Current News

For Immediate Release:
August 7, 2006

Upgrading Pennichuck's Water Treatment Plant:
An Investment in the Future

Merrimack, NH (NASDAQ: PNNW) - Pennichuck Water has undertaken a significant project designed to meet the increasingly stringent regulations placed on public water suppliers all over the country. The regulations are requiring most water suppliers, including Pennichuck Water, to upgrade or enhance their facilities, equipment and processes.

The upgrade of Pennichuck's 25-year-old treatment plant is a comprehensive process, begun in 2003 and slated for completion in 2009. It will ultimately go down in the Company's history books as the single largest capital investment in Pennichuck Water's 154-year history.

Pennichuck's promise: Clean, safe, reliable water

A state-of-the-art water treatment plant when it was built in 1979, the facility now requires enhancements that will ensure it delivers another 25 years of high quality service. This project is multi-faceted and will provide for flexible treatment options, process enhancements, additional finished storage and increased back-up capacity.

Ultimately, the project will increase the back-up capacity to meet water demands during critical events or periods, such as when the city experiences a power outage.

"It is common for us to see an increase in water demand by 50 percent during a hot summer day," said Chris Countie, Water Supply Manager. "While we have been able to successfully accommodate water demand during those times, our upgrade will increase our capacity to accommodate hose demands. The end result is uninterrupted water service for all of our customers."

The increased back-up capacity provides an additional benefit: By increasing the facility's storage capacity, plant operators will be able to shut down the water treatment process for up to 12 hours in order to perform preventative and routine maintenance or construction work inside the plant. That buffer period will help to ensure the same level of service until the work is completed - all without interrupting water service to thousands of customers.

In addition to shoring-up the plant's back-up capacity, part of the upgrade plan calls for going beyond current regulations simply for customer satisfaction. The removal of certain taste and odor compounds will be accomplished, while iron and manganese will be stripped from the water, further reducing color. Ultimately, Pennichuck customers will continue to receive safe, clean and reliable drinking water.

Making an investment in our future

The four-phase, multi-year upgrade will certainly come with a cost. Adhering to stringent federal regulations calls for the inevitable spending to ensure your drinking water is safe and clean. The entire cost of the project is expected to be approximately $38 million and recently, Pennichuck Water Works requested a 36 percent overall increase that will allow the Company to achieve this goal.

"We look critically at our investments in our water systems and work tirelessly to ensure that our customers receive a significant return on their investment," said Hannah McCarthy, CEO and President of Pennichuck Corp. "This investment and the corresponding rate increase is designed to ensure that the treatment plant will continue to meet all new federal standards and will reliably deliver clean and safe water to all our customers. Despite this increased rate, we absolutely believe that the quality and reliability of the drinking water we deliver is an extraordinary value for the price."