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For Immediate Release: July 14, 2005

For More Information, Contact: Donald L. Correll, President and CEO, Pennichuck Corporation
603-882-5191 ext. 2301

Pennichuck Blasts Nashua's Process for Selecting Water System Operator
NH's oldest company says it's focused on delivering service instead of playing guessing game

Merrimack, NH (NASDAQ: PNNW) - Pennichuck Water Service Corporation (PWSC) has issued a different type of response than the city of Nashua may have expected regarding the City's request for proposals (RFP) for a water system operator. Refusing to submit a speculative proposal in response to the City's premature RFP, Pennichuck submitted a letter outlining how the RFP is flawed.

The decision to send the letter instead of writing a highly conditional proposal was based on the RFP's lack of detail in critical areas. The company noted that:
1) The City of Nashua does not own the assets potential operators are being asked to bid on and any final determination of whether the City will ever own those assets is likely years away;
2) The city cannot identify which assets it might own, if any, after a final ruling in the eminent domain battle; and
3) Because the City cannot define the scope of work or when a contractor might be required to begin its work, bidders cannot offer a definitive cost proposal.

In the letter, Stephen J. Densberger, President of Pennichuck Water Service Corporation, wrote, "Because the city does not currently own any assets that would constitute the water utility that is the subject of the RFP and cannot specify the scope of the utility assets, if any, that it will ultimately own, we believe that the city's RFP is premature and any proposal submitted in response to it will necessarily be speculative and unreliable."

"The unusual six-page RFP is deficient in its intent and demonstrates yet again that City officials do not understand the water business, nor do they have any plan to provide water service," said Don Correll, President and CEO of Pennichuck Corporation, PWSC's holding company.

As the City continues its misguided use of time and taxpayers' dollars, Pennichuck intends to continue serving its customers with experienced and professional operations and outstanding customer service.

"We don't have to apply to run the water system. We are running it," said Correll. "We've been doing this for over 150 years and we expect to be doing it for another 150 years."

Densberger's letter also stated, "PWSC believes that any proposals submitted to the city will necessarily be conditional and will be insufficient to form a basis for determining the cost and scope of services to be provided… PWSC believes it is in a position to provide the highest quality service and most efficient operations for any water system that may be intended to serve Nashua or other communities in New Hampshire."

After proposals were submitted today, the city purchaser read aloud the names of the two companies that submitted proposals: Veolia Environnement America and Earth Tech. Veolia Environnement America is a company owned by the same French group that the City has previously said should not be allowed to control operations of the water system. Earth Tech is a subsidiary of Tyco International Ltd.

In response to a separate RFP for a consultant to oversee the operator of the water system, PWSC submitted a separate letter pointing out the additional unnecessary cost and bureaucracy that the City intends to impose on its citizens. The company noted that these costs would not have to be incurred if Pennichuck continued to operate the system, as it has in the past.

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

Pennichuck Corporation is traded on the NASDAQ Stock Market under the symbol "PNNW."

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