799)	(674)	(2,397)	(2,020)
Defined Benefit Plan, Amortization of Prior Service Cost (Credit)	19	19	56	56
Defined Benefit Plan, Amortization of Gains (Losses)	563	438	1,689	1,315
Defined Benefit Plan, Net Periodic Benefit Cost	1,029	930	3,085	2,793
Other Postretirement Benefit Plans, Defined Benefit [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Benefit Plan, Service Cost	169	136	506	411
Defined Benefit Plan, Interest Cost	127	136	381	406
Defined Benefit Plan, Expected Return on Plan Assets	(73)	(67)	(218)	(202)
Defined benefit plan amortization of regulatory assets	57	57	169	169
Defined Benefit Plan, Amortization of Transition Obligations (Assets)	0	1	0	1
Defined Benefit Plan, Amortization of Prior Service Cost (Credit)	(202)	(202)	(605)	(605)
Defined Benefit Plan, Amortization of Gains (Losses)	108	152	323	458
Defined Benefit Plan, Net Periodic Benefit Cost	$ 186	$ 213	$ 556	$ 638

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Segment Reporting Assets by Segment (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Segment Reporting Information [Line Items]
Total Plant and Other Investments	$ 468,945	$ 454,305
Other Assets	166,657	124,670
Assets	635,602	578,975
Water Activities [Member]
Segment Reporting Information [Line Items]
Total Plant and Other Investments	468,240	453,625
Other Assets	155,602	118,020
Services and Rentals and Real Estate Combine [Member]
Segment Reporting Information [Line Items]
Total Plant and Other Investments	705	680
Other Assets	$ 11,055	$ 6,650

XML

Long-Term Debt

9 Months Ended

Sep. 30, 2013

Notes To Financial Statements [Abstract]

Long-Term Debt

Long-Term Debt

Long-Term Debt at September 30, 2013 and December 31, 2012 consisted of the following (in thousands):

		2013			2012
Connecticut Water Service, Inc.:
4.09%	Term Loan Note	$	16,653		$	17,337
The Connecticut Water Company:
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%	2007 A Series, Due 2037	—			14,550
5.10%	2009 A Series, Due 2039	19,950			19,950
5.00%	2011 A Series, Due 2021	23,651			23,797
3.16%	CoBank Note Payable, Due 2020	8,000			8,000
3.51%	CoBank Note Payable, Due 2022	14,795			14,795
4.29%	CoBank Note Payable, Due 2028	17,020			17,020
4.72%	CoBank Note Payable, Due 2032	14,795			14,795
4.75%	CoBank Note Payable, Due 2033	14,550			—
Total The Connecticut Water Company		134,811			134,957
The Maine Water Company:
8.95%	1994 Series G, Due 2024	9,000			9,000
2.68%	1999 Series J, Due 2019	474			524
0.00%	2001 Series K, Due 2031	739			780
2.58%	2002 Series L, Due 2022	90			98
1.53%	2003 Series M, Due 2023	401			421
1.73%	2004 Series N, Due 2024	451			471
0.00%	2004 Series O, Due 2034	140			147
1.76%	2006 Series P, Due 2026	451			471
1.57%	2009 Series R, Due 2029	242			247
0.00%	2009 Series S, Due 2029	717			762
0.00%	2009 Series T, Due 2029	2,012			2,137
0.00%	2012 Series U, Due 2042	171			177
1.00%	2013 Series V, Due 2033	1,410			—
2.52%	CoBank Note Payable, Due 2017	1,965			1,965
Total The Maine Water Company		18,263			17,200
The Biddeford & Saco Water Company
6.45%	Series M, Due 2014	2,700			2,700
7.72%	Series L, Due 2018	2,250			2,250
2.40%	Series N, Due 2022	1,297			1,297
1.86%	Series O, Due 2025	862			862
2.23%	Series P, Due 2028	1,354			1,354
Various	Various Capital Leases	94			126
Total The Biddeford & Saco Water Company		8,557			8,589
Add:  Acquisition Fair Value Adjustment		1,352			1,696
Less:  Current Portion		(4,103		)	(1,304		)
Total Long-Term Debt		$	175,533		$	178,475

As of September 30, 2013, the Company and its subsidiaries will make principal payments of approximately $4,103,000 over the next twelve months.

In December 2011, Connecticut Water borrowed $22.05 million through the issuance of Water Facilities Revenue Bonds by Connecticut Innovations, Inc. (formerly known as the Connecticut Development Authority).  Connecticut Water received approximately $24,000,000 in cash in exchange for the issuance of bonds with an aggregate principal amount of $22,050,000 with a maturity date of December 20, 2021 and a 5% coupon.  Connecticut Water recorded a bond premium in connection with this transaction and is amortizing that premium over the life of the bond.  The proceeds from the sale of the bonds are being used to finance construction and installation of various capital improvements to Connecticut Water’s existing water system.

There are no mandatory sinking fund payments required on Connecticut Water’s outstanding Water Facilities Revenue Bonds.  However, certain fixed rate Unsecured Water Facilities Revenue Refinancing Bonds provide for an estate redemption right whereby the estate of deceased bondholders or surviving joint owners may submit bonds to the Trustee for redemption at par, subject to a $25,000 per individual holder and a 3% annual aggregate limitation.

On January 1, 2012, the Company and CoBank, ACB ("CoBank") entered into an amendment to the CoBank Agreement (the “Amendment”) and two additional Promissory Note and Single Advance Term Loan Supplements providing for two additional Term Loans to the Company (the “2012 Term Loan Notes”).  Under the terms of the Amendment and the 2012 Term Loan Notes, on January 3, 2012 the Company borrowed from CoBank, in the aggregate, an additional $36.1 million of an available $40 million to be applied to the Company’s acquisition of the issued and outstanding capital stock of Aqua Maine, Inc. from Aqua America, Inc.

Under one Term Loan Note and Supplement, CoBank loaned the Company $18.0 million, which shall be repaid by the Company in 60 equal quarterly installments of principal and interest over a 15-year amortizing term, with the first installment paid on April 20, 2012 and the last installment due on January 20, 2027.  Under the other Term Loan Note and Supplement, as amended in September 2012, CoBank loaned the Company $18.1 million, which shall be repaid by the Company in quarterly interest payments and repayment of the principal balance in full on the earlier of January 2, 2014 or upon the Company raising equity capital, in the aggregate, up to the outstanding amount owed under the second Term Note and Supplement. The second Term Note was repaid in December 2012 with a portion of the proceeds from the Company's equity issuance.

On October 29, 2012, Connecticut Water entered into a Master Loan Agreement (the “Agreement”) with CoBank, ACB, (“CoBank”). Connecticut Water also delivered to CoBank four Promissory Note and Single Advance Term Loan Supplements, each dated October 29, 2012 (the “Promissory Notes”). On the terms and subject to the conditions set forth in the Promissory Notes issued pursuant to the Agreement, CoBank agreed to make unsecured loans (each a “Loan,” and collectively the “Loans”) to Connecticut Water from time to time, in an aggregate principal amount of up to $54,645,000. Connecticut Water used substantially all of the proceeds of the Loans to refinance the 1998 Series A, 1998 Series B, 2003A Series, 2003C Series and 2005A Series bonds outstanding.

On December 7, 2012, Maine Water entered into an amended and restated Master Loan Agreement with CoBank, pursuant to which CoBank loaned Maine Water $1,965,000, which proceeds were used by Maine Water to reimburse itself for the repayment in full on November 29, 2012 of all principal, accrued interest, premiums, surcharges and other amounts owed by Maine Water pursuant to its long-term bonds previously issued in 1999.

On March 5, 2013, Connecticut Water and CoBank entered into a Promissory Note and Single Advance Term Loan Supplement to the MLA (the “Note”) in which CoBank agreed to make an additional Loan to Connecticut Water in an aggregate principal amount of up to $14,550,000, with a maturity date of March 4, 2033. Additionally, the Company entered into an Amendment to the Guarantee dated March 5, 2013 (the “Guarantee Amendment”), pursuant to which the Company agreed to guarantee the payment of certain of Connecticut Water's obligations under the Note pursuant to the same terms of the Guarantee. Connecticut Water used substantially all of the proceeds of the Loans to refinance the 2007 A Series bonds outstanding.

On June 3, 2013, Maine Water completed the issuance of $1,409,888 aggregate principal amount of its First Mortgage Bonds, Series V, 1.0% due April 1, 2033 (the “Bonds”). The Bonds were issued by Maine Water to the Maine Municipal Bond Bank (the “Bank”) and the proceeds of the issuance were loaned (the “Loan”) by the Bank to Maine Water pursuant to a Loan Agreement by and between Maine Water and the Bank dated as of June 3, 2013. The proceeds of the Loan will be used by Maine Water to fund various water facilities projects.

Financial Covenants – The Company and its subsidiaries are required to comply with certain covenants in connection with various long term loan agreements.  The most restrictive of these covenants is to maintain a consolidated debt to capitalization ratio of not more than 60%. The Company and its subsidiaries were in compliance with all covenants at September 30, 2013.

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Pension and Other Post-Retirement Benefits

9 Months Ended

Sep. 30, 2013

Notes To Financial Statements [Abstract]

Pension and Other Post-Retirement Benefits

2. Pension and Other Post-Retirement Benefits

The following tables set forth the components of pension and other post-retirement benefit costs for the three and nine months endedSeptember 30, 2013 and 2012.

Pension Benefits

Components of Net Periodic Cost (in thousands):

	Three Months						Nine Months
Period ended September 30,	2013			2012			2013			2012
Service Cost	$	550		$	505		$	1,650		$	1,515
Interest Cost	696			642			2,087			1,927
Expected Return on Plan Assets	(799		)	(674		)	(2,397		)	(2,020		)
Amortization of:
Prior Service Cost	19			19			56			56
Net Loss	563			438			1,689			1,315
Net Periodic Benefit Cost	$	1,029		$	930		$	3,085		$	2,793

The Company made a contribution to its defined benefit pension plan of $2,490,000 in 2013 for the 2012 plan year, as allowed by the current funding status.

Post-Retirement Benefits Other Than Pension (PBOP)

Components of Net Periodic Cost (in thousands):

	Three Months						Nine Months
Period ended September 30,	2013			2012			2013			2012
Service Cost	$	169		$	136		$	506		$	411
Interest Cost	127			136			381			406
Expected Return on Plan Assets	(73		)	(67		)	(218		)	(202		)
Other	57			57			169			169
Amortization of:
Transition Obligation	—			1			—			1
Prior Service Cost	(202		)	(202		)	(605		)	(605		)
Recognized Net Loss	108			152			323			458
Net Periodic Benefit Cost	$	186		$	213		$	556		$	638

XML

CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Balance at Beginning of Period	$ 53,395	$ 48,544	$ 51,804	$ 46,669
Net Income	9,442	5,974	16,365	12,047
Retained Earnings before Dividends	62,837	54,518	68,169	58,716
Dividends Declared:
Cumulative Preferred, Class A, $0.20 per share for the three months ended September 30, 2013 and 2012 and $0.60 for the nine months ended September 30, 2013 and 2012, respectively	10	10	29	29
Common Stock - $0.2475 per share and $0.2425 per share for the three months ended September 30, 2013 and 2012, respectively, and $0.7325 and $0.7175 for the nine months ended September 30, 2013 and 2012, respectively	2,719	2,142	8,032	6,321
Total Dividends Declared	2,729	2,152	8,061	6,350
Balance at End of Period	60,108	52,366	60,108	52,366
Series A Voting
Dividends Declared:
Cumulative Preferred, Class A, $0.20 per share for the three months ended September 30, 2013 and 2012 and $0.60 for the nine months ended September 30, 2013 and 2012, respectively	3	3	9	9
Cumulative Preferred Stock
Dividends Declared:
Cumulative Preferred, Class A, $0.20 per share for the three months ended September 30, 2013 and 2012 and $0.60 for the nine months ended September 30, 2013 and 2012, respectively	$ 7	$ 7	$ 20	$ 20

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Aquisitions Maine Water Summary (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Operating Revenues	$ 27,632,000	$ 24,461,000	$ 69,906,000	$ 64,349,000
Regulated Operating Revenue, Other	350,000	458,000	1,058,000	1,131,000
Revenues	29,568,000	26,505,000	75,416,000	71,217,000
Net Income	9,442,000	5,974,000	16,365,000	12,047,000
Earnings Per Share, Basic	$ 0.87	$ 0.69	$ 1.51	$ 1.39
Earnings Per Share, Diluted	$ 0.86	$ 0.67	$ 1.49	$ 1.36
Biddeford and Saco Water Company Acquisition [Member]
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Operating Revenues	1,134,000	25,703,000	3,173,000	67,658,000
Regulated Operating Revenue, Other	0	458,000	0	1,131,000
Real Estate Revenue, Net	0	0	0	1,450,000
Sales Revenue, Services, Net	22,000	1,608,000	85,000	4,375,000
Revenues	1,156,000	27,769,000	3,258,000	74,614,000
Net Income	$ 24,000	$ 6,035,000	$ (75,000)	$ 12,170,000
Earnings Per Share, Basic	$ 0.00	$ 0.69	$ (0.01)	$ 1.40
Earnings Per Share, Diluted		$ 0.68		$ 1.38

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Earnings per Share EPS in Text Tagging (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition	1 year 1 month 20 days
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized		$ 1.0

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Income Tax Expense

9 Months Ended

Sep. 30, 2013

Notes To Financial Statements [Abstract]

Income Taxes

Income Taxes

FASB ASC 740 Income Taxes (“FASB ASC 740”) addresses the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FASB ASC 740, the Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. On June 11, 2013, the Company was notified by the Connecticut Department of Revenue Services that its state tax filings for the years 2009 through 2011 would be reviewed during the fourth quarter of 2013. The Company is also aware that certain of its peers have been challenged on certain tax credits associated with fixed capital investment credits and believes that this may be a focus of the State's review. While the Company firmly believes that all fixed capital investment credits are appropriate and conservatively measured, the Company believes, based on recent activities by taxing authorities, that it is more likely than not that the Company's fixed capital investment credits claimed in prior years may be challenged and ultimately disallowed. Therefore, as required by FASB ASC 740, during the nine months endedSeptember 30, 2013, the Company recorded a reserve of $2.3 million, or 100% of the credits recorded that would be subject to disallowance, of which approximately $0.9 million was recorded in the three months ended September 30, 2013.

On the 2012 tax return, filed in September 2013, the subsidiary Connecticut Water Company filed a change in accounting method to adopt the Internal Revenue Services' temporary tangible property regulations. This method change allowed the Company to take a current year deduction for expenses that were previously capitalized for tax purposes. Since the filing of the 2012 tax return, the IRS has issued final regulations. While the Company believes that the deduction taken on its tax return is appropriate, the methodology for determining the deduction could be challenged by the taxing authorities. Therefore, as required by FASB ASC 740, during the three and nine months ended September 30, 2013, the Company recorded a reserve of $2.2 million for a portion of the benefit that is not being returned to customers.

From time to time, the Company may be assessed interest and penalties by taxing authorities.  In those cases, the charges would appear on the Other line item within the Other Income (Deductions), Net of Taxes section of the Company's Condensed Consolidated Statements of Income.  There were no such charges for the nine months endedSeptember 30, 2013 and 2012.  Additionally, there were no accruals relating to interest or penalties as of September 30, 2013 and December 31, 2012.  The Company remains subject to examination by federal authorities for the 2010, 2011 and 2012 tax years.

The Company is currently engaged in an analysis to determine the amount of expenditures related to tangible property that will be reflected on its 2013 Federal Tax Return to be filed in September 2014. As a result, through the third quarter of 2013, the Company has estimated the portion of its infrastructure investment that will qualify as a repair deduction for 2013 and has reflected that deduction in its effective tax rate at 50% of the expected $15 million of infrastructure improvement. Consistent with other differences between book and tax expenditures, the Company is required to flow-through any timing differences not required by the Internal Revenue Service to be normalized.

The Company’s effective income tax rate for the three months ended of September 30, 2013 and 2012 was 13.2% and 28.5%, respectively.  The Company's effective tax rate, excluding discrete items booked during the quarter, was 16.1% for the three months endedSeptember 30, 2013. The statutory income tax rates during each period was 41%.  In determining its annual estimated effective tax rate for interim periods, the Company reflects its estimated permanent and flow-through tax differences for the taxable year, including the basis difference for the adoption of the tangible property regulations in the current year.

The Company’s effective income tax rate for the first nine months of 2013 and 2012 was 25.9% and 34.0%, respectively.  The Company's effective tax rate, excluding discrete items such as the tax reserves described above and the 2012 return to accrual true up, was 27.3% for the nine months endedSeptember 30, 2013. The statutory income tax rates during each period was 41%.  In determining its annual estimated effective tax rate for interim periods, the Company reflects its estimated permanent and flow-through tax differences for the taxable year, including the basis difference for the adoption of the tangible property regulations in the current year.

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Accumulated Other Comprehensive Income (Loss) (Notes)

9 Months Ended

Sep. 30, 2013

Accumulated Other Comprehensive Income (Loss) [Abstract]

Comprehensive Income (Loss) Note [Text Block]

5. Accumulated Other Comprehensive Income (Loss)

The changes in Accumulated Other Comprehensive Income/(Loss) ("AOCI") by component, net of tax, for the three and nine months endedSeptember 30, 2013 is as follows (in thousands):

Three Months Ended September 30, 2013	Interest Rate Swap			Unrealized Gains on Investments		Defined Benefit Items			Total
Beginning Balance (a)	$	(40	)	$	122	$	(1,289	)	$	(1,207	)
Other Comprehensive Income Before Reclassification	—			54		—			54
Amounts Reclassified from AOCI	40			—		22			62
Net current-period Other Comprehensive Income	40			54		22			116
Ending Balance	$	—		$	176	$	(1,267	)	$	(1,091	)
Nine Months Ended September 30, 2013	Interest Rate Swap			Unrealized Gains on Investments		Defined Benefit Items			Total
Beginning Balance (a)	$	(41	)	$	69	$	(1,356	)	$	(1,328	)
Other Comprehensive Income Before Reclassification	—			95		—			95
Amounts Reclassified from AOCI	41			12		89			142
Net current-period Other Comprehensive Income	41			107		89			237
Ending Balance	$	—		$	176	$	(1,267	)	$	(1,091	)
(a) All amounts shown are net of tax. Amounts in parentheses indicate loss.

The following table sets forth the amounts reclassified from AOCI by component and the affected line item on the Condensed Consolidated Statement of Income for the three and nine months endedSeptember 30, 2013 (in thousands):

Details about Other AOCI Components	Amounts Reclassified from AOCI Three Months Ended September 30, 2013(a)		Amounts Reclassified from AOCI Nine Months Ended September 30, 2013(a)		Affected Line Items on Income Statement
Amortization of Cash Flow Hedging Instrument	28		29		Other Income
Tax benefit	12		12		Other Income
	40		41
Realized Gains on Investments	—		21		Other Income
Tax expense	—		(9	)	Other Income
	—		12
Amortization of Recognized Net Gain from Defined Benefit Items	56		169		Other Income (b)
Tax expense	(34	)	(80	)	Other Income
	22		89
Total Reclassifications for the period, net of tax	62		142
(a) Amounts in parentheses indicate loss/expense.
(b) Included in computation of net periodic pension cost (see Note 2 for additional details).

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Pension and Other Post-Retirement Benefits Pension and Post-Retirement Benefits (Tables)

9 Months Ended

Sep. 30, 2013

Pension and Other Post-Retirement Benefits [Abstract]

Schedule of Net Benefit Costs [Table Text Block]

Pension Benefits

Components of Net Periodic Cost (in thousands):

	Three Months						Nine Months
Period ended September 30,	2013			2012			2013			2012
Service Cost	$	550		$	505		$	1,650		$	1,515
Interest Cost	696			642			2,087			1,927
Expected Return on Plan Assets	(799		)	(674		)	(2,397		)	(2,020		)
Amortization of:
Prior Service Cost	19			19			56			56
Net Loss	563			438			1,689			1,315
Net Periodic Benefit Cost	$	1,029		$	930		$	3,085		$	2,793

schedule of post retirement benefits other than pension costs [Table Text Block]

Post-Retirement Benefits Other Than Pension (PBOP)

Components of Net Periodic Cost (in thousands):

	Three Months						Nine Months
Period ended September 30,	2013			2012			2013			2012
Service Cost	$	169		$	136		$	506		$	411
Interest Cost	127			136			381			406
Expected Return on Plan Assets	(73		)	(67		)	(218		)	(202		)
Other	57			57			169			169
Amortization of:
Transition Obligation	—			1			—			1
Prior Service Cost	(202		)	(202		)	(605		)	(605		)
Recognized Net Loss	108			152			323			458
Net Periodic Benefit Cost	$	186		$	213		$	556		$	638

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Lines of Credit

9 Months Ended

Sep. 30, 2013

Notes To Financial Statements [Abstract]

Lines of Credit

Lines of Credit

On June 30, 2009, the Company entered into a $15 million line of credit agreement with CoBank, ACB, which was amended in May 2010, July 2011 and September 2012 and is currently scheduled to expire on July 1, 2014.  The Company maintains an additional line of credit of $20 million, with an expiration date of June 30, 2014.  On June 30, 2013, the Company allowed BSWC's $2.25 million line of credit to expire. As of September 30, 2013, the total lines of credit available to the Company was $35.0 million.  Interim Bank Loans Payable at September 30, 2013 and December 31, 2012 was approximately $1.3 million and $1.7 million, respectively, and represents the outstanding aggregate balances on these lines of credit. As discussed in Part I, Item 2 below, the Company used a portion of the $47.5 million of net proceeds of its December 2012 equity issuance to pay down a portion of its outstanding balances on these lines of credit. As of September 30, 2013, the Company had $33.7 million in unused lines of credit.  Interest expense charged on interim bank loans will fluctuate based on market interest rates.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Oct. 31, 2013
Entities [Table]
Entity Registrant Name	CONNECTICUT WATER SERVICE INC / CT
Entity Central Index Key	0000276209
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		11,018,161

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Aquisitions

9 Months Ended

Sep. 30, 2013

Notes To Financial Statements [Abstract]

Business Combination Disclosure [Text Block]

Acquisitions

Effective December 10, 2012, the Company completed the acquisition of the Biddeford & Saco Water Company ("BSWC"). This acquisition further expanded the Company's footprint into another New England state, providing the Company with diversity with respect to weather and regulatory climate and ratemaking. Shareholders of BSWC common stock exchanged all outstanding shares of BSWC for 380,254 shares of Connecticut Water Service, Inc. in a transaction valued at approximately $12.0 million, based on the closing price of the Company's common stock on the acquisition date. BSWC is a public water utility regulated by the Maine Public Utility Commission ("MPUC") that serves approximately 15,000 customers in 4 communities in the State of Maine. The Company is accounting for the acquisition in accordance with FASB ASC 805 Business Combinations ("FASB ASC 805").

The estimated fair values of assets acquired and liabilities assumed, including BSWC's outstanding long-term debt, are based upon the information that was available as of the acquisition dates, which management believes provides a reasonable basis for the estimated values. The fair values of long term-debt were based on similar marketable instruments. Management is analyzing additional data necessary to finalize these fair values, which are subject to change. While such changes could be significant, management does not expect them to be, based upon the information provided to date. The valuation, and thus the purchase price allocation, is expected to be completed as soon as practicable but no later than one year from the acquisition date.

The Company incurred pre-tax acquisition and closing related expenses of approximately $544,000 during the year ended December 31, 2012 to acquire BSWC which is recorded on the "Other" line item of the "Other Income (Deductions), Net of Taxes" section of the Consolidated Statements of Income.

The following table summarizes the estimated fair value of the BSWC assets acquired on December 10, 2012, the date of the acquisition (in thousands):

Net Utility Plant	$	19,411
Cash and Cash Equivalents	14
Accounts Receivable, net	628
Prepayments and Other Current Assets	545
Goodwill	7,708
Deferred Charges and Other Costs	554
Total Assets Acquired	$	28,860
Long-Term Debt, including current portion	$	9,263
Accounts Payable and Accrued Expenses	254
Other Current Liabilities	1,076
Advances for Construction	714
Contributions in Aid of Construction	2,568
Deferred Federal and State Income Taxes	1,668
Other Long-Term Liabilities	1,305
Total Liabilities Assumed	$	16,848
Net Assets Acquired	$	12,012

The estimated fair values of the assets acquired and the liabilities assumed were determined based on the accounting guidance for fair value measurement under GAAP, which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value analysis assumes the highest and best use of the assets by market participants. For BSWC, the allocation of the purchase price includes an adjustment to fair value related to BSWC's long-term debt and any associated deferred taxes. The excess of the purchase price paid over the estimated fair value of the assets acquired and the liabilities assumed was recognized as goodwill in the Water Activities Segment, none of which is deductible for tax purposes.

Goodwill is calculated as the excess of the purchase price over the net assets acquired and the contributing factors to the amount recorded include expected future cash flows, potential operational synergies, the utilization of technology and cost savings opportunities in the delivery of certain shared administrative and other services.

The following unaudited pro forma summary for the three and nine months endedSeptember 30, 2012 presents information as if BSWC had been acquired on January 1, 2012 and assumes that there were no other changes in our operations.  The following pro forma information does not necessarily reflect the actual results that would have occurred had the Company operated the business since January 1, 2012, nor is it necessarily indicative of the future results of operations of the combined companies (in thousands):

	Three Months Ended		Nine Months Ended
Operating Revenues	$	25,703	$	67,658
Other Water Activities Revenues	458		1,131
Real Estate Revenues	—		1,450
Service and Rentals Revenues	1,608		4,375
Total Revenues	$	27,769	$	74,614
Net Income	$	6,035	$	12,170
Basic Earnings per Average Share Outstanding	$	0.69	$	1.40
Diluted Earnings per Average Share Outstanding	$	0.68	$	1.38

The following table summarizes the results of BSWC for the three and nine months endedSeptember 30, 2013, and is included in the Condensed Consolidated Statement of Income for the period (in thousands):

	Three Months Ended		Nine Months Ended
Operating Revenues	$	1,134	$	3,173
Other Water Activities Revenues	—		—
Real Estate Revenues	—		—
Service and Rentals Revenues	22		85
Total Revenues	$	1,156	$	3,258
Net Income (Loss)	$	24	$	(75	)
Basic Income (Loss) per Average Share Outstanding	$	—	$	(0.01	)