Clinton-based Connecticut Water Co. completed its $1.5 million purchase of the Ellington Acres Co., a water utility serving about 2,300 people in the towns Ellington and Somers.
The two water systems will eventually be interconnected.
Connecticut Water currently serves more than 36,000 customers in northern Connecticut.
According to Eric W. Thornburg, Connecticut Water president and CEO, the transaction will help keep rates lower for customers of both companies.
He said the merger spares Ellington Acres capital investments totaling $1.5 million, including a new water treatment plant and tank.
Connecticut Water avoids $2.24 million in capital investments, including a portion of a needed transmission line to interconnect its Somers and Western systems, improving reliability and fire protection, Thornburg said.
At 11 a.m., shares of Connecticut Water traded at $22.11, down 37 cents, or 1.7 percent.
