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 MARCH 31, 2015 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 a 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

11,152,145

Number of shares of common stock outstanding, May 1, 2015

(Includes 198,969 common stock equivalent shares awarded under the Performance Stock Programs)

CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES

Financial Report

March 31, 2015

TABLE OF CONTENTS

Part I, Item 1:  Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014	3
Condensed Consolidated Statements of Income for the three months ended March 31, 2015 and 2014	4
Condensed Consolidated Statements of Comprehensive Income for the three ended March 31, 2015 and 2014	5
Condensed Consolidated Statements of Retained Earnings for the three months ended March 31, 2015 and 2014	6
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014	7
Notes to Condensed Consolidated Financial Statements	8
Part I, Item 2:  Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Part I, Item 3:  Quantitative and Qualitative Disclosures About Market Risk	25
Part I, Item 4:  Controls and Procedures	25
Part II, Item 1:  Legal Proceedings	25
Part II, Item 1A:  Risk Factors	25
Part II, Item 2:  Unregistered Sales of Equity Securities and Use of Proceeds	25
Part II, Item 6:  Exhibits	26
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	27

CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share data)

ASSETS	March 31, 2015			December 31, 2014
Utility Plant	$	688,444		$	685,654
Construction Work in Progress	10,740			9,304
	699,184			694,958
Accumulated Provision for Depreciation	(191,282		)	(188,019		)
Net Utility Plant	507,902			506,939
Other Property and Investments	8,639			8,271
Cash and Cash Equivalents	2,344			2,475
Accounts Receivable (Less Allowance, 2015 - $1,172; 2014 - $1,202)	11,424			11,971
Accrued Unbilled Revenues	7,362			8,283
Materials and Supplies, at Average Cost	1,496			1,486
Prepayments and Other Current Assets	13,526			11,953
Total Current Assets	36,152			36,168
Restricted Cash	1,864			—
Unamortized Debt Issuance Expense	6,162			6,292
Unrecovered Income Taxes - Regulatory Asset	58,863			57,331
Pension Benefits - Regulatory Asset	13,061			13,713
Post-Retirement Benefits Other Than Pension - Regulatory Asset	2,598			2,626
Goodwill	31,685			31,685
Deferred Charges and Other Costs	6,956			8,164
Total Regulatory and Other Long-Term Assets	121,189			119,811
Total Assets	$	673,882		$	671,189
CAPITALIZATION AND LIABILITIES
Common Stockholders’ Equity:
Common Stock Without Par Value: Authorized - 25,000,000 Shares
Issued and Outstanding: 2015 - 11,151,193; 2014 - 11,124,630	$	142,163		$	141,684
Retained Earnings	69,595			69,370
Accumulated Other Comprehensive (Loss)	(1,492		)	(1,603		)
Common Stockholders’ Equity	210,266			209,451
Preferred Stock	772			772
Long-Term Debt	177,689			176,601
Total Capitalization	388,727			386,824
Current Portion of Long-Term Debt	2,464			2,457
Interim Bank Loans Payable	5,422			1,991
Accounts Payable and Accrued Expenses	7,222			10,019
Accrued Interest	1,474			693
Current Portion of Refund to Customers - Regulatory Liability	6,179			6,079
Other Current Liabilities	2,321			2,383
Total Current Liabilities	25,082			23,622
Advances for Construction	25,854			26,718
Deferred Federal and State Income Taxes	52,003			53,322
Unfunded Future Income Taxes	58,451			56,919
Long-Term Compensation Arrangements	36,451			35,748
Unamortized Investment Tax Credits	1,320			1,339
Refund to Customers - Regulatory Liability	—			1,550
Other Long-Term Liabilities	769			776
Total Long-Term Liabilities	174,848			176,372
Contributions in Aid of Construction	85,225			84,371
Commitments and Contingencies	—			—
Total Capitalization and Liabilities	$	673,882		$	671,189

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 EndedMarch 31, 2015 and 2014

(Unaudited)

(In thousands, except per share amounts)

	2015			2014
Operating Revenues	$	20,030		$	20,260
Operating Expenses
Operation and Maintenance	11,324			10,667
Depreciation	3,136			2,808
Income Tax (Benefit) Expense	(941		)	494
Taxes Other Than Income Taxes	2,346			2,387
Total Operating Expenses	15,865			16,356
Net Operating Revenues	4,165			3,904
Other Utility Income, Net of Taxes	155			185
Total Utility Operating Income	4,320			4,089
Other Income (Deductions), Net of Taxes
Non-Water Sales Earnings	369			433
Allowance for Funds Used During Construction	90			98
Other	(7		)	18
Total Other Income, Net of Taxes	452			549
Interest and Debt Expense
Interest on Long-Term Debt	1,774			1,751
Other Interest (Income) Charges, Net	(132		)	(158		)
Amortization of Debt Expense and Premium, Net	27			59
Total Interest and Debt Expense	1,669			1,652
Net Income	3,103			2,986
Preferred Stock Dividend Requirement	9			9
Net Income Applicable to Common Stock	$	3,094		$	2,977
Weighted Average Common Shares Outstanding:
Basic	10,924			10,869
Diluted	11,144			11,061
Earnings Per Common Share:
Basic	$	0.28		$	0.27
Diluted	$	0.28		$	0.27
Dividends Per Common Share	$	0.2575		$	0.2475

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

4

CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months EndedMarch 31, 2015 and 2014

(Unaudited)

(In thousands)

	2015		2014
Net Income	$	3,103	$	2,986
Other Comprehensive Income/(Loss), net of tax
Reclassification to Pension and Post-Retirement Benefits Other than Pension, net of tax expense of $37 and $13 in 2015 and 2014	97		61
Unrealized gain (loss) on investments, net of tax (expense) benefit of $(9) and $2 in 2015 and 2014	14		(3		)
Other Comprehensive Income, net of tax	111		58
Comprehensive Income	$	3,214	$	3,044

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

5

CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

For the Three Months EndedMarch 31, 2015 and 2014

(Unaudited)

(In thousands, except per share amounts)

	2015		2014
Balance at Beginning of Period	$	69,370	$	59,277
Net Income	3,103		2,986
	72,473		62,263
Dividends Declared:
Cumulative Preferred, Class A, $0.20 per share	3		3
Cumulative Preferred, Series $0.90, $0.225 per share	6		6
Common Stock - 2015 $0.2575 per share; 2014 $0.2475 per share	2,869		2,735
	2,878		2,744
Balance at End of Period	$	69,595	$	59,519

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

6

CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months EndedMarch 31, 2015 and 2014

(Unaudited)

(In thousands)

	2015			2014
Operating Activities:
Net Income	$	3,103		$	2,986
Adjustments to Reconcile Net Income to Net Cash and Cash Equivalents Provided by
Operating Activities:
Deferred Revenues	249			(47		)
Provision for Deferred Income Taxes and Investment Tax Credits, Net	(1,366		)	226
Allowance for Funds Used During Construction	(90		)	(98		)
Depreciation and Amortization (including $220 and $291 in 2015 and 2014, respectively, charged to other accounts)	3,356			3,099
Change in Assets and Liabilities:
Decrease in Accounts Receivable and Accrued Unbilled Revenues	1,468			1,506
Increase in Prepaid Income Taxes and Prepayments and Other Current Assets	(1,557		)	(1,498		)
Decrease in Other Non-Current Items	632			715
Increase (Decrease) in Accounts Payable, Accrued Expenses and Other Current Liabilities	292			(1,933		)
Total Adjustments	2,984			1,970
Net Cash and Cash Equivalents Provided by Operating Activities	6,087			4,956
Investing Activities:
Net Additions to Utility Plant Used in Continuing Operations	(6,523		)	(6,402		)
Release of Restricted Cash	—			1,165
Net Cash and Cash Equivalents Used in Investing Activities	(6,523		)	(5,237		)
Financing Activities:
Proceeds from Interim Bank Loans	5,422			—
Repayment of Interim Bank Loans	(1,991		)	—
Costs to Issue Long-Term Debt and Common Stock	(5		)	—
Proceeds from Issuance of Common Stock	366			419
Repayment of Long-Term Debt Including Current Portion	(661		)	(554		)
Advances from Others for Construction	52			64
Cash Dividends Paid	(2,878		)	(2,744		)
Net Cash and Cash Equivalents Provided by (Used in) Financing Activities	305			(2,815		)
Net Decrease in Cash and Cash Equivalents	(131		)	(3,096		)
Cash and Cash Equivalents at Beginning of Period	2,475			18,371
Cash and Cash Equivalents at End of Period	$	2,344		$	15,275
Non-Cash Investing and Financing Activities:
Non-Cash Contributed Utility Plant	$	8		$	247
Supplemental Disclosures of Cash Flow Information:
Cash Paid for:
Interest	$	931		$	969
State and Federal Income Taxes	$	130		$	75

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

7

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. (the “Company”) and its wholly-owned subsidiaries, 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.  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 Company’s primary operating subsidiaries are: The Connecticut Water Company (“Connecticut Water”) and The Maine Water Company (“Maine Water”). The Biddeford & Saco Water Company (“BSWC”) was merged with and into Maine Water, with Maine Water remaining as the surviving entity, effective January 1, 2014. The Condensed Consolidated Balance Sheet at December 31, 2014 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, 2014 (the “10-K”).

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 water customers in Connecticut and Maine are established under the jurisdiction of and are approved by the Connecticut Public Utilities Regulatory Authority (“PURA”) and the Maine Public Utility Commission (“MPUC”), respectively. 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 March 31, 2015 were 9.75% and 7.32%, respectively. Maine Water’s average allowed return on equity and return on rate base, effective March 31, 2015 were 9.50% and 7.96%, respectively. The PURA establishes rates in Connecticut on a company-wide basis while the MPUC approves rates on a division-by-division basis.

Connecticut Rates

Effective April 1, 2014, in accordance with a settlement agreement with the Office of the Consumer Counsel of the State of Connecticut (the “OCC”) and the Office of the Attorney General for the State of Connecticut, Connecticut Water’s cumulative Water Infrastructure Conservation Adjustment (“WICA”) surcharge of 7.89% was rolled into base rates charged to customers.

On July 29, 2014, Connecticut Water filed a WICA application with the PURA requesting a 1.59% surcharge to customers’ bills, representing approximately $12.7 million in WICA related projects. On September 26, 2014, the PURA approved the 1.59% surcharge with the new rates becoming effective on October 1, 2014.

On January 28, 2015, Connecticut Water filed a WICA application with the PURA requesting a 1.35% surcharge to customers' bills, representing approximately $11.2 million in WICA related projects. On February 23, 2015, Connecticut Water filed for a 0.10% reconciliation adjustment for the 2014 shortfall in WICA. On March 25 and 27, 2015, the PURA approved the reconciliation adjustment and the WICA application, respectively. Effective April 1, 2015, the cumulative WICA surcharge is now 3.04%.

On June 5, 2013, the Connecticut’s General Assembly passed Public Act 13-78, “An Act Concerning Water Infrastructure and Conservation, Municipal Reporting Requirements and Unpaid Utility Accounts at Multi-Family Dwellings” (“PA 13-78”), which authorized a Water Revenue Adjustment (“WRA”) to reconcile actual water demands with the demands projected in the last general rate case and allows companies to adjust rates as necessary to recover the revenues approved by PURA in the last general rate case. The WRA removes the financial disincentive for water utilities to develop and implement effective water conservation programs. The WRA allows water companies to defer on the balance sheet, as a regulatory asset or liability, for later collection from or crediting to customers the amount by which actual revenues deviate from the revenues allowed in the most recent general rate proceedings, including WICA proceedings. Additionally, PA 13-78 raised the cap for WICA charges to 10%, from 7.5%, between general rate cases and expands the eligible projects to include energy conservation projects, improvements required to comply with streamflow regulations, and improvements to acquired systems.

8

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Connecticut Water’s allowed revenues for the three months endedMarch 31, 2015, as approved by PURA during our 2010 general rate case and including subsequently approved WICA surcharges, are approximately $16.9 million. Through normal billing for the three months endedMarch 31, 2015, revenue for Connecticut Water would have been approximately $17.1 million had the WRA not been implemented. As a result of the implementation of the WRA, Connecticut Water recorded $0.2 million in reduction to revenue for the three months endedMarch 31, 2015.

Maine Rates

On March 25, 2014, the MPUC approved a rate increase resulting in an annual increase of $340,000 in revenues for one of Maine Water’s divisions requested in April 2013, which became effective on that date. Additionally, Maine Water filed for a general rate increase for its Biddeford and Saco division, its largest division, on November 5, 2014 requesting $1.7 million in additional revenues, offset by $700,000 in the first year due to the adoption of Internal Revenue Service (“IRS”) Revenue Procedure 2012-19 (“Repair Regulations”). Maine Water entered into a stipulation agreement (“Biddeford Stipulation Agreement”) with Maine’s Office of Public Advocate which allowed for flow-through treatment of the Repair Regulations retroactive to January 1, 2014. As part of the Biddeford Stipulation Agreement, customers in the Biddeford and Saco division would receive the benefit of the Repair Regulations, approximately $880,000, over a three year period. Excluding the impact of the refund to customers, the Biddeford Stipulation Agreement calls for an annual increase in rates of approximately $1.3 million. MPUC issued a final decision related to the Biddeford Stipulation Agreement on March 13, 2015, with the new rates, and the first year of the refund, effective on March 10, 2015.

Effective June 2013, a Water Infrastructure Charge (“WISC”) became available in Maine that allows for expedited recovery of investment in water system infrastructure replacement, both treatment and distribution. Because the MPUC sets rates for Maine Water on a division-by-division basis, the WISC must be implemented in the same manner. To date, Maine Water has implemented a WISC in all of its ten divisions with expected annual revenue totaling $442,000.

On October 30, 2014, Maine Water petitioned the MPUC for approval of an accounting order that would allow it to refund to its customers a federal income tax refund stemming from the adoption of Repair Regulations to eight of its ten divisions, and to allow flow-through treatment of the repair deduction as of January 1, 2014. On February 26, 2015, the MPUC approved a stipulation between Maine Water and the Office of the Public Advocate (“Maine Water Stipulation Agreement”) that refunds $2.9 million to the customers of the eight divisions over a two year period starting no later than July 1, 2015, and allowing the requesting accounting treatment. In addition, Maine Water agreed not to file a general rate case during the two year refund period in any of the eight divisions that were allowed the refund. As part of the Biddeford Stipulation Agreement and the Maine Water Stipulation Agreement, Maine Water is required to determine the remaining deferred tax liabilities associated with the fixed assets which the Company will be deducting as part of the adoption of the Repair Regulations. All parties to the Biddeford Stipulation Agreement, the Maine Water Stipulation Agreement, and the MPUC, agree that any benefit resulting from the elimination of deferred tax liabilities previously recorded on qualifying fixed assets subject to the Repair Regulation deduction, be deferred and considered in a separate docket initiated after the Company has analyzed this additional deferred tax liability in more detail. On April 8, 2015, Maine Water filed a petition with the MPUC that asks for a ten year amortization of the deferred taxes in each of its ten divisions, and this petition is still pending before the MPUC. Maine Water believes that this analysis is an integral component to the overall accounting for the adoption of the Repair Regulations and the adoption of the flow-through method of accounting for regulatory accounting related to the adoption of the Repair Regulations. As such, though Maine Water believes the Biddeford Stipulation Agreement, the Maine Water Stipulation Agreement and MPUC orders are probable of being approved, Maine Water believes it is not possible to estimate the accounting impact of the Biddeford Stipulation Agreement and the Maine Water Stipulation Agreement including the separate analysis of the deferred tax liabilities as of March 31, 2015 and as a result has not recorded the impact of flow through accounting related to these deductions.

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 months endedMarch 31, 2015 and 2014.

9

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Pension Benefits

Components of Net Periodic Cost (in thousands):

	Three Months
Period ended March 31,	2015			2014
Service Cost	$	570		$	488
Interest Cost	771			763
Expected Return on Plan Assets	(966		)	(889		)
Amortization of:
Prior Service Cost	4			18
Net Recognized Loss	691			273
Net Periodic Benefit Cost	$	1,070		$	653

The Company does not plan to make a contribution to its defined benefit pension plan in 2015 for the 2014 plan year, as allowed by the plan’s current funding status.

Post-Retirement Benefits Other Than Pension (PBOP)

Components of Net Periodic Cost (in thousands):

	Three Months
Period ended March 31,	2015			2014
Service Cost	$	152		$	154
Interest Cost	147			160
Expected Return on Plan Assets	(81		)	(77		)
Other	56			56
Amortization of:
Prior Service Credit	(142		)	(201		)
Recognized Net Loss	110			68
Net Periodic Benefit Cost	$	242		$	160

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 stock awards):

Three months ended March 31,	2015		2014
Common Shares Outstanding End of Period:	11,151,193		11,078,336
Weighted Average Shares Outstanding (Days Outstanding Basis):
Basic	10,924,330		10,868,784
Diluted	11,144,297		11,061,324
Basic Earnings per Share	$	0.28	$	0.27
Dilutive Effect of Stock Awards	—		—
Diluted Earnings per Share	$	0.28	$	0.27

Total unrecognized compensation expense for all stock awards was approximately $1.7 million as of March 31, 2015 and will be recognized over a weighted average period of 1.4 years.

10

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Recently Adopted and New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” which amends its guidance related to revenue recognition. ASU 2014-09 requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The following steps are applied in the updated guidance: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. ASU 2014-09 is effective for public companies for fiscal years, and interim periods within those years, beginning after December 15, 2016, and can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption, however early adoption is not permitted. On April 1, 2015, the FASB voted for a one-year deferral of the effective date of ASU 2014-09, making ASU 2014-09 effective for public companies for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company is currently determining its implementation approach and assessing the impact that this guidance may have on our consolidated financial position.

In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The Company is currently assessing the impact of this standard on its consolidated financial statements and footnote disclosures, but does not expect that the adoption of this guidance will materially impact our consolidated financial position.

5. Accumulated Other Comprehensive Income

The changes in Accumulated Other Comprehensive Income (Loss) (“AOCI”) by component, net of tax, for the three months endedMarch 31, 2015 and 2014 is as follows (in thousands):

Three months ended March 31, 2015	Unrealized Gains on Investments			Defined Benefit Items			Total
Beginning Balance (a)	$	298		$	(1,901	)	$	(1,603	)
Other Comprehensive Income (Loss) Before Reclassification	14			—			14
Amounts Reclassified from AOCI	—			97			97
Net current-period Other Comprehensive Income (Loss)	14			97			111
Ending Balance	$	312		$	(1,804	)	$	(1,492	)
Three months ended March 31, 2014	Unrealized Gains on Investments			Defined Benefit Items			Total
Beginning Balance (a)	$	259		$	(374	)	$	(115	)
Other Comprehensive Income (Loss) Before Reclassification	(14		)	—			(14		)
Amounts Reclassified from AOCI	11			61			72
Net current-period Other Comprehensive Income (Loss)	(3		)	61			58
Ending Balance	$	256		$	(313	)	$	(57	)
(a) All amounts shown are net of tax. Amounts in parentheses indicate loss.

11

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table sets forth the amounts reclassified from AOCI by component and the affected line item on the Condensed Consolidated Statements of Income for the three months endedMarch 31, 2015 and 2014 (in thousands):

Details about Other AOCI Components	Amounts Reclassified from AOCI Three Months Ended March31,2015(a)			Amounts Reclassified from AOCI Three Months Ended March31,2014(a)			Affected Line Items on Income Statement
Realized Gains on Investments	$	—		$	18		Other Income
Tax expense	—			(7		)	Other Income
	—			11
Amortization of Recognized Net Gain from Defined Benefit Items	135			74			Other Income (b)
Tax expense	(38		)	(13		)	Other Income
	97			61
Total Reclassifications for the period, net of tax	$	97		$	72
(a) Amounts in parentheses indicate loss/expense.
(b) Included in computation of net periodic pension cost (see Note 2 for additional details).

12

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

6. Long-Term Debt

Long-Term Debt at March 31, 2015 and December 31, 2014 consisted of the following (in thousands):

		2015			2014
Connecticut Water Service, Inc.:
4.09%	Term Loan Note	$	15,221		$	15,466
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
5.10%	2009 A Series, Due 2039	19,950			19,950
5.00%	2011 A Series, Due 2021	23,439			23,483
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			14,550
Total The Connecticut Water Company		134,599			134,643
The Maine Water Company:
8.95%	1994 Series G, Due 2024	9,000			9,000
2.68%	1999 Series J, Due 2019	339			424
0.00%	2001 Series K, Due 2031	656			698
2.58%	2002 Series L, Due 2022	75			83
1.53%	2003 Series M, Due 2023	361			381
1.73%	2004 Series N, Due 2024	431			431
0.00%	2004 Series O, Due 2034	127			133
1.76%	2006 Series P, Due 2026	411			431
1.57%	2009 Series R, Due 2029	227			237
0.00%	2009 Series S, Due 2029	650			672
0.00%	2009 Series T, Due 2029	1,823			1,886
0.00%	2012 Series U, Due 2042	160			165
1.00%	2013 Series V, Due 2033	1,360			1,385
2.52%	CoBank Note Payable, Due 2017	1,965			1,965
4.24%	CoBank Note Payable, Due 2024	4,500			4,500
7.72%	BSWC Series L, Due 2018	2,250			2,250
2.40%	BSWC Series N, Due 2022	1,176			1,251
1.86%	BSWC Series O, Due 2025	846			846
2.23%	BSWC Series P, Due 2028	1,324			1,354
0.01%	BSWC Series Q, Due 2035	1,864			—
Various	Various Capital Leases	32			37
Total The Maine Water Company		29,577			28,129
Add: Acquisition Fair Value Adjustment		756			820
Less: Current Portion		(2,464		)	(2,457		)
Total Long-Term Debt		$	177,689		$	176,601

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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

On December 22, 2014, Maine Water and CoBank, ACB (“CoBank”) entered into an amendment to Amended and Restated Master Loan Agreement by and between Maine Water and CoBank, dated as of December 1, 2012 (the “Agreement”) pursuant to which CoBank loaned Maine Water $4,500,000. Maine Water intends to use the proceeds of the above described loan from CoBank to refinance existing debt and to finance capital expenditures.

On March 17, 2015, Maine Water completed the issuance of $1,864,050 aggregate principal amount of its First Mortgage Bonds, Series Q, 0.01% due March 17, 2035 (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 March 17, 2015 (the “Loan Agreement”). The proceeds of the Loan will be used by Maine Water to fund various water facilities projects, including the replacement of a booster station and to fund modifications to a treatment plant, each located in the Town of Biddeford, Maine.

During the first quarter of 2015, the Company paid approximately $245,000 related to Connecticut Water Service’s Term Note Payable issued as part of the acquisition of Maine Water and approximately $416,000 in sinking funds related to Maine Water’s outstanding bonds.

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%. Additionally, Maine Water has restrictions on cash dividends paid based on restricted net assets. The Company and its subsidiaries were in compliance with all covenants at March 31, 2015.

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 March 31, 2015 (in thousands):

	Level 1		Level 2		Level 3		Total
Asset Type:
Company Owned Life Insurance	$	—	$	3,031	$	—	$	3,031
Money Market Fund	112		—		—		112
Mutual Funds:
Equity Funds (1)	1,820		—		—		1,820
Total	$	1,932	$	3,031	$	—	$	4,963

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes our financial instruments measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2014 (in thousands):

	Level 1		Level 2		Level 3		Total
Asset Type:
Company Owned Life Insurance	$	—	$	2,977	$	—	$	2,977
Money Market Fund	166		—		—		166
Mutual Funds:
Equity Funds (1)	1,790		—		—		1,790
Total	$	1,956	$	2,977	$	—	$	4,933

(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 Maine Water’s March 2015 bond offering, 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 2015, 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 March 31, 2015 and December 31, 2014, the estimated fair value of the Company’s long-term debt was $193,877,000 and $189,942,000, respectively, as compared to the carrying amounts of $177,689,000 and $176,601,000, 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.

Advances for Construction – Customer advances for construction have a carrying amount of $25,854,000 and $26,718,000 at March 31, 2015 and December 31, 2014, respectively. Their relative fair values cannot be accurately estimated since future refund payments depend on several variables, including new customer connections, customer consumption levels and future rate increases.

The fair values shown above have been reported to meet the disclosure requirements of FASB ASC 825, “Financial Instruments” (“FASB ASC 825”) 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. Financial data for the segments is as follows (in thousands):

Three months ended March 31, 2015
Segment	Revenues		Pre-Tax Income		Income Tax Expense			Net Income
Water Activities	$	20,340	$	1,687	$	(1,047	)	$	2,734
Real Estate Transactions	—		—		—			—
Services and Rentals	1,362		629		260			369
Total	$	21,702	$	2,316	$	(787	)	$	3,103

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Three months ended March 31, 2014
Segment	Revenues		Pre-Tax Income		Income Tax Expense		Net Income
Water Activities	$	20,620	$	2,918	$	365	$	2,553
Real Estate Transactions	—		—		—		—
Services and Rentals	1,412		710		277		433
Total	$	22,032	$	3,628	$	642	$	2,986

The revenues shown in Water Activities above consisted of revenues from water customers of $20,030,000 and $20,260,000 for the three months endedMarch 31, 2015 and 2014, respectively. Additionally, there were revenues associated with utility plant leased to others of $310,000 and $360,000 for the three months endedMarch 31, 2015 and 2014, respectively. The revenues from water customers for the three months endedMarch 31, 2015 and 2014 include $189,000 reduction in revenues and $107,000 in additional revenues related to the implementation of the WRA, respectively.

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.

Assets by segment (in thousands):

	March 31, 2015		December 31, 2014
Total Plant and Other Investments:
Water Activities	$	515,897	$	514,606
Non-Water	644		605
	516,541		515,211
Other Assets:
Water Activities	154,510		152,929
Non-Water	2,831		3,049
	157,341		155,978
Total Assets	$	673,882	$	671,189

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 beginning in the fourth quarter of 2013.  On March 24, 2015, the Company was notified by the Connecticut Department of Revenue Services that the audit was expanded to include the 2012 and 2013 tax years. The State focused its review on tax credits associated with fixed capital investment. The Company and the State have come to an agreement regarding investments eligible for the credit. The closing agreement was executed on May 4, 2015. The Company had previously recorded a provision for the possible disallowance of these credits and therefore there was minimal impact in 2015.

On the 2012 Federal tax return, filed in September 2013, Connecticut Water filed a change in accounting method to adopt the IRS’ 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.  On February 11, 2014, the Company was notified by the IRS that its Federal tax filing for 2012 would be reviewed. This review, which began in the first quarter of 2014 and was completed in the first quarter of 2015, resulted in no change to the tax liability. Since the Company had previously recorded a provision for the possible disallowance of the repair deduction in prior periods, the completion of the audit resulted in the reversal of the reserves in the amount of $1,185,000.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

While the Company maintains the belief that the deduction taken on its tax return is appropriate, the methodology for determining the deduction has not been agreed to by the taxing authorities.  On the 2013 Federal tax return, filed in September 2014, Maine Water filed the same change in accounting method. Through March 31, 2015, the Company has recorded, as required by FASB ASC 740, a provision of $4.4 million for a portion of the benefit that is not being returned to customers resulting from any possible future tax authority challenge.

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 three months endedMarch 31, 2015 and 2014.  Additionally, there were no accruals relating to interest or penalties as of March 31, 2015 and December 31, 2014.  The Company remains subject to examination by federal tax authorities for the 2011 and 2013 tax years; and the state tax authorities for the 2009 through 2013 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 2015 Federal Tax Return to be filed in September 2016.  As a result, through the first quarter of 2015, the Company has estimated the portion of its infrastructure investment that will qualify as a repair deduction for 2015 and has reflected that deduction in its effective tax rate at 75% of the expected $17 million of infrastructure improvement.  Consistent with other differences between book and tax expenditures, the Company is required to use the flow-through method to account for any timing differences not required by the IRS to be normalized.

The Company’s effective income tax rate for the three months endedMarch 31, 2015 and 2014 was (34.0)% and 17.7%, respectively.  The Company’s effective tax rate, excluding discrete items booked during the quarter, was 11.8% for the three months endedMarch 31, 2015. These discrete items include adjustments related to the provisions for the repair deduction and the Connecticut credits. The statutory income tax rates during each period were 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

The Company maintains a $15.0 million line of credit agreement with CoBank, that is currently scheduled to expire on July 1, 2016.  The Company maintains an additional line of credit of $20.0 million with RBS Citizens, N.A., with an expiration date of June 30, 2017.  As of March 31, 2015, the total lines of credit available to the Company were $35.0 million.  As of March 31, 2015 and December 31, 2014, the Company had $5.4 million and $2.0 million, respectively, of Interim Bank Loans Payable. As of March 31, 2015, the Company had $29.6 million in unused lines of credit.  Interest expense charged on lines of credit will fluctuate based on market interest rates.

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, 2014.

General Information

Regulatory Matters

The rates we charge our water customers in Connecticut and Maine are established under the jurisdiction of and are approved by the Connecticut Public Utilities Regulatory Authority (“PURA”) and the Maine Public Utility Commission (“MPUC”), respectively. 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 March 31, 2015 were 9.75% and 7.32%, respectively. Maine Water’s average allowed return on equity and return on rate base, effective March 31, 2015 were 9.50% and 7.96%, respectively. The PURA establishes rates in Connecticut on a company-wide basis while the MPUC approves rates on a division-by-division basis.

Connecticut Rates

Effective April 1, 2014, in accordance with a settlement agreement with the Office of the Consumer Counsel of the State of Connecticut (the “OCC”) and the Office of the Attorney General for the State of Connecticut, Connecticut Water’s cumulative Water Infrastructure Conservation Adjustment (“WICA”) surcharge of 7.89% was rolled into base rates charged to customers.

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On July 29, 2014, Connecticut Water filed a WICA application with the PURA requesting a 1.59% surcharge to customers’ bills, representing approximately $12.7 million in WICA related projects. On September 26, 2014, the PURA approved the 1.59% surcharge with the new rates becoming effective on October 1, 2014.

On January 28, 2015, Connecticut Water filed a WICA application with the PURA requesting a 1.35% surcharge to customers' bills, representing approximately $11.2 million in WICA related projects. On February 23, 2015, Connecticut Water filed for a 0.10% reconciliation adjustment for the 2014 shortfall in WICA. On March 25 and 27, 2015, the PURA approved the reconciliation adjustment and the WICA application, respectively. Effective April 1, 2015, the cumulative WICA surcharge is now 3.04%.

On June 5, 2013, the Connecticut’s General Assembly passed Public Act 13-78, “An Act Concerning Water Infrastructure and Conservation, Municipal Reporting Requirements and Unpaid Utility Accounts at Multi-Family Dwellings” (“PA 13-78”), which authorized a Water Revenue Adjustment (“WRA”) to reconcile actual water demands with the demands projected in the last general rate case and allows companies to adjust rates as necessary to recover the revenues approved by PURA in the last general rate case. The WRA removes the financial disincentive for water utilities to develop and implement effective water conservation programs. The WRA allows water companies to defer on the balance sheet, as a regulatory asset or liability, for later collection from or crediting to customers the amount by which actual revenues deviate from the revenues allowed in the most recent general rate proceedings, including WICA proceedings. Additionally, PA 13-78 raised the cap for WICA charges to 10%, from 7.5%, between general rate cases and expands the eligible projects to include energy conservation projects, improvements required to comply with streamflow regulations, and improvements to acquired systems.

Connecticut Water’s allowed revenues for the three months endedMarch 31, 2015, as approved by PURA during our 2010 general rate case and including subsequently approved WICA surcharges, are approximately $16.9 million. Through normal billing for the three months endedMarch 31, 2015, revenue for Connecticut Water would have been approximately $17.1 million had the WRA not been implemented. As a result of the implementation of the WRA, Connecticut Water recorded $0.2 million in reduction to revenue for the three months endedMarch 31, 2015.

Maine Rates

On March 25, 2014, the MPUC approved a rate increase resulting in an annual increase of $340,000 in revenues for one of Maine Water’s divisions requested in April 2013, which became effective on that date. Additionally, Maine Water filed for a general rate increase for its Biddeford and Saco division, its largest division, on November 5, 2014 requesting $1.7 million in additional revenues, offset by $700,000 in the first year due to the adoption of Internal Revenue Service (“IRS”) Revenue Procedure 2012-19 (“Repair Regulations”). Maine Water entered into a stipulation agreement (“Biddeford Stipulation Agreement”) with Maine’s Office of Public Advocate which allowed for flow-through treatment of the Repair Regulations retroactive to January 1, 2014. As part of the Biddeford Stipulation Agreement, customers in the Biddeford and Saco division would receive the benefit of the Repair Regulations, approximately $880,000, over a three year period. Excluding the impact of the refund to customers, the Biddeford Stipulation Agreement calls for an annual increase in rates of approximately $1.3 million. MPUC issued a final decision related to the Biddeford Stipulation Agreement on March 13, 2015, with the new rates, and the first year of the refund, effective on March 10, 2015.

Effective June 2013, a Water Infrastructure Charge (“WISC”) became available in Maine that allows for expedited recovery of investment in water system infrastructure replacement, both treatment and distribution. Because the MPUC sets rates for Maine Water on a division-by-division basis, the WISC must be implemented in the same manner. To date, Maine Water has implemented a WISC in all of its ten divisions with expected annual revenue totaling $442,000.

On October 30, 2014, Maine Water petitioned the MPUC for approval of an accounting order that would allow it to refund to its customers a federal income tax refund stemming from the adoption of Repair Regulations to eight of its ten divisions, and to allow flow-through treatment of the repair deduction as of January 1, 2014. On February 26, 2015, the MPUC approved a stipulation between Maine Water and the Office of the Public Advocate (“Maine Water Stipulation Agreement”) that refunds $2.9 million to the customers of the eight divisions over a two year period starting no later than July 1, 2015, and allowing the requesting accounting treatment. In addition, Maine Water agreed not to file a general rate case during the two year refund period in any of the eight divisions that were allowed the refund. As part of the Biddeford Stipulation Agreement and the Maine Water Stipulation Agreement, Maine Water is required to determine the remaining deferred tax liabilities associated with the fixed assets which Maine Water will be deducting as part of the adoption of the Repair Regulations. All parties to the Biddeford Stipulation Agreement, the Maine Water Stipulation Agreement, and the MPUC, agree that any benefit resulting from the elimination of deferred tax liabilities previously recorded on qualifying fixed assets subject to the Repair Regulation deduction, be deferred and considered in a separate docket initiated after Maine Water has analyzed this additional deferred tax

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liability in more detail. On April 8, 2015, Maine Water filed a petition with the MPUC that asks for a ten year amortization of the deferred taxes in each of its ten divisions, and this petition is still pending before the MPUC. Maine Water believes that this analysis is an integral component to the overall accounting for the adoption of the Repair Regulations and the adoption of the flow-through method of accounting for regulatory accounting related to the adoption of the Repair Regulations. As such, though Maine Water believes the Biddeford Stipulation Agreement, the Maine Water Stipulation Agreement and MPUC orders are probable of being approved, Maine Water believes it is not possible to estimate the accounting impact of the Biddeford Stipulation Agreement and the Maine Water Stipulation Agreement including the separate analysis of the deferred tax liabilities as of March 31, 2015 and as a result has not recorded the impact of flow through accounting related to these deductions.

Recognizing the increasing importance of managing and protecting electronic data, the Company, beginning in 2014, partnered with a consulting firm to evaluate the Company's cyber security strengths and vulnerabilities and to help in creating an evaluation of the Company's current information technology (“IT”) structure within the organization.  In April 2014, a cyber security assessment analysis identified and prioritized steps that the Company should take to enhance its security surrounding cyber security.  The Company is in the process of implementing recommendations contained in the cyber security assessment which it estimates will be completed in full by June 2016 and will require over $1 million in related internal and external labor costs and additional technological investments to complete.

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 and Maine Water, 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, 2014.

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 WRA), goodwill impairment, income taxes 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, 2014.

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 2014 Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

The Company’s earnings and profitability are primarily dependent upon the sale and distribution of water. In Maine, water revenues can be dependent on seasonal weather fluctuations, particularly during the summer months when water demand will vary with rainfall and temperature levels. This risk has been mitigated in Connecticut with the implementation of the WRA. The Company’s earnings and profitability in future years will also depend upon a number of other factors, such as the ability to control our operating costs, 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, and the timing and adequacy of rate relief when requested, from time to time, by our regulated water companies.

The Company expects Net Income from its Water Activities segment to increase in 2015 over 2014 levels, based, in part, to revenue increases due to expected rate increases and the utilization of WISC in Maine and WICA in Connecticut, along with an increase in Net Income from our Real Estate segment as a result of a planned land donation.  The Company expects these increases to be partially offset by increases in pension and post-retirement benefit costs.

The Company believes that the factors described above and those described in detail 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 2015 and beyond.  Please also review carefully the risks and uncertainties described in the sections

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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, 2014 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

The Company maintains a $15.0 million line of credit agreement with CoBank, ACB (“CoBank”), that is currently scheduled to expire on July 1, 2016.  The Company maintains an additional line of credit of $20.0 million with RBS Citizens, N.A., with an expiration date of June 30, 2017.  As of March 31, 2015, the total lines of credit available to the Company were $35.0 million.  As of March 31, 2015 and December 31, 2014, the Company had $5.4 million and $2.0 million, respectively, of Interim Bank Loans Payable. As of March 31, 2015, the Company had $29.6 million in unused lines of credit.  Interest expense charged on lines of credit will fluctuate based on market interest rates.

On December 22, 2014, Maine Water and CoBank entered into an amendment to Amended and Restated Master Loan Agreement by and between Maine Water and CoBank, dated as of December 1, 2012 (the “Agreement”) pursuant to which CoBank loaned Maine Water $4,500,000. Maine Water intends to use the proceeds of the above described loan from CoBank to refinance existing debt and to finance capital expenditures.

On March 17, 2015, Maine Water completed the issuance of $1,864,050 aggregate principal amount of its First Mortgage Bonds, Series Q, 0.01% due March 17, 2035 (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 March 17, 2015 (the “Loan Agreement”). The proceeds of the Loan will be used by Maine Water to fund various water facilities projects, including the replacement of a booster station and to fund modifications to a treatment plant, each located in the Town of Biddeford, Maine.

During the first quarter of 2015, the Company paid approximately $245,000 related to Connecticut Water Service’s Term Note Payable issued as part of the acquisition of Maine Water and approximately $416,000 in sinking funds related to Maine Water’s outstanding bonds.

Credit Rating

On February 19, 2015, Standard & Poor’s Ratings Services (“S&P”) affirmed its ‘A’ corporate credit rating on the Company. Additionally, S&P also affirmed the Company’s ratings outlook as stable.

Stock Plans

The Company offers a dividend reinvestment and stock purchase plan (“DRIP”) for all registered shareholders and for the customers and employees of our regulated water companies, whereby participants can opt to have cash 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 which is intended to encourage greater shareholder, customer and employee participation in the DRIP. In August 2014, the Board of Directors approved further amendments to the DRIP to reflect the Company’s appointment of a new common stock transfer agent. During the three months endedMarch 31, 2015 and 2014, plan participants invested $366,000 and $419,000, respectively, in additional shares as part of the DRIP.

2015 Construction Budget

The Board of Directors approved a $55.1 million construction budget for 2015, net of amounts to be financed by customer advances and contributions in aid of construction.  The Company is using and will continue to use a combination of its internally generated funds, borrowings under its available lines of credit, and Maine Water’s 2014 and 2015 debt issuances to fund the 2015 construction budget.

As the Company looks forward to the remainder of 2015 and 2016, it anticipates continued reinvestment to replace aging infrastructure and to seek recovery through periodic WICA applications in Connecticut and WISC applications in Maine.  The

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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.

Results of Operations

Three months ended March 31

Net Income for the three months ended March 31, 2015 increased from the same period in the prior year by $117,000 to $3,103,000. Earnings per basic average common share increased by $0.01 to $0.28 during the three months ended March 31, 2015.

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

Business Segment	March 31, 2015		March 31, 2014		Increase/(Decrease)
Water Activities	$	2,734	$	2,553	$	181
Real Estate Transactions	—		—		—
Services and Rentals	369		433		(64		)
Total	$	3,103	$	2,986	$	117

The increase in the Water Activity segment’s Net Income was primarily due to the impact of the completed federal income tax audit by the IRS, as well as the net effects of the variances listed below:

Revenue

Revenue from our water customers decreased by $230,000, or 1.1%, to $20,030,000 for the three months ended March 31, 2015 when compared to the same period in 2014.  The primary reason for the decrease in revenues was due to timing and the impact of Connecticut Water’s unbilled revenues. Unbilled revenues are an estimate of the amount that will be billed to customers for water use during the quarter for which a bill has not yet been rendered. In 2014, the unbilled calculation included an average of 44 days based on the timing of meter reading schedules compared with 42 days in 2015. As required by PURA, Connecticut Water does not consider unbilled revenues when calculating the WRA. The Company considers this difference temporary in nature and expects that year-to-date revenues in 2015 will be comparable to revenues in corresponding periods in 2014. Off-setting the decrease in revenues at Connecticut Water was an increase in revenues at Maine Water based primarily on higher rates in effect at several divisions in 2015 when compared to 2014.

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Operation and Maintenance Expense

Operation and Maintenance (“O&M”) expense increased by $657,000, or 6.2%, for the three months ended March 31, 2015 when compared to the same period of 2014. The following table presents the components of O&M expense (in thousands):

Expense Components	March 31, 2015			March 31, 2014			Increase / (Decrease)
Outside services	$	933		$	480		$	453
Pension	1,064			648			416
Mark-to-market	(20		)	(144		)	124
Payroll	3,902			3,780			122
Post-retirement medical	243			160			83
Maintenance	749			704			45
Investor relations	193			151			42
Property and liability insurance	379			340			39
Customer	361			328			33
Regulatory commission expense	104			85			19
Utility costs	1,098			1,113			(15		)
Water treatment (including chemicals)	640			691			(51		)
Other benefits	(44		)	585			(629		)
Other	1,722			1,746			(24		)
Total	$	11,324		$	10,667		$	657

The changes in individual items are described below:

• Outside services increased primarily due to costs associated with the Company’s on-going cyber security and IT structure project discussed above;

• Pension costs and post-retirement medical costs each increased primarily due to updates to the mortality table and a decrease in the discount rates used in determining the 2015 expense;

• Mark-to-market represents the treatment of certain officers' benefits based on fluctuations in the stock market and the effect the fluctuations have on non-vested share based compensation. The Company’s stock price increased between March 31, 2015 and December 31, 2014 compared to a decrease in the Company’s stock price between March 31, 2014 and December 31, 2013, which lowered mark-to-market losses in the three months endedMarch 31, 2015 when compared to the three months endedMarch 31, 2014;

• Payroll costs increased primarily due to normal wage increases; and

• Property and liability insurance increased due to an increase in premiums in 2015 when compared to 2014.

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

• Water treatment costs decreased primarily due to a reduction in laboratory testing costs as a result of the Connecticut Water now performing most tests internally rather than through an outside vendor and a reduction in costs associated with disposal of certain treatment by-products. Maine Water has historically handled most of their testing in house; and

• Other benefits decreased primarily due to a decrease in costs associated with performance stock awards granted to officers of the Company due to the accelerated vesting of certain share awards granted to a former officer in 2014, there was no accelerated vesting in 2015. Additionally, there was a decrease in costs associated with a non-officer incentive program during the three months ended March 31, 2015 when compared to the same period of 2014.

The Company saw an approximate $328,000, or 11.7%, increase in its Depreciation expense from the three months endedMarch 31, 2015 compared to the same period in 2014.  The increase was primarily due to higher Utility Plant in Service as of March 31, 2015 compared to March 31, 2014 driven by WICA and WISC spending in Connecticut and Maine, respectively.

Income Tax expense decreased by $1,435,000 in the first quarter of 2015 when compared to the same period in 2014 due to a lower effective income tax rate. The Company’s effective tax rate decreased from 17.7% to (34.0)% in the three months endedMarch 31, 2015 compared to the same period in 2014. The primary reason for the decrease in the effective tax rate was the reversal of previously established reserves in the amount of $1,185,000 relating to the completion of an IRS review of our 2012 Federal tax return.

22

Other Income (Deductions), Net of Taxes decreased for the three months endedMarch 31, 2015 by $97,000. The primary driver of this decrease was due to a reduction in Services and Rentals income due primarily to recording of higher costs associated with our routine wastewater contracts. Addtionally, there was a decrease in rental income associated with some of our non-water properties.

Total Interest and Debt Expense increased by $17,000 in the three months endedMarch 31, 2015 when compared to the same period in 2014. The primary reason for the increase in Interest and Debt Expense was the higher interest expense incurred because of higher debt balances outstanding at March 31, 2015 when compared to March 31, 2014.

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. On March 24, 2015, the Company was notified by the Connecticut Department of Revenue Services that the audit was expanded to include the 2012 and 2013 tax years. The State focused its review on tax credits associated with fixed capital investment. The Company and the State have come to an agreement regarding investments eligible for the credit. The closing agreement was executed on May 4, 2015. The Company had previously recorded a provision for the possible disallowance of these credits and therefore there was minimal impact in 2015.

On the 2012 Federal tax return, filed in September 2013, Connecticut Water filed a change in accounting method to adopt the IRS’ 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.  On February 11, 2014, the Company was notified by the IRS that its Federal tax filing for 2012 would be reviewed. This review, which began in the first quarter of 2014 and was completed in the first quarter of 2015, resulted in no change to the tax liability. Since the Company had previously recorded a provision for the possible disallowance of the repair deduction in prior periods, the completion of the audit resulted in the reversal of the reserves in the amount of $1,185,000. While the Company maintains the belief that the deduction taken on its tax return is appropriate, the methodology for determining the deduction has not been agreed to by the taxing authorities.  On the 2013 Federal tax return, filed in September 2014, Maine Water filed the same change in accounting method. Through March 31, 2015, the Company has recorded, as required by FASB ASC 740, a provision of $4.4 million for a portion of the benefit that is not being returned to customers resulting from any possible future tax authority challenge.

The Company remains subject to examination by federal tax authorities for the 2011 through 2013 tax years; and the state tax authorities for the 2009 through 2013 tax years.

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 year December 31, 2014.

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;

23

• 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;

• 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;

• 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;

• the amount of repair tax deductions and the Internal Revenue Service’s ultimate acceptance of the deduction methodology; 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;

• the determination of what qualifies for a repair expense tax deduction;

• 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;

• our ability to manage the expansion of our business;

• the continuous reliable operation of our information technology systems, including the impact of cyber security attacks or other cyber-related events;

• 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, 2014 (“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

24

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 Company had $5.4 million of interim bank loans payable at March 31, 2015.

As of March 31, 2015, 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 March 31, 2015, 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 March 31, 2015, 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.

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 months endedMarch 31, 2015 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, 2014. 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, 2014, 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 March 31, 2015.

25

Part II, Item 6: Exhibits

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation of Connecticut Water Service, Inc. dated May 11, 1998 (Exhibit 3.1 to Form 10-K for the year ended 12/31/98).
3.2	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Connecticut Water Service, Inc. dated August 27, 1998 (Exhibit 3 to Form 8-K filed on September 25, 1998).
3.3	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Connecticut Water Service, Inc. dated August 6, 2001 (Exhibit 3.3 to Form 10-K for the year ended 12/31/14).
3.4	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Connecticut Water Service, Inc. dated April 23, 2004. (Exhibit 3.5 to Form 10-Q for the quarter ended 3/31/04).
3.5	Certification of Incorporation of The Connecticut Water Company effective April, 1998. (Exhibit 3.3 to Form 10-K for the year ended 12/31/98).
3.6	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).
10.1	Loan Agreement by and between The Maine Water Company and Maine Municipal Bond Bank dated March 17, 2015. (Exhibit 10.1 to Form 8-K filed March 18, 2015).
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

26

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:	May 6, 2015	By:  /s/ David C. Benoit
		David C. Benoit Senior Vice President – Finance and Chief Financial Officer
Date:	May 6, 2015	By:  /s/ Nicholas A. Rinaldi
		Nicholas A. Rinaldi Controller

27

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

May 6, 2015

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 Senior Vice President – Finance

May 6, 2015

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 March 31, 2015 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

May 6, 2015

/s/ David C. Benoit

David C. Benoit

May 6, 2015

XML

Segment Reporting Assets by Segment (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Segment Reporting Information [Line Items]
Total Plant and Other Investments	$ 516,541	$ 515,211
Other Assets	157,341	155,978
Assets	673,882	671,189
Water Activities [Member]
Segment Reporting Information [Line Items]
Total Plant and Other Investments	515,897	514,606
Other Assets	154,510	152,929
Services and Rentals and Real Estate Combine [Member]
Segment Reporting Information [Line Items]
Total Plant and Other Investments	644	605
Other Assets	$ 2,831	$ 3,049

XML

Long-Term Debt Long-Term Debt Parenthetical (Details)	Mar. 31, 2015	Dec. 31, 2014
Parent [Member] | Connecticut Water Service Term Loan Note and Supplement A [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.09%	4.09%
The Connecticut Water Company [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%
The Connecticut Water Company [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%
The Connecticut Water Company [Member] | CoBank Note Payable, Due 2020 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.16%	3.16%
The Connecticut Water Company [Member] | CoBank Note Payable Due 2022 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.51%	3.51%
The Connecticut Water Company [Member] | CoBank Note Payable Due 2028 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.29%	4.29%
The Connecticut Water Company [Member] | CoBank Note Payable Due 2032 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.72%	4.72%
The Connecticut Water Company [Member] | CoBank Note Payable, Due 2033 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.75%	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%
Maine Water Company [Member] | CoBank Note Payable, Due 2017 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.00%	3.00%
Maine Water Company [Member] | Series L, Due 2018 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	7.72%	7.72%
Maine Water Company [Member] | Series N, Due 2022 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	2.40%	2.40%
Maine Water Company [Member] | Series O, Due 2025 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	1.86%	1.86%
Maine Water Company [Member] | Series P, Due 2028 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	2.23%	2.23%
Maine Water Company [Member] | Series Q, Due 2028 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.01%	0.01%

XML

Fair Value Disclosures Fair Value Disclosures (Tables)

3 Months Ended

Mar. 31, 2015

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 March 31, 2015 (in thousands):

	Level 1		Level 2		Level 3		Total
Asset Type:
Company Owned Life Insurance	$	—	$	3,031	$	—	$	3,031
Money Market Fund	112		—		—		112
Mutual Funds:
Equity Funds (1)	1,820		—		—		1,820
Total	$	1,932	$	3,031	$	—	$	4,963

The following table summarizes our financial instruments measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2014 (in thousands):

	Level 1		Level 2		Level 3		Total
Asset Type:
Company Owned Life Insurance	$	—	$	2,977	$	—	$	2,977
Money Market Fund	166		—		—		166
Mutual Funds:
Equity Funds (1)	1,790		—		—		1,790
Total	$	1,956	$	2,977	$	—	$	4,933

(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.

XML

Segment Reporting Segment Reporting (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Segment Reporting Information [Line Items]
Revenues	$ 21,702	$ 22,032
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest	2,316	3,628
Income Tax Expense (Benefit), Continuing Operations	(787)	642
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	3,103	2,986
Water Activities [Member]
Segment Reporting Information [Line Items]
Revenues	20,340	20,620
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest	1,687	2,918
Income Tax Expense (Benefit), Continuing Operations	(1,047)	365
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	2,734	2,553
Real Estate Transactions [Member]
Segment Reporting Information [Line Items]
Revenues	0	0
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest	0	0
Income Tax Expense (Benefit), Continuing Operations	0	0
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	0	0
Services and Rentals [Member]
Segment Reporting Information [Line Items]
Revenues	1,362	1,412
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest	629	710
Income Tax Expense (Benefit), Continuing Operations	260	277
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ 369	$ 433

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Net Additions to Utility Plant Used in Continuing Operations	$ 6,523	$ 6,402
Operating Activities:
Net Income	3,103	2,986
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Deferred Revenues	249	(47)
Provision for Deferred Income Taxes and Investment Tax Credits, Net	(1,366)	226
Allowance for Funds Used During Construction	(90)	(98)
Depreciation (including $220 and $291 in 2015 and 2014, respectively, charged to other accounts)	3,356	3,099
Change in Assets and Liabilities:
Increase in Accounts Receivable and Accrued Unbilled Revenues	1,468	1,506
Increase in Prepayments and Other Current Assets	(1,557)	(1,498)
(Increase) Decrease in Other Non-Current Items	632	715
Increase in Accounts Payable, Accrued Expenses and Other Current Liabilities	292	(1,933)
Total Adjustments	2,984	1,970
Net Cash and Cash Equivalents Provided by Operating Activities	6,087	4,956
Investing Activities:
Release of restricted cash	0	1,165
Net Cash and Cash Equivalents Used in Investing Activities	(6,523)	(5,237)
Financing Activities:
Proceeds from Interim Bank Loans	5,422	0
Repayment of Interim Bank Loans	(1,991)	0
Proceeds from Issuance of Common Stock	366	419
Costs to Issue Long-Term Debt and Common Stock	(5)	0
Repayment of Long-Term Debt Including Current Portion	(661)	(554)
Advances from Others for Construction	52	64
Cash Dividends Paid	(2,878)	(2,744)
Net Cash and Cash Equivalents (Used in) Provided by Financing Activities	305	(2,815)
Net (Decrease) Increase in Cash and Cash Equivalents	(131)	(3,096)
Cash and Cash Equivalents at Beginning of Period	2,475	18,371
Cash and Cash Equivalents at End of Year	2,344	15,275
Non-Cash Investing and Financing Activities:
Non-Cash Contributed Utility Plant	8	247
Short-term Investment of Bond Proceeds Held in Restricted Cash	1,864
Cash Paid for:
Interest	931	969
State and Federal Income Taxes	$ 130	$ 75

XML

Earnings per Share Earnings per Share (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Common Stock, Shares, Outstanding	11,151,193	11,078,336	11,124,630
Weighted Average Number of Shares Outstanding, Basic	10,924,330	10,868,784
Diluted (in shares)	11,144,297	11,061,324
Basic (in dollars per share)	$ 0.28	$ 0.27
Incremental Common Shares Attributal To Share Based Payements Arrangements	$ 0.00	$ 0.00
Earnings Per Share, Diluted	$ 0.28	$ 0.27

XML

Pension and Other Post-Retirement Benefits Pension Benefit Cost (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Pension Plans, Defined Benefit [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Benefit Plan, Service Cost	$ 570	$ 488
Defined Benefit Plan, Interest Cost	771	763
Defined Benefit Plan, Expected Return on Plan Assets	(966)	(889)
Defined Benefit Plan, Amortization of Prior Service Cost (Credit)	4	18
Defined Benefit Plan, Amortization of Gains (Losses)	691	273
Defined Benefit Plan, Net Periodic Benefit Cost	1,070	653
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	152	154
Defined Benefit Plan, Interest Cost	147	160
Defined Benefit Plan, Expected Return on Plan Assets	(81)	(77)
Defined benefit plan amortization of regulatory assets	56	56
Defined Benefit Plan, Amortization of Prior Service Cost (Credit)	(142)	(201)
Defined Benefit Plan, Amortization of Gains (Losses)	110	68
Defined Benefit Plan, Net Periodic Benefit Cost	$ 242	$ 160

XML

Earnings per Share EPS in Text Tagging (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
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 5 months 12 days
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	$ 1.7

XML

Accumulated Other Comprehensive Income (Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014	Dec. 31, 2013
Accumulated Other Comprehensive Income (Loss) Tables [Abstract]
Other Comprehensive Income (Loss), Reclassification Adjustment for Sale of Securities Included in Net Income, before Tax	$ 0	$ 18
Other Comprehensive Income (Loss), Reclassification Adjustment for Sale of Securities Included in Net Income, Tax	0	(7)
Accumulated Other Comprehensive Loss	(1,492)	(57)	(1,603)	(115)
Other Comprehensive Income (Loss), Reclassification Adjustment for Sale of Securities Included in Net Income, Net of Tax	0	11
Other Comprehensive Income (Loss), Reclassification, Pension and Other Postretirement Benefit Plans, Net Gain (Loss) Recognized in Net Periodic Benefit Cost, before Tax	135	74
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Tax	(38)	(13)
Accumulated Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax	312	256	298	259
Accumulated Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net of Tax	(1,804)	(313)	(1,901)	(374)
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, before Reclassification Adjustments, Net of Tax	14	(14)
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	14	(14)
Other Comprehensive Income (Loss), Reclassification, Pension and Other Postretirement Benefit Plans, Net Gain (Loss) Recognized in Net Periodic Benefit Cost, Net of Tax	97	61
Total Amounts Reclassified From AOCI, Net of Tax	97	72
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax	14	(3)
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax	97	61
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	$ 111	$ 58

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CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (Parenthetical) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Dividends Declared:
Common Stock (in dollars per share)	$ 0.2575	$ 0.2475
Cumulative Preferred Stock
Dividends Declared:
Preferred Stock (in dollars per share)	$ 0.225	$ 0.225
Series A Voting
Dividends Declared:
Preferred Stock (in dollars per share)	$ 0.20	$ 0.20

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Long-Term Debt Long-Term Debt (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	$ 177,689	$ 176,601
Long-term Debt, Current Maturities	(2,464)	(2,457)
Long-term Debt	177,689	176,601
Parent [Member] | Connecticut Water Service Term Loan Note and Supplement A [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	15,221	15,466
The Connecticut Water Company [Member]
Debt Instrument [Line Items]
Long-term Debt, Current Maturities	(134,599)	(134,643)
The Connecticut Water Company [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
The Connecticut Water Company [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
The Connecticut Water Company [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
The Connecticut Water Company [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
The Connecticut Water Company [Member] | CoBank Note Payable, Due 2020 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	8,000	8,000
The Connecticut Water Company [Member] | CoBank Note Payable Due 2022 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	14,795	14,795
The Connecticut Water Company [Member] | Unsecured Water Facilities Revenue Refinancing Bonds Series A Issued 2011 Due 2021 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	23,439	23,483
The Connecticut Water Company [Member] | CoBank Note Payable Due 2028 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	17,020	17,020
The Connecticut Water Company [Member] | CoBank Note Payable Due 2032 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	14,795	14,795
The Connecticut Water Company [Member] | CoBank Note Payable, Due 2033 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	14,550	14,550
Maine Water Company [Member]
Debt Instrument [Line Items]
Long-term Debt, Current Maturities	(29,577)	(28,129)
Maine Water Company [Member] | Maine Water Company Series G [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	9,000	9,000
Maine Water Company [Member] | Maine Water Company Series J [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	339	424
Maine Water Company [Member] | Maine Water Company Series K [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	656	698
Maine Water Company [Member] | Maine Water Company Series L [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	75	83
Maine Water Company [Member] | Maine Water Company Series M [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	361	381
Maine Water Company [Member] | Maine Water Company Series N [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	431	431
Maine Water Company [Member] | Maine Water Company Series O [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	127	133
Maine Water Company [Member] | Maine Water Company Series P [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	411	431
Maine Water Company [Member] | Maine Water Company Series R [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	227	237
Maine Water Company [Member] | Maine Water Company Series S [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	650	672
Maine Water Company [Member] | Maine Water Company Series T [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	1,823	1,886
Maine Water Company [Member] | Fair Value Adjustment of Long-Term Debt Assume [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	756	820
Maine Water Company [Member] | 2012 Series U, Due 2042 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	160	165
Maine Water Company [Member] | 2013 Series V, Due 2033 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	1,360	1,385
Maine Water Company [Member] | CoBank Note Payable, Due 2017 [Member]
Debt Instrument [Line Items]
Long-term Debt, Current Maturities	(1,965)	(1,965)
Maine Water Company [Member] | CoBank Note Payable, Due 2024 [Member]
Debt Instrument [Line Items]
Long-term Debt, Current Maturities	(4,500)	(4,500)
Maine Water Company [Member] | Series L, Due 2018 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	2,250	2,250
Maine Water Company [Member] | Series N, Due 2022 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	1,176	1,251
Maine Water Company [Member] | Series O, Due 2025 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	846	846
Maine Water Company [Member] | Series P, Due 2028 [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	1,324	1,354
Maine Water Company [Member] | Series Q, Due 2028 [Member]
Debt Instrument [Line Items]
Long-term Debt, Current Maturities	(1,864)	0
Maine Water Company [Member] | Long Term Capital Leases [Member]
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities	$ 32	$ 37

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Income Tax Expense Income Tax Expense (Details)	3 Months Ended
	Mar. 31, 2015 Rate	Mar. 31, 2014 Rate
Income Taxes [Abstract]
Effective Income Tax Rate, Continuing Operations	(34.00%)	17.70%
Effective Tax Rate Excluding Reserve Against Fixed Capital Investment Credits Claimed in Prior Years	11.80%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate	41.00%

XML

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
ASSETS
Utility Plant	$ 688,444	$ 685,654
Construction Work in Progress	10,740	9,304
Gross Utility Plant	699,184	694,958
Accumulated Provision for Depreciation	(191,282)	(188,019)
Net Utility Plant	507,902	506,939
Other Property and Investments	8,639	8,271
Cash and Cash Equivalents	2,344	2,475
Accounts Receivable (Less Allowance, 2015 - $1,172; 2014 - $1,202)	11,424	11,971
Accrued Unbilled Revenues	7,362	8,283
Materials and Supplies	1,496	1,486
Prepayments and Other Current Assets	13,526	11,953
Total Current Assets	36,152	36,168
Restricted Cash	1,864	0
Unamortized Debt Issuance Expense	6,162	6,292
Unrecovered Income Taxes - Regulatory Asset	58,863	57,331
Pension Benefits - Regulatory Asset	13,061	13,713
Post-Retirement Benefits Other Than Pension - Regulatory Asset	2,598	2,626
Goodwill	31,685	31,685
Deferred Charges and Other Costs	6,956	8,164
Total Regulatory and Other Long-Term Assets	121,189	119,811
Total Assets	673,882	671,189
CAPITALIZATION AND LIABILITIES
Common Stock Without Par Value: Authorized - 25,000,000 Shares - Issued and Outstanding: 2015 - 11,151,193; 2014 - 11,124,630	142,163	141,684
Retained Earnings (Accumulated Deficit)	69,595	69,370
Accumulated Other Comprehensive Loss	(1,492)	(1,603)
Common Stockholders' Equity	210,266	209,451
Preferred Stock	772	772
Long-Term Debt	177,689	176,601
Total Capitalization	388,727	386,824
Debt, Current	2,464	2,457
Interim Bank Loans Payable	5,422	1,991
Accounts Payable and Accrued Expenses	7,222	10,019
Accrued Interest	1,474	693
Customer Refund Liability, Current	6,179	6,079
Other Current Liabilities	2,321	2,383
Total Current Liabilities	25,082	23,622
Advances for Construction	25,854	26,718
Deferred Federal and State Income Taxes	52,003	53,322
Unfunded Future Income Taxes	58,451	56,919
Long-Term Compensation Arrangements	36,451	35,748
Unamortized Investment Tax Credits	1,320	1,339
Refund to Customers - Regulatory Liability	0	1,550
Other Long-Term Liabilities	769	776
Total Long-Term Liabilities	174,848	176,372
Contributions in Aid of Construction	85,225	84,371
Commitments and Contingencies	0	0
Total Capitalization and Liabilities	$ 673,882	$ 671,189

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Other Comprehensive Income, net of tax
Reclassification to Pension and Post-Retirement Benefits Plans, net of tax (expense) benefit of	$ 37	$ 13
Unrealized Investment loss, net of tax expense of	$ 14	$ (2)

XML

Fair Value Disclosures Fair Value of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	$ 4,963	$ 4,933
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	1,932	1,956
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	3,031	2,977
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	3,031	2,977
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	3,031	2,977
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	112	166
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	112	166
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	1,820	1,790
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	1,820	1,790
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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Earnings per Share Earnings per Share (Tables)

3 Months Ended

Mar. 31, 2015

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 stock awards):

Three months ended March 31,	2015		2014
Common Shares Outstanding End of Period:	11,151,193		11,078,336
Weighted Average Shares Outstanding (Days Outstanding Basis):
Basic	10,924,330		10,868,784
Diluted	11,144,297		11,061,324
Basic Earnings per Share	$	0.28	$	0.27
Dilutive Effect of Stock Awards	—		—
Diluted Earnings per Share	$	0.28	$	0.27

XML

Fair Value Disclosures In Text Tagging (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term Debt, Fair Value	$ 193,877	$ 189,942
Long-term Debt	177,689	176,601
Advances for Construction	$ 25,854	$ 26,718

XML

Long-Term Debt Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2015

Long-term Debt, Unclassified [Abstract]

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

Long-Term Debt at March 31, 2015 and December 31, 2014 consisted of the following (in thousands):

		2015			2014
Connecticut Water Service, Inc.:
4.09%	Term Loan Note	$	15,221		$	15,466
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
5.10%	2009 A Series, Due 2039	19,950			19,950
5.00%	2011 A Series, Due 2021	23,439			23,483
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			14,550
Total The Connecticut Water Company		134,599			134,643
The Maine Water Company:
8.95%	1994 Series G, Due 2024	9,000			9,000
2.68%	1999 Series J, Due 2019	339			424
0.00%	2001 Series K, Due 2031	656			698
2.58%	2002 Series L, Due 2022	75			83
1.53%	2003 Series M, Due 2023	361			381
1.73%	2004 Series N, Due 2024	431			431
0.00%	2004 Series O, Due 2034	127			133
1.76%	2006 Series P, Due 2026	411			431
1.57%	2009 Series R, Due 2029	227			237
0.00%	2009 Series S, Due 2029	650			672
0.00%	2009 Series T, Due 2029	1,823			1,886
0.00%	2012 Series U, Due 2042	160			165
1.00%	2013 Series V, Due 2033	1,360			1,385
2.52%	CoBank Note Payable, Due 2017	1,965			1,965
4.24%	CoBank Note Payable, Due 2024	4,500			4,500
7.72%	BSWC Series L, Due 2018	2,250			2,250
2.40%	BSWC Series N, Due 2022	1,176			1,251
1.86%	BSWC Series O, Due 2025	846			846
2.23%	BSWC Series P, Due 2028	1,324			1,354
0.01%	BSWC Series Q, Due 2035	1,864			—
Various	Various Capital Leases	32			37
Total The Maine Water Company		29,577			28,129
Add: Acquisition Fair Value Adjustment		756			820
Less: Current Portion		(2,464		)	(2,457		)
Total Long-Term Debt		$	177,689		$	176,601

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CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Balance at Beginning of Period	$ 69,370	$ 59,277
Net Income	3,103	2,986
Retained Earnings before Dividends	72,473	62,263
Dividends Declared:
Cumulative Preferred, Class A, $0.20 per share for the three months ended March 31, 2015 and 2014 respectively	9	9
Common Stock - $0.2575 per share and $0.2425 per share for the three months ended March 31, 2015 and 2014, respectively	2,869	2,735
Total Dividends Declared	2,878	2,744
Balance at End of Period	69,595	59,519
Series A Voting
Dividends Declared:
Cumulative Preferred, Class A, $0.20 per share for the three months ended March 31, 2015 and 2014 respectively	3	3
Cumulative Preferred Stock
Dividends Declared:
Cumulative Preferred, Class A, $0.20 per share for the three months ended March 31, 2015 and 2014 respectively	$ 6	$ 6

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Issued	11,151,193	11,124,630
Outstanding	11,151,193	11,124,630
ASSETS
Allowance	$ 1,172	$ 1,202
Capitalization, Long-term Debt and Equity [Abstract]
Common Stock, No Par Value	$ 0	$ 0
Common Stock, Shares Authorized	25,000,000	25,000,000

XML

Fair Value Disclosures

3 Months Ended

Mar. 31, 2015

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 March 31, 2015 (in thousands):

	Level 1		Level 2		Level 3		Total
Asset Type:
Company Owned Life Insurance	$	—	$	3,031	$	—	$	3,031
Money Market Fund	112		—		—		112
Mutual Funds:
Equity Funds (1)	1,820		—		—		1,820
Total	$	1,932	$	3,031	$	—	$	4,963

The following table summarizes our financial instruments measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2014 (in thousands):

	Level 1		Level 2		Level 3		Total
Asset Type:
Company Owned Life Insurance	$	—	$	2,977	$	—	$	2,977
Money Market Fund	166		—		—		166
Mutual Funds:
Equity Funds (1)	1,790		—		—		1,790
Total	$	1,956	$	2,977	$	—	$	4,933

(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 Maine Water’s March 2015 bond offering, 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 2015, 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 March 31, 2015 and December 31, 2014, the estimated fair value of the Company’s long-term debt was $193,877,000 and $189,942,000, respectively, as compared to the carrying amounts of $177,689,000 and $176,601,000, 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.

Advances for Construction – Customer advances for construction have a carrying amount of $25,854,000 and $26,718,000 at March 31, 2015 and December 31, 2014, respectively. Their relative fair values cannot be accurately estimated since future refund payments depend on several variables, including new customer connections, customer consumption levels and future rate increases.

The fair values shown above have been reported to meet the disclosure requirements of FASB ASC 825, “Financial Instruments” (“FASB ASC 825”) and do not purport to represent the amounts at which those obligations would be settled.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2015	Apr. 30, 2015
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	Mar. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		11,152,145

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Segment Reporting

3 Months Ended

Mar. 31, 2015

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

Three months ended March 31, 2015
Segment	Revenues		Pre-Tax Income		Income Tax Expense			Net Income
Water Activities	$	20,340	$	1,687	$	(1,047	)	$	2,734
Real Estate Transactions	—		—		—			—
Services and Rentals	1,362		629		260			369
Total	$	21,702	$	2,316	$	(787	)	$	3,103

Three months ended March 31, 2014
Segment	Revenues		Pre-Tax Income		Income Tax Expense		Net Income
Water Activities	$	20,620	$	2,918	$	365	$	2,553
Real Estate Transactions	—		—		—		—
Services and Rentals	1,412		710		277		433
Total	$	22,032	$	3,628	$	642	$	2,986

The revenues shown in Water Activities above consisted of revenues from water customers of $20,030,000 and $20,260,000 for the three months endedMarch 31, 2015 and 2014, respectively. Additionally, there were revenues associated with utility plant leased to others of $310,000 and $360,000 for the three months endedMarch 31, 2015 and 2014, respectively. The revenues from water customers for the three months endedMarch 31, 2015 and 2014 include $189,000 reduction in revenues and $107,000 in additional revenues related to the implementation of the WRA, respectively.

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.

Assets by segment (in thousands):

	March 31, 2015		December 31, 2014
Total Plant and Other Investments:
Water Activities	$	515,897	$	514,606
Non-Water	644		605
	516,541		515,211
Other Assets:
Water Activities	154,510		152,929
Non-Water	2,831		3,049
	157,341		155,978
Total Assets	$	673,882	$	671,189

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CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Statement [Abstract]
Operating Revenues	$ 20,030	$ 20,260
Operating Expenses
Operation and Maintenance	11,324	10,667
Depreciation	3,136	2,808
Income Taxes	(941)	494
Taxes Other Than Income Taxes	2,346	2,387
Total Operating Expenses	15,865	16,356
Net Operating Revenues	4,165	3,904
Other Utility Income, Net of Taxes	155	185
Total Utility Operating Income	4,320	4,089
Other Income (Deductions), Net of Taxes
Non-Water Sales Earnings	369	433
Allowance for Funds Used During Construction	90	98
Other	(7)	18
Total Other Income, Net of Taxes	452	549
Interest and Debt Expense
Interest on Long-Term Debt	1,774	1,751
Interest Income (Expense), Net	(132)	(158)
Amortization of Debt Expense	27	59
Total Interest and Debt Expense	1,669	1,652
Net Income	3,103	2,986
Preferred Stock Dividend Requirement	9	9
Net Income Applicable to Common Stock	$ 3,094	$ 2,977
Weighted Average Common Shares Outstanding:
Basic (in shares)	10,924,330	10,868,784
Diluted (in shares)	11,144,297	11,061,324
Earnings Per Common Share:
Basic (in dollars per share)	$ 0.28	$ 0.27
Diluted (in dollars per share)	$ 0.28	$ 0.27
Dividends Per Common Share (in dollars per share)	$ 0.2575	$ 0.2475

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Pension and Other Post-Retirement Benefits

3 Months Ended

Mar. 31, 2015

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 months endedMarch 31, 2015 and 2014.

Pension Benefits

Components of Net Periodic Cost (in thousands):

	Three Months
Period ended March 31,	2015			2014
Service Cost	$	570		$	488
Interest Cost	771			763
Expected Return on Plan Assets	(966		)	(889		)
Amortization of:
Prior Service Cost	4			18
Net Recognized Loss	691			273
Net Periodic Benefit Cost	$	1,070		$	653

The Company does not plan to make a contribution to its defined benefit pension plan in 2015 for the 2014 plan year, as allowed by the plan’s current funding status.

Post-Retirement Benefits Other Than Pension (PBOP)

Components of Net Periodic Cost (in thousands):

	Three Months
Period ended March 31,	2015			2014
Service Cost	$	152		$	154
Interest Cost	147			160
Expected Return on Plan Assets	(81		)	(77		)
Other	56			56
Amortization of:
Prior Service Credit	(142		)	(201		)
Recognized Net Loss	110			68
Net Periodic Benefit Cost	$	242		$	160

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Basis of Preparation of Financials

3 Months Ended

Mar. 31, 2015

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. (the “Company”) and its wholly-owned subsidiaries, 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.  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 Company’s primary operating subsidiaries are: The Connecticut Water Company (“Connecticut Water”) and The Maine Water Company (“Maine Water”). The Biddeford & Saco Water Company (“BSWC”) was merged with and into Maine Water, with Maine Water remaining as the surviving entity, effective January 1, 2014. The Condensed Consolidated Balance Sheet at December 31, 2014 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, 2014 (the “10-K”).

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 water customers in Connecticut and Maine are established under the jurisdiction of and are approved by the Connecticut Public Utilities Regulatory Authority (“PURA”) and the Maine Public Utility Commission (“MPUC”), respectively. 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 March 31, 2015 were 9.75% and 7.32%, respectively. Maine Water’s average allowed return on equity and return on rate base, effective March 31, 2015 were 9.50% and 7.96%, respectively. The PURA establishes rates in Connecticut on a company-wide basis while the MPUC approves rates on a division-by-division basis.

Connecticut Rates

Effective April 1, 2014, in accordance with a settlement agreement with the Office of the Consumer Counsel of the State of Connecticut (the “OCC”) and the Office of the Attorney General for the State of Connecticut, Connecticut Water’s cumulative Water Infrastructure Conservation Adjustment (“WICA”) surcharge of 7.89% was rolled into base rates charged to customers.

On July 29, 2014, Connecticut Water filed a WICA application with the PURA requesting a 1.59% surcharge to customers’ bills, representing approximately $12.7 million in WICA related projects. On September 26, 2014, the PURA approved the 1.59% surcharge with the new rates becoming effective on October 1, 2014.

On January 28, 2015, Connecticut Water filed a WICA application with the PURA requesting a 1.35% surcharge to customers' bills, representing approximately $11.2 million in WICA related projects. On February 23, 2015, Connecticut Water filed for a 0.10% reconciliation adjustment for the 2014 shortfall in WICA. On March 25 and 27, 2015, the PURA approved the reconciliation adjustment and the WICA application, respectively. Effective April 1, 2015, the cumulative WICA surcharge is now 3.04%.

On June 5, 2013, the Connecticut’s General Assembly passed Public Act 13-78, “An Act Concerning Water Infrastructure and Conservation, Municipal Reporting Requirements and Unpaid Utility Accounts at Multi-Family Dwellings” (“PA 13-78”), which authorized a Water Revenue Adjustment (“WRA”) to reconcile actual water demands with the demands projected in the last general rate case and allows companies to adjust rates as necessary to recover the revenues approved by PURA in the last general rate case. The WRA removes the financial disincentive for water utilities to develop and implement effective water conservation programs. The WRA allows water companies to defer on the balance sheet, as a regulatory asset or liability, for later collection from or crediting to customers the amount by which actual revenues deviate from the revenues allowed in the most recent general rate proceedings, including WICA proceedings. Additionally, PA 13-78 raised the cap for WICA charges to 10%, from 7.5%, between general rate cases and expands the eligible projects to include energy conservation projects, improvements required to comply with streamflow regulations, and improvements to acquired systems.

Connecticut Water’s allowed revenues for the three months endedMarch 31, 2015, as approved by PURA during our 2010 general rate case and including subsequently approved WICA surcharges, are approximately $16.9 million. Through normal billing for the three months endedMarch 31, 2015, revenue for Connecticut Water would have been approximately $17.1 million had the WRA not been implemented. As a result of the implementation of the WRA, Connecticut Water recorded $0.2 million in reduction to revenue for the three months endedMarch 31, 2015.

Maine Rates

On March 25, 2014, the MPUC approved a rate increase resulting in an annual increase of $340,000 in revenues for one of Maine Water’s divisions requested in April 2013, which became effective on that date. Additionally, Maine Water filed for a general rate increase for its Biddeford and Saco division, its largest division, on November 5, 2014 requesting $1.7 million in additional revenues, offset by $700,000 in the first year due to the adoption of Internal Revenue Service (“IRS”) Revenue Procedure 2012-19 (“Repair Regulations”). Maine Water entered into a stipulation agreement (“Biddeford Stipulation Agreement”) with Maine’s Office of Public Advocate which allowed for flow-through treatment of the Repair Regulations retroactive to January 1, 2014. As part of the Biddeford Stipulation Agreement, customers in the Biddeford and Saco division would receive the benefit of the Repair Regulations, approximately $880,000, over a three year period. Excluding the impact of the refund to customers, the Biddeford Stipulation Agreement calls for an annual increase in rates of approximately $1.3 million. MPUC issued a final decision related to the Biddeford Stipulation Agreement on March 13, 2015, with the new rates, and the first year of the refund, effective on March 10, 2015.

Effective June 2013, a Water Infrastructure Charge (“WISC”) became available in Maine that allows for expedited recovery of investment in water system infrastructure replacement, both treatment and distribution. Because the MPUC sets rates for Maine Water on a division-by-division basis, the WISC must be implemented in the same manner. To date, Maine Water has implemented a WISC in all of its ten divisions with expected annual revenue totaling $442,000.

On October 30, 2014, Maine Water petitioned the MPUC for approval of an accounting order that would allow it to refund to its customers a federal income tax refund stemming from the adoption of Repair Regulations to eight of its ten divisions, and to allow flow-through treatment of the repair deduction as of January 1, 2014. On February 26, 2015, the MPUC approved a stipulation between Maine Water and the Office of the Public Advocate (“Maine Water Stipulation Agreement”) that refunds $2.9 million to the customers of the eight divisions over a two year period starting no later than July 1, 2015, and allowing the requesting accounting treatment. In addition, Maine Water agreed not to file a general rate case during the two year refund period in any of the eight divisions that were allowed the refund. As part of the Biddeford Stipulation Agreement and the Maine Water Stipulation Agreement, Maine Water is required to determine the remaining deferred tax liabilities associated with the fixed assets which the Company will be deducting as part of the adoption of the Repair Regulations. All parties to the Biddeford Stipulation Agreement, the Maine Water Stipulation Agreement, and the MPUC, agree that any benefit resulting from the elimination of deferred tax liabilities previously recorded on qualifying fixed assets subject to the Repair Regulation deduction, be deferred and considered in a separate docket initiated after the Company has analyzed this additional deferred tax liability in more detail. On April 8, 2015, Maine Water filed a petition with the MPUC that asks for a ten year amortization of the deferred taxes in each of its ten divisions, and this petition is still pending before the MPUC. Maine Water believes that this analysis is an integral component to the overall accounting for the adoption of the Repair Regulations and the adoption of the flow-through method of accounting for regulatory accounting related to the adoption of the Repair Regulations. As such, though Maine Water believes the Biddeford Stipulation Agreement, the Maine Water Stipulation Agreement and MPUC orders are probable of being approved, Maine Water believes it is not possible to estimate the accounting impact of the Biddeford Stipulation Agreement and the Maine Water Stipulation Agreement including the separate analysis of the deferred tax liabilities as of March 31, 2015 and as a result has not recorded the impact of flow through accounting related to these deductions.

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Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2015

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 months endedMarch 31, 2015 and 2014 is as follows (in thousands):

Three months ended March 31, 2015	Unrealized Gains on Investments			Defined Benefit Items			Total
Beginning Balance (a)	$	298		$	(1,901	)	$	(1,603	)
Other Comprehensive Income (Loss) Before Reclassification	14			—			14
Amounts Reclassified from AOCI	—			97			97
Net current-period Other Comprehensive Income (Loss)	14			97			111
Ending Balance	$	312		$	(1,804	)	$	(1,492	)
Three months ended March 31, 2014	Unrealized Gains on Investments			Defined Benefit Items			Total
Beginning Balance (a)	$	259		$	(374	)	$	(115	)
Other Comprehensive Income (Loss) Before Reclassification	(14		)	—			(14		)
Amounts Reclassified from AOCI	11			61			72
Net current-period Other Comprehensive Income (Loss)	(3		)	61			58
Ending Balance	$	256		$	(313	)	$	(57	)
(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 Statements of Income for the three months endedMarch 31, 2015 and 2014 (in thousands):

Details about Other AOCI Components	Amounts Reclassified from AOCI Three Months Ended March31,2015(a)			Amounts Reclassified from AOCI Three Months Ended March31,2014(a)			Affected Line Items on Income Statement
Realized Gains on Investments	$	—		$	18		Other Income
Tax expense	—			(7		)	Other Income
	—			11
Amortization of Recognized Net Gain from Defined Benefit Items	135			74			Other Income (b)
Tax expense	(38		)	(13		)	Other Income
	97			61
Total Reclassifications for the period, net of tax	$	97		$	72
(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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Income Tax Expense

3 Months Ended

Mar. 31, 2015

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 beginning in the fourth quarter of 2013.  On March 24, 2015, the Company was notified by the Connecticut Department of Revenue Services that the audit was expanded to include the 2012 and 2013 tax years. The State focused its review on tax credits associated with fixed capital investment. The Company and the State have come to an agreement regarding investments eligible for the credit. The closing agreement was executed on May 4, 2015. The Company had previously recorded a provision for the possible disallowance of these credits and therefore there was minimal impact in 2015.

On the 2012 Federal tax return, filed in September 2013, Connecticut Water filed a change in accounting method to adopt the IRS’ 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.  On February 11, 2014, the Company was notified by the IRS that its Federal tax filing for 2012 would be reviewed. This review, which began in the first quarter of 2014 and was completed in the first quarter of 2015, resulted in no change to the tax liability. Since the Company had previously recorded a provision for the possible disallowance of the repair deduction in prior periods, the completion of the audit resulted in the reversal of the reserves in the amount of $1,185,000. While the Company maintains the belief that the deduction taken on its tax return is appropriate, the methodology for determining the deduction has not been agreed to by the taxing authorities.  On the 2013 Federal tax return, filed in September 2014, Maine Water filed the same change in accounting method. Through March 31, 2015, the Company has recorded, as required by FASB ASC 740, a provision of $4.4 million for a portion of the benefit that is not being returned to customers resulting from any possible future tax authority challenge.

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 three months endedMarch 31, 2015 and 2014.  Additionally, there were no accruals relating to interest or penalties as of March 31, 2015 and December 31, 2014.  The Company remains subject to examination by federal tax authorities for the 2011 and 2013 tax years; and the state tax authorities for the 2009 through 2013 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 2015 Federal Tax Return to be filed in September 2016.  As a result, through the first quarter of 2015, the Company has estimated the portion of its infrastructure investment that will qualify as a repair deduction for 2015 and has reflected that deduction in its effective tax rate at 75% of the expected $17 million of infrastructure improvement.  Consistent with other differences between book and tax expenditures, the Company is required to use the flow-through method to account for any timing differences not required by the IRS to be normalized.

The Company’s effective income tax rate for the three months endedMarch 31, 2015 and 2014 was (34.0)% and 17.7%, respectively.  The Company’s effective tax rate, excluding discrete items booked during the quarter, was 11.8% for the three months endedMarch 31, 2015. These discrete items include adjustments related to the provisions for the repair deduction and the Connecticut credits. The statutory income tax rates during each period were 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)

3 Months Ended

Mar. 31, 2015

Accumulated Other Comprehensive Income (Loss) [Abstract]

Comprehensive Income (Loss) Note [Text Block]

5. Accumulated Other Comprehensive Income

The changes in Accumulated Other Comprehensive Income (Loss) (“AOCI”) by component, net of tax, for the three months endedMarch 31, 2015 and 2014 is as follows (in thousands):

Three months ended March 31, 2015	Unrealized Gains on Investments			Defined Benefit Items			Total
Beginning Balance (a)	$	298		$	(1,901	)	$	(1,603	)
Other Comprehensive Income (Loss) Before Reclassification	14			—			14
Amounts Reclassified from AOCI	—			97			97
Net current-period Other Comprehensive Income (Loss)	14			97			111
Ending Balance	$	312		$	(1,804	)	$	(1,492	)
Three months ended March 31, 2014	Unrealized Gains on Investments			Defined Benefit Items			Total
Beginning Balance (a)	$	259		$	(374	)	$	(115	)
Other Comprehensive Income (Loss) Before Reclassification	(14		)	—			(14		)
Amounts Reclassified from AOCI	11			61			72
Net current-period Other Comprehensive Income (Loss)	(3		)	61			58
Ending Balance	$	256		$	(313	)	$	(57	)
(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 Statements of Income for the three months endedMarch 31, 2015 and 2014 (in thousands):

Details about Other AOCI Components	Amounts Reclassified from AOCI Three Months Ended March31,2015(a)			Amounts Reclassified from AOCI Three Months Ended March31,2014(a)			Affected Line Items on Income Statement
Realized Gains on Investments	$	—		$	18		Other Income
Tax expense	—			(7		)	Other Income
	—			11
Amortization of Recognized Net Gain from Defined Benefit Items	135			74			Other Income (b)
Tax expense	(38		)	(13		)	Other Income
	97			61
Total Reclassifications for the period, net of tax	$	97		$	72
(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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Earnings per Share

3 Months Ended

Mar. 31, 2015

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 stock awards):

Three months ended March 31,	2015		2014
Common Shares Outstanding End of Period:	11,151,193		11,078,336
Weighted Average Shares Outstanding (Days Outstanding Basis):
Basic	10,924,330		10,868,784
Diluted	11,144,297		11,061,324
Basic Earnings per Share	$	0.28	$	0.27
Dilutive Effect of Stock Awards	—		—
Diluted Earnings per Share	$	0.28	$	0.27

Total unrecognized compensation expense for all stock awards was approximately $1.7 million as of March 31, 2015 and will be recognized over a weighted average period of 1.4 years.

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New Accounting Pronouncements

3 Months Ended

Mar. 31, 2015

Notes To Financial Statements [Abstract]

Recently Adopted and New Accounting Pronouncements

4. Recently Adopted and New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” which amends its guidance related to revenue recognition. ASU 2014-09 requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The following steps are applied in the updated guidance: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. ASU 2014-09 is effective for public companies for fiscal years, and interim periods within those years, beginning after December 15, 2016, and can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption, however early adoption is not permitted. On April 1, 2015, the FASB voted for a one-year deferral of the effective date of ASU 2014-09, making ASU 2014-09 effective for public companies for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company is currently determining its implementation approach and assessing the impact that this guidance may have on our consolidated financial position.

In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The Company is currently assessing the impact of this standard on its consolidated financial statements and footnote disclosures, but does not expect that the adoption of this guidance will materially impact our consolidated financial position.

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Long-Term Debt

3 Months Ended

Mar. 31, 2015

Notes To Financial Statements [Abstract]

Long-Term Debt

Long-Term Debt

Long-Term Debt at March 31, 2015 and December 31, 2014 consisted of the following (in thousands):

		2015			2014
Connecticut Water Service, Inc.:
4.09%	Term Loan Note	$	15,221		$	15,466
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
5.10%	2009 A Series, Due 2039	19,950			19,950
5.00%	2011 A Series, Due 2021	23,439			23,483
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			14,550
Total The Connecticut Water Company		134,599			134,643
The Maine Water Company:
8.95%	1994 Series G, Due 2024	9,000			9,000
2.68%	1999 Series J, Due 2019	339			424
0.00%	2001 Series K, Due 2031	656			698
2.58%	2002 Series L, Due 2022	75			83
1.53%	2003 Series M, Due 2023	361			381
1.73%	2004 Series N, Due 2024	431			431
0.00%	2004 Series O, Due 2034	127			133
1.76%	2006 Series P, Due 2026	411			431
1.57%	2009 Series R, Due 2029	227			237
0.00%	2009 Series S, Due 2029	650			672
0.00%	2009 Series T, Due 2029	1,823			1,886
0.00%	2012 Series U, Due 2042	160			165
1.00%	2013 Series V, Due 2033	1,360			1,385
2.52%	CoBank Note Payable, Due 2017	1,965			1,965
4.24%	CoBank Note Payable, Due 2024	4,500			4,500
7.72%	BSWC Series L, Due 2018	2,250			2,250
2.40%	BSWC Series N, Due 2022	1,176			1,251
1.86%	BSWC Series O, Due 2025	846			846
2.23%	BSWC Series P, Due 2028	1,324			1,354
0.01%	BSWC Series Q, Due 2035	1,864			—
Various	Various Capital Leases	32			37
Total The Maine Water Company		29,577			28,129
Add: Acquisition Fair Value Adjustment		756			820
Less: Current Portion		(2,464		)	(2,457		)
Total Long-Term Debt		$	177,689		$	176,601

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 December 22, 2014, Maine Water and CoBank, ACB (“CoBank”) entered into an amendment to Amended and Restated Master Loan Agreement by and between Maine Water and CoBank, dated as of December 1, 2012 (the “Agreement”) pursuant to which CoBank loaned Maine Water $4,500,000. Maine Water intends to use the proceeds of the above described loan from CoBank to refinance existing debt and to finance capital expenditures.

On March 17, 2015, Maine Water completed the issuance of $1,864,050 aggregate principal amount of its First Mortgage Bonds, Series Q, 0.01% due March 17, 2035 (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 March 17, 2015 (the “Loan Agreement”). The proceeds of the Loan will be used by Maine Water to fund various water facilities projects, including the replacement of a booster station and to fund modifications to a treatment plant, each located in the Town of Biddeford, Maine.

During the first quarter of 2015, the Company paid approximately $245,000 related to Connecticut Water Service’s Term Note Payable issued as part of the acquisition of Maine Water and approximately $416,000 in sinking funds related to Maine Water’s outstanding bonds.

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%. Additionally, Maine Water has restrictions on cash dividends paid based on restricted net assets. The Company and its subsidiaries were in compliance with all covenants at March 31, 2015.

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Long-Term Debt Long-Term Debt in Text (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Long-term Debt, Current Maturities	$ 2,464,000	$ 2,457,000
Monetary Limit of Deceased Bond Holders Redemption per Year	$ 25,000
Percent Limit of Deceased Bond Holders Redemption per Year	3.00%

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

3 Months Ended

Mar. 31, 2015

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
Period ended March 31,	2015			2014
Service Cost	$	570		$	488
Interest Cost	771			763
Expected Return on Plan Assets	(966		)	(889		)
Amortization of:
Prior Service Cost	4			18
Net Recognized Loss	691			273
Net Periodic Benefit Cost	$	1,070		$	653

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
Period ended March 31,	2015			2014
Service Cost	$	152		$	154
Interest Cost	147			160
Expected Return on Plan Assets	(81		)	(77		)
Other	56			56
Amortization of:
Prior Service Credit	(142		)	(201		)
Recognized Net Loss	110			68
Net Periodic Benefit Cost	$	242		$	160

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Segment Reporting Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2015

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 March 31, 2015
Segment	Revenues		Pre-Tax Income		Income Tax Expense			Net Income
Water Activities	$	20,340	$	1,687	$	(1,047	)	$	2,734
Real Estate Transactions	—		—		—			—
Services and Rentals	1,362		629		260			369
Total	$	21,702	$	2,316	$	(787	)	$	3,103

Three months ended March 31, 2014
Segment	Revenues		Pre-Tax Income		Income Tax Expense		Net Income
Water Activities	$	20,620	$	2,918	$	365	$	2,553
Real Estate Transactions	—		—		—		—
Services and Rentals	1,412		710		277		433
Total	$	22,032	$	3,628	$	642	$	2,986

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

Assets by segment (in thousands):

	March 31, 2015		December 31, 2014
Total Plant and Other Investments:
Water Activities	$	515,897	$	514,606
Non-Water	644		605
	516,541		515,211
Other Assets:
Water Activities	154,510		152,929
Non-Water	2,831		3,049
	157,341		155,978
Total Assets	$	673,882	$	671,189

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Lines of Credit Lines of Credit (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Short-term Debt [Line Items]
Line of Credit Facility, Current Borrowing Capacity	$ 35,000,000
Interim Bank Loans Payable	5,422,000	1,991,000
Line of Credit Facility, Remaining Borrowing Capacity	29,600,000
CTWS Line of Credit A [Member]
Short-term Debt [Line Items]
Line of Credit Facility, Current Borrowing Capacity	15,000,000
CTWS Line of Credit B [Member]
Short-term Debt [Line Items]
Line of Credit Facility, Current Borrowing Capacity	$ 20,000,000

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Statement of Comprehensive Income [Abstract]
Net Income	$ 3,103	$ 2,986
Other Comprehensive Income, net of tax
Reclassification to Pension and Post-Retirement Benefits Other Than Pension, net of tax of $37 and $13 for the three months ended March 31, 2015 and 2014, respectively	97	61
Unrealized gain (loss) on investments, net of tax (expense) benefit of $(9) and $2 for the three months ended March 31, 2015 and 2014, respectively	14	(3)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	111	58
Comprehensive Income	$ 3,214	$ 3,044

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation charged to other accounts	$ 220	$ 291

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Basis of Preparation of Financials In text details (Details)	Mar. 31, 2015 Rate
Maine Water Company [Member]
Allowed Rate of Return on Equity	9.50%
Allowed Return on Rate Base	7.96%
The Connecticut Water Company [Member]
Allowed Rate of Return on Equity	9.75%
Allowed Return on Rate Base	7.32%

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Segment Reporting Segment Reporting Textual Information (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Segment Reporting Information [Line Items]
Operating Revenues	$ 20,030,000	$ 20,260,000
Regulated Operating Revenue, Other	310,000	360,000
Water Revenue Adjustment	$ (189,000)	$ 107,000

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Lines of Credit

3 Months Ended

Mar. 31, 2015

Notes To Financial Statements [Abstract]

Lines of Credit

Lines of Credit

The Company maintains a $15.0 million line of credit agreement with CoBank, that is currently scheduled to expire on July 1, 2016.  The Company maintains an additional line of credit of $20.0 million with RBS Citizens, N.A., with an expiration date of June 30, 2017.  As of March 31, 2015, the total lines of credit available to the Company were $35.0 million.  As of March 31, 2015 and December 31, 2014, the Company had $5.4 million and $2.0 million, respectively, of Interim Bank Loans Payable. As of March 31, 2015, the Company had $29.6 million in unused lines of credit.  Interest expense charged on lines of credit will fluctuate based on market interest rates.