Conn. Water Earnings Down | Company sells 200-acre conservation easement to Windsor Locks

Connecticut Water Co. has reported that its net first-quarter profits are down 35 percent from a year earlier, in large part due to higher operations and maintenance expenses and decreased water use.

Net earnings in the quarter totaled $1.1 million, or 13 cents per share on operating revenues of $13.4 million. In the first quarter of 2008, the Clinton-based utility earned $1.7 million, or 20 cents per share on operating revenues of $13.6 million.

First-quarter net income from the company’s core business segment, water activities, was $900,000, or 11 cents per share, down from $1.5 million, or 18 cents per share a year earlier.

The company also suffered a $188,000, or 1.4 percent, decline in revenue, reflecting a 3.4 percent reduction in metered residential water use and the timing of the second phase of a 2007 rate increase.

Operating expenses in the first quarter increased $1 million over the same period in 2008 to $8.2 million, due in part to increased maintenance costs caused by winter weather-related repairs and an expected increase in purchased water costs. The first-quarter purchased water expense reflected a credit associated with the prior year’s transactions, the company said.

One reason for the first-quarter decline in metered water consumption is that 2008 was a leap year, so that its first quarter was one day, or 1.1 percent, longer than this year’s, the company observed. Excluding the effect of the leap year, metered consumption declined about 3.4 percent for an average residential customer, compared to the same period in 2008.

The decline in usage and the timing of the second phase of the 2007 rate increase more than offset the 4.5 percent incremental rate increase related to the company’s 2007 capital investments.

Last week, the company announced that it will sell a conservation easement on a former well field to the town of Windsor Locks, a deal that could generate about $1 million in income this year for the water utility.

The easement covers about 200 acres in several parcels from which the utility once drew water below ground, according to a copy of the sale agreement filed with securities regulators.

An Associated Press report was included in this article.