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For Immediate Release: July 26, 2004

For More Information, Contact: Donald L. Correll, President and CEO, Pennichuck Corporation
603-882-5191

Pennichuck CEO Testifies Before Congressional
Committee on Safe Drinking Water

NASHUA, N.H. (July 26, 2004) -- A Congressional committee studying the complex national issue of safe drinking water heard testimony last week from Donald L. Correll, president and chief executive officer of Pennichuck Corporation (NASDAQ: PNNW).

Testifying on behalf of the National Association of Water Companies (NAWC), whose 150 members own and operate thousands of water and wastewater utilities in 38 states, Correll addressed the House Committee on Energy and Commerce Subcommittee on Environment and Hazardous Materials, of which U.S. Rep. Charles F. Bass (R-NH02) is a member.

Correll's oral and written testimony focused on the need for cost-effective solutions to the problem of funding the replacement of aging and worn-out water infrastructure across the United States. According to a 2002 Environmental Protection Agency (EPA) infrastructure gap analysis, drinking water systems will spend between $154 and $446 billion through 2019. Wastewater systems will spend between $331 and $450 billion over that same period.

Correll said utilities and localities must take the lead in addressing the infrastructure challenge by accessing the many organizational, managerial and financial tools at their disposal. He said that while the federal government has a role in assisting with that challenge, it should not assume a major financial responsibility that would cause a drain on the U.S. Treasury for something that should continue to be the responsibility of the industry and its customers.

Instead, Correll said, the federal government should encourage utilities to pursue smart management practices that will lead to efficient operations, good service, and economic self-sustainability.

Correll said these practices include:

• Utility consolidation;
• Sound asset management;
• Public-private partnerships;
• Full cost-of-service rates.

Regarding public-private partnerships, Correll testified that municipalities large and small all over the country have realized great savings and success through partnerships with private firms. These partnerships typically fall into three categories:

• Privately owned utilities regulated by state and federal institutions;
  
• Municipal utilities contracting out small portions of their operations such as billing or meter reading;
  
• And, multi-year, all-inclusive management contracts wherein a private firm runs and manages most or all aspects of a municipally owned utility.

Correll said cost savings that localities have realized over the years from such arrangements range up to 40%, freeing up much needed capital for infrastructure replacement, without burdening either the customer or the American taxpayer.

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Pennichuck Corporation is a holding company located in Nashua, New Hampshire with three wholly owned operating subsidiaries involved in regulated water supply and distribution in Nashua and towns throughout southern and central New Hampshire; non-regulated, water-related services conducted through Pennichuck Water Service Company; and real estate management and development activities conducted through The Southwood Corporation.