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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12

BIRMINGHAM UTILITIES, INC.
--------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No Fee Required

Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.

1) Title of each class of securities to which transaction
applies:

2) Aggregate number of securities to which transaction
applies:

3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the previous filing by
registration statement number, or the Form or Schedule and the
date of its filing.

1) Amount Previously Paid:

2) Form, Schedule or Registration No.:

3) Filing Party:

4) Date Filed:
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BIRMINGHAM UTILITIES, INC.

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
--------------------------

Ansonia, Connecticut
April 5, 2001

Notice is hereby given that the Annual Meeting of Stockholders of
Birmingham Utilities, Inc. (the "Company") will be held on Wednesday, May 9,
2001 at 2:00 p.m., at the principal office of the Company, 230 Beaver Street,
Ansonia, Connecticut 06401, for the following purposes:

(1) To elect ten directors of the Company to serve for the
ensuing year;

(2) To consider and vote on the approval of the Company's
Stock Option Plan for Non-Employee Directors;

(3) To consider and vote on the approval of Dworken, Hillman,
LaMorte & Sterczala, P.C. as the Company's independent
auditors for the year ending December 31, 2001; and

(4) To transact such other business as may properly come
before the Annual Meeting or any adjournment thereof.

Stockholders of record at the close of business on April 2, 2001 will
be entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof. All stockholders are cordially invited to attend the Annual Meeting in
person. Stockholders who are unable to attend the Annual Meeting in person are
requested to complete and date the enclosed form of proxy and return it promptly
in the envelope provided. No postage is required if mailed in the United States.
Stockholders who attend the Annual Meeting may revoke their proxy and vote their
shares in person.

Anne A. Hobson
SECRETARY

BIRMINGHAM UTILITIES, INC.
230 BEAVER STREET
ANSONIA, CONNECTICUT 06401

---------------------
PROXY STATEMENT
---------------------

GENERAL INFORMATION

PROXY SOLICITATION

This proxy statement is furnished to the holders of common stock of
Birmingham Utilities, Inc. (the "Company") in connection with the solicitation
by our Board of Directors of proxies for use at the annual meeting of
stockholders to be held on Wednesday, May 9, 2001, or at any adjournment of the
annual meeting. The purposes of the meeting and the matters to be acted upon are
described in the accompanying Notice of Annual Meeting of Stockholders. The
Board of Directors is not currently aware of any other matters that will come
before the meeting.

Proxies for use at the meeting are being solicited by our Board of
Directors. Proxies will be mailed to stockholders on or about April 5, 2001 and
will be solicited chiefly by mail. We will make arrangements with brokerage
houses and other custodians, nominees and fiduciaries to send proxies and proxy
material to the beneficial owners of the shares and will reimburse them for
their expenses in so doing. Should it appear desirable to do so in order to
ensure adequate representation of shares at the meeting, our officers, agents
and employees may communicate with stockholders, banks, brokerage houses and
others by telephone, e-mail, facsimile, or in person to request that proxies be
furnished. We will pay all expenses incurred in connection with this
solicitation.

REVOCABILITY AND VOTING OF PROXY

A form of proxy for use at the annual meeting and a return envelope for
the proxy are enclosed. Stockholders may revoke the authority granted by their
execution of proxies at any time before their effective exercise by filing with
our Secretary a written notice of revocation or a duly executed proxy bearing a
later date, or by voting in person at the meeting. Shares of common stock
represented by executed and unrevoked proxies will be voted in accordance with
the choice or instructions specified. If no specifications are given, the
proxies intend to vote the shares represented to approve Proposals No. 1, 2 and
3 as described in the accompanying Notice of Annual Meeting of Stockholders and
in accordance with their best judgment on any other matters which may properly
come before the meeting.

RECORD DATE AND VOTING RIGHTS

Only stockholders of record at the close of business on April 2, 2001
are entitled to notice of and to vote at the annual meeting or any adjournment
of the annual meeting. On March 15, 2001 there were 1,623,071 shares of common
stock outstanding; each such share is entitled to one vote on each of the
matters to be presented at the annual meeting. The holders of a majority of the
outstanding shares of common stock, present in person or by proxy, will
constitute a quorum at the annual meeting. Abstentions and broker non-votes will
be counted for purposes of determining the presence or absence of a quorum.
"Broker non-votes" are shares held by brokers or nominees which are present in
person or represented by proxy, but which are not voted on a particular matter
because instructions have not been received from the beneficial owner. Under
Connecticut law, the effect of broker non-votes on a particular matter depends
on whether the matter is one as to which the broker or nominee has discretionary
voting authority under the applicable rule of the American Stock Exchange. The
effect of broker non-votes on the specific items to be brought before the annual
meeting is discussed under each item.

PROPOSAL NO. 1 - ELECTION OF DIRECTORS

The By-laws provide for not less than seven nor more than fifteen
Directors to be elected at the Annual Meeting of Stockholders, each to serve for
the ensuing year and until his or her successor is elected and has qualified.
The Board of Directors currently consists of ten persons. The names of the ten
nominees for election as Directors are set forth below, and the following
information is furnished with respect to them. All nominees except Ms. Klarides
served as Directors in 2000 and were elected by the shareholders. All nominees
have consented to be named and have indicated their intent to serve if elected.
The Board of Directors has no reason to believe that any of the nominees will be
unable to serve or that any vacancy on the Board of Directors will occur. In the
event any of these nominees will be unable to serve as a director, the shares
represented by the proxy will be voted for the person, if any, who is designated
by the Board of Directors to replace the nominee.

The nominees, their ages, the year in which each first became a
director of the Company and their principal occupations or employment during the
past five years are:

Year First Principal Occupation
Nominee Age Became Director During the Past Five Years
------- --- --------------- --------------------------
Michael J. Adanti 60 2000 President, Southern Connecticut
State University since 1984.

Mary Jane Burt 47 2000 Principal, The Laurel Group
(Investment and Business
Consultants) since 1998;
Previously, President, Burt
Medical Lab (1984-1998);
Director, INSITE ONE since 1999.

James E. Cohen 54 1982 Partner at Cohen & Thomas (law
firm) in practice in Derby, CT
since 1971.

-2-

Betsy Henley-Cohn 48 1981 Chairwoman of the Board of
Directors of the Company since
1992; Chairperson/Treasurer,
Joseph Cohn & Sons, Inc.
(construction subcontractors)
since 1979; Director, United
Illuminating Corp. since 1990;
Director, Aristotle Corp. since
1995; Director, Citizens Bank of
Connecticut (1997-1999).

Alvaro da Silva 55 1997 President, DSA Corp. (a
management company) since 1979;
President B.I.D., Inc. (land
development and home building
company); Managing Partner,
Connecticut Commercial Investors,
LLC (a commercial real estate and
investment partnership) since
1976; Director of Great Country
Bank (1991-1995)

Themis Klarides 35 2001 Lawyer in Practice in Shelton
since 1998; State Representative,
114 District Connecticut General
Assembly since 1998.

Aldore J. Rivers 67 1986 Retired; President of the Company
until September 30, 1998

B. Lance Sauerteig 55 1996 Lawyer in Practice in Westport
since 1995; Principal in BLS
Strategic Capital, Inc.
(financial and investment
advisory company) since 1994;
Principal in Tortoise Capital
Partners, LLC (real estate
investments) since 2000;
Director, Offitbank (a New York
based private investment
management company) since 1990.

Kenneth E. Schaible 59 1994 Bank Consultant and Real Estate
Developer; previously, Senior
Vice President, Webster Bank,
1995-1996; President, Shelton
Savings Bank and Shelton
Bancorp., Inc. 1972-1995.

John S. Tomac 47 1999 President of Company since
October 1, 1998; Vice President
of Company December 1,
1997-September 30, 1998;
Treasurer of the Company since
December 1997; Assistant
Controller, BHC Company,
1991-1997.

-3-

INFORMATION REGARDING BOARD OF DIRECTORS

The Board of Directors' Executive Committee consisted of Ms.
Henley-Cohn, Messrs. Tomac, Rivers, Cohen and Sauerteig. That Executive
Committee reviews strategic planning alternatives, recommends to and advises the
Board of Directors on financial policy, issuance of securities and other high
priority issues. The Executive Committee met five times in 2000.

The Board of Directors' Audit Committee consisted of Messrs. Schaible,
da Silva and Ms. Burt, during 2000. The Audit Committee met two times in 2000.
The Audit Committee recommends to the Board of Directors the appointment of our
independent auditors and reviews the degree of their independence; approves the
scope of the audit engagement, including the cost of the audit; reviews any
non-audit services rendered by the auditors and the fees therefor; reviews with
the auditors and management our policies and procedures with respect to internal
accounting and financial controls and, upon completion of an audit, the results
of the audit engagement; and reviews internal accounting and auditing procedures
with our financial staff and the extent to which recommendations made by the
independent auditors have been implemented. All members of the Audit Committee
are independent as defined in the listing standards of the American Stock
Exchange. On June 13, 2000, the Board of Directors adopted an Audit Committee
Charter that meets the requirements of the Securities and Exchange Commission
(the "SEC") and the American Stock Exchange. A copy of the Audit Committee
Charter is attached as Exhibit A to the electronic version of this proxy
statement filed with the SEC.

The Board of Directors' Personnel and Pension Committee consisted of
Messrs. Sauerteig, Rivers, Adanti, Schaible and Ms. Burt and performs the
function of reviewing executive officer compensation and proposing the same to
the full Board of Directors for action. It also proposes to the full Board
overall payroll pool levels and pension plan arrangements for all employees. The
Personnel and Pension Committee met 5 times in 2000.

The Committee on Directors consisted of Messrs. Cohen, Schaible and Ms.
Henley-Cohn. That Committee makes recommendations to the Board of Directors for
Board replacements when they become available and for compensation levels for
the Board of Directors. The committee met one time in 2000. Ms. Henley-Cohn is
Ex-officio on all other Committees. Mr. David Silverstone was a member of the
Executive and Audit committees in 2000, but resigned as a Board member in
December of 2000. Ms. Themis Klarides was elected to fill the unexpired term and
will serve on the Pension and Personnel Committee in 2001.

In 2000, eight meetings of the Board of Directors were held, and all
Directors attended at least 75% of the meetings of the full Board and Committees
on which they served except Mr. da Silva attended four Board of Directors'
meetings and two Audit Committee meetings and Ms. Burt attended four Board of
Directors' meetings and two Personnel and Pension Committee meetings.

-4-

Mr. Cohen is a partner in the law firm of Cohen & Thomas, which has
represented the Company on occasion in past years; the Company may continue to
employ that firm on occasion in the future.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

The Company's Directors, except for Ms. Henley-Cohn, Mr. Tomac and Mr.
Rivers, received an annual fee of $4,000 plus $600 for each full Board meeting
and $400 for each Committee meeting actually attended in 2000. Mr. Rivers
received $30,000 as a consulting fee which included his director and committee
fees.

VOTE REQUIRED

The nominees receiving the affirmative vote of holders of a majority of
the shares of common stock issued, outstanding and entitled to vote, present or
represented at the meeting, a quorum being present, shall be elected as
directors. Broker non-votes with respect to this matter will be treated as
neither a vote "for" or a vote "against" the matter, although they will be
counted in determining if a quorum is present. However, instructions on the
accompanying proxy card to withhold authority to vote for one or more nominees
will be considered in determining the number of votes required to attain a
majority of the shares present or represented at the meeting and entitled to
vote. Accordingly, an instructions to withhold authority by a stockholder
present in person or by proxy at the meeting has the same legal effect as a vote
"against" the nominee because it represents a share present or represented at
the meeting and entitled to vote, thereby increasing the number of affirmative
votes required to approve the nominee.

THE BOARD OF DIRECTORS DEEMS "PROPOSAL NO. 1 - ELECTION OF DIRECTORS"
TO BE IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A
VOTE "FOR" APPROVAL OF THIS PROPOSAL.

EXECUTIVE COMPENSATION

RETIREMENT PLAN

The Company has a noncontributory defined benefit plan which covers
substantially all employees. The benefits are primarily based on years of
service and the employee's compensation. Pension expense includes the
amortization of a net transition obligation over a twenty-three year period. The
Company's funding policy is to make annual contributions in an amount that
approximates what was allowed for rate making purposes consistent with ERISA
funding requirements. Contributions are intended to provide not only for
benefits attributed to service to date, but also for those expected to be earned
in the future.

-5-

EMPLOYMENT CONTRACTS

JOHN S. TOMAC

Effective October 1, 1998, we entered into an employment agreement with
John S. Tomac, our President. The agreement has a three-year term with automatic
three-year extensions upon the first day of each succeeding calendar month to
end three years from each such date of extension unless either party gives
written notice that the agreement will no longer be automatically extended. The
employment agreement terminates upon the death or Mr. Tomac or upon mutual
agreement of the parties. The agreement can be terminated by the Company: (i)
for "cause" (as defined in the employment agreement), (ii) in the event Mr.
Tomac becomes disabled, or (iii) without cause during the first six month period
of each term; provided however, that if Mr. Tomac is terminated without cause
during such term, he is entitled to receive a severance package equal to his
base salary plus benefits for one year from the date of such termination. This
agreement may also be terminated by Mr. Tomac in the event of a Change of
Control (as defined in the employment agreement) of the Company or in the event
Company breaches this agreement.

The employment agreement provides for an annual salary of $100,000
which shall be reviewed by the Board of Directors. In addition, under the
agreement, the Company agrees to provide an automobile for Mr. Tomac and agrees
to pay all expenses in connection with the operation of the vehicle, including
fuel expenses. The Company agrees to reimburse Mr. Tomac for all reasonable
expenses incurred by him in the performance of his duties under this agreement
and also agrees to provide him with an office and secretarial facilities
necessary to perform such duties. Pursuant to the employment agreement, Mr.
Tomac is entitled to four weeks paid vacation, to be taken each year and is also
entitled to participate in any employee welfare and retirement plan or program
of the Company available generally to its employees including hospital, medical
and dental benefits.

According to the employment agreement, the Company agrees to indemnify
Mr. Tomac to the fullest extent possible under Connecticut law against all
costs, charges and expenses whatsoever incurred by him or his legal
representative in connection with any action, suit or proceeding to which he may
be made a party by reason of his being or having been a director, officer or
employee of the Company or his serving or having served any other enterprise as
a director, officer or employee at the request of the Company. In addition. Mr.
Tomac is entitled to the protection of any insurance policies the Company may
elect to maintain generally for the benefit of its directors and officers with
respect to such costs, charges and expenses.

EXECUTIVE OFFICERS: ANNUAL AND LONG-TERM EXECUTIVE COMPENSATION

The following table sets forth the annual and long-term compensation
paid or accrued by the Company to those persons who were the Chief Executive
Officer and the executive officers of the Company at the end of 2000 whose total
annual salary exceeded $100,000 (collectively, the "Named Executive Officers"),
for services rendered by them in all capacities in which they served the Company
during 1998, 1999 and 2000.

-6-

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
------------------- -----------------------------
SECURITIES UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY ($) OPTIONS/SARS (#)
- --------------------------- ---- ---------- ----------------
John S. Tomac, 2000 $109,727 ---
President and Director 1999 $105,098 ---
1998 $89,399 20,000

Betsy Henley-Cohn, 2000 $61,000 ---
Chairwoman of the 1999 $61,000 ---
Board 1998 $52,719 ---
and Chief Executive Officer

No grants of stock options were made during the year ended December 31,
2000 to the named executive officers.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES

SHARES VALUE NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
ACQUIRED ON REALIZED UNDERLYING UNEXERCISED THE-MONEY OPTIONS AT FISCAL
EXERCISE (#) ($) OPTIONS AT FISCAL YEAR-END(#) YEAR-END($)
------------ --- ----------------------------- -----------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------

John. S. Tomac 794 $6,104 11,206 8,000 $140,075 $100,000
Betsy Henley-Cohn 0 -- 0 0 -- --

PERSONNEL AND PENSION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Board of Directors' Personnel and Pension Committee consisted of
Messrs. Sauerteig, Rivers, Adanti and Ms. Burt. Mr. Aldore J. Rivers was the
President of the Company until September 30, 1998.

-7-

PERSONNEL AND PENSION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Board of Directors' Personnel and Pension Committee is comprised of
five independent non-employee directors. As members of the Personnel and Pension
Committee, it is our responsibility to administer the Company's executive
compensation programs, monitor corporate performance and its relationship to
compensation of executive officers, and make appropriate recommendations
concerning matters of executive compensation.

Compensation Policies
- ---------------------

We have formulated a compensation philosophy which is designed to
enable us to attract, retain and reward capable employees who can contribute to
the success of the Company, principally by setting base salaries at the median
of the marketplace. Four key principles serve as the guiding framework for
compensation decisions for all employees of the Company:

o To attract and retain the most highly qualified management and
employee team.

o To pay competitively compared to similar water utility companies.

o To motivate senior executives to achieve the Company 's annual
and long-term business goals by providing equity-based incentive
opportunities.

o To strive for fairness in administration by emphasizing
performance related contributions as the basis of pay decisions.

To implement these policies, we have designed the framework for a
three-part executive compensation program consisting of base salary, long-term
incentive opportunities for senior management, and other employment benefits.

BASE SALARY. We will seek to maintain levels of compensation that are
competitive with similar water utilities companies. The Company's philosophy
regarding base salaries is conservative, and will seek to maintain salaries for
the aggregate officer group at approximately the competitive industry average.
Periodic increases in base salary will relate to individual contributions
evaluated against established objectives, length of service, and the industry's
annual competitive pay practice movement. We have determined that base salary
for 2000 for our former Chief Executive Officer and for the other executive
officers was generally at or below the competitive industry average.

LONG TERM INCENTIVES. We believe that the pay program should provide
executives with an opportunity to increase their ownership and potentially gain
financially from the Company's stock price increases. By this approach, the best
interests of stockholders and executives will be closely aligned. Therefore,
Company executives are eligible to receive stock options, giving them the right

-8-

to purchase shares of common stock at a specified price in the future. We
believe that the use of stock options as the basis for long-term incentive
compensation meets our defined compensation strategy and business needs of the
Company by achieving increased value for stockholders and retaining key
employees.

OTHER BENEFITS. Our philosophy is to provide competitive health- and
welfare-oriented benefits to executives and employees, but to maintain a
conservative posture relative to executive benefits. Consistent with industry
practices, we provide a company automobile to certain executive officers.

Compliance With Section 162(m) of the Internal Revenue Code
- -----------------------------------------------------------

Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to a public corporation for compensation over $1 million paid to a
corporation's chief executive officer and four other most highly compensated
executive officers. Qualifying performance-based compensation will not be
subject to the cap if certain requirements are met. We intend to structure the
compensation of our executive officers in a manner that should ensure that the
Company does not lose any tax deductions because of the $1 million compensation
limit in the foreseeable future.

The salaries for our highest paid executives will be set, based on
independent studies, at levels approximating the average for companies of
comparable size in similar industries and are not expected to approach $1
million in the foreseeable future. We are a proponent of using more performance
and equity-based compensation, which can often be designed to ensure that tax
deductibility is not compromised.

2000 Compensation for the Chief Executive Officer
- -------------------------------------------------

In 2000, Betsy Henley-Cohn received an annual base salary of $61,000.
No option or restricted stock grants were made to Ms. Henley-Cohn in 2000, since
the Committee believed that the stock option grants previously made to Ms.
Henley aligned her interests with those of the stockholders.

Summary
- -------

The Board of Directors' Personnel and Pension Committee believes that
we have implemented a comprehensive compensation program for Company executives
that is appropriate and competitive with the total compensation programs
provided by other similar water utility companies with which we compete. We
believe our compensation philosophy ties compensation to stockholder returns and
thereby links compensation to the achievement of annual and longer-term
operational results of the Company on behalf of our stockholders. We look
forward to providing the stockholders with an update in our next annual report
to you.

Personnel and Pension Committee
of the Board of Directors

-9-

- B. Lance Sauerteig
- Aldore J. Rivers
- Michael J. Adanti
- Kenneth E. Schaible
- Mary Jane Burt

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our
executive officers and directors, and persons who beneficially own more than ten
percent of our common stock, to file initial reports of ownership and reports of
changes in ownership with the SEC and the American Stock Exchange. Executive
officers, directors and greater than ten percent beneficial owners are required
by the SEC to furnish us with copies of all Section 16(a) forms they file.

Based upon a review of the copies of these forms furnished to us and
written representations from our executive officers and directors, we believe
that during fiscal 2000 all Section 16(a) filing requirements applicable to its
executive officers, directors and greater than ten percent beneficial owners
were complied with.

COMPANY PERFORMANCE

The following graph shows the cumulative total stockholder return on
the Company common stock since January 1, 1996, compared to the returns of the
American Stock Exchange Market Value Index, and a peer group consisting of the
reporting companies in SIC Code 4941 - Water Supply Companies.

BIRMINGHAM UTILITIES, INC.
COMPARISON OF CUMULATIVE TOTAL RETURN 1/96-12/00
VS AMERICAN STOCK EXCHANGE MARKET VALUE INDEX
AND SIC 4941 - WATER SUPPLY COMPANIES

STOCK PERFORMANCE

[LINE GRAPH APPEARS HERE]

Assumes $100 invested January 1, 1996 in the Company common stock,
American Stock Exchange Market Value Index and SIC 4941- Water Supply Companies
assumes dividend reinvestment.

12/95 12/96 12/97 12/98 12/99 12/00
- -------------------------- -------- -------- -------- -------- -------- --------
THE COMPANY $100 100.10 162.80 275.84 510.74 287.87
- -------------------------- -------- -------- -------- -------- -------- --------
WATER SUPPLY $100 121.35 163.45 204.95 203.41 246.48
- -------------------------- -------- -------- -------- -------- -------- --------
AMEX MARKET INDEX $100 105.52 126.97 125.25 156.15 154.23
- -------------------------- -------- -------- -------- -------- -------- --------

-10-

STOCK OWNERSHIP

PRINCIPAL STOCKHOLDERS

The following tables set forth information as of March 15, 2001 with
respect to the only persons known to us to be the beneficial owners (for
purposes of the rules of the SEC) of more than 5% of the outstanding shares of
our common stock as of that date.

NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNERS BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ----------------- -------------------- ----------------
Group consisting of Cohn Realty &
Investment, Betsy Henley-Cohn, William
Swift as custodian for Jesse 224,524 12.1%
Henley-Cohn, Betsy Cohn Spray Trust and
Betsy Cohn Income Trust, 80 Hamilton
Street, New Haven, Connecticut 06511

(1) Of the 224,524 shares owned by this Group, Betsy Henley-Cohn owns 20,000
shares, Cohn Realty & Investment (a Connecticut general partnership consisting
of three investment trusts whose managing agent is Betsy Henley-Cohn, whose
beneficiaries are certain members of the Cohn Family and whose Trustees are
Rhoda Cohn and Stanley Bergman) has beneficial ownership of 72,000 shares;
William Swift, as custodian for Jesse Henley-Cohn, has beneficial ownership of
45,028 shares; Betsy Cohn Spray Trust has beneficial ownership of 65,376 shares;
Betsy Cohn Income Trust has beneficial ownership of 22,120 shares; Betsy
Henley-Cohn has either a controlling or a beneficial interest in Cohn Realty &
Investment, Betsy Cohn Spray Trust and Betsy Cohn Income Trust. No member of the
Group owns or has the right to acquire, directly or indirectly, any other
shares. Unless otherwise indicated, the named beneficial owner of the shares has
sole voting and dispositive power with respect thereto. The information set
forth in this footnote is derived from filings with the Securities and Exchange
Commission made by the Group and from other information available to the
Company.

The following table sets forth certain information concerning ownership
of the Company's shares by the Company's officers and directors.

-11-

Common Shares Beneficially
Name Owned As of March 15, 2001(1) Percent of Class (2)
- -------------------------- ----------------------------- --------------------
Michael J. Adanti 4,650 *

Mary Jane Burt 2,000 *

James E. Cohen 77,596 (3) 4.75%

Betsy Henley-Cohn 224,524 (4) 12.1%

Alvaro da Silva. 12,400 *

Themis Klarides 200 *

Aldore J. Rivers 14,312 *

B. Lance Sauerteig 10,400 *

Kenneth E. Schaible 12,960 *

John S. Tomac 20,000 1.21%

Executive Officers, Directors 378,842 22.44%
and Nominees as a group, 10 in
number
- --------------------------------------------------------------------------------
* Less than 1%

(1) Includes options to purchase shares of common stock exercisable within
60 days of April 2, 2000, the record date for the Company's 2001 Annual
Meeting of Stockholders (the "Record Date"), as follows: Mr. Cohen, 10,000;
Mr. da Silva, 10,000 plus 2,000 shared voting; Mr. Rivers, 6,312; Mr.
Sauerteig, 10,000; Mr. Schaible, 10,000 and Mr. Tomac 19,206.

(2) For the purpose of calculating the percentage of common stock
beneficially owned (a) by the individual persons listed in the table, the
number of options held by such person is included in both the number of
shares beneficially owned by the person and in the total number of shares
outstanding in the class with respect to the individual person's percentage
calculation, and (b) by the directors and officers as a group, the total
number of shares beneficially owned by the group and the total number of
shares outstanding includes the 65,518 shares issuable upon the exercise of
options exercisable by all persons in the group within 60 days of the
Record Date.

(3) Includes 64,196 shares held by Mr. Cohen as Trustee for the David B.
Cohen Family Trust, and 3,400 shares held in a brokerage custodial account
for Mr. Cohen's benefit.

(4) Ms. Henley-Cohn is a member of the shareholder group described in the
preceding table. The 224,524 shares set forth in this table is the
aggregate number of shares held by all of the members of the group. See
note (1) to the preceding table for information concerning shares
beneficially held by Ms. Henley-Cohn.

-12-

PROPOSAL NO. 2 - APPROVAL OF THE BIRMINGHAM UTILITIES, INC. STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS

The Board of Directors recommends that the shareholders approve the
Birmingham Utilities, Inc. Stock Option Plan for Non-Employee Directors (the
"Director Plan"). The Director Plan was adopted by the Board of Directors on
September 6, 2000, subject to approval by the shareholders of the Company at the
Annual Meeting in May 2001 and by the Department of Public Utility Control
("DPUC"). The Director Plan will facilitate the acquisition of Company common
stock by non-employee directors and enhance the Company's ability to attract and
retain qualified, experienced directors. The Company believes that increased
share ownership of directors more closely aligns shareholder and director
interests by encouraging a greater focus on profitability of the Company and the
performance of its common stock. The text of the Director Plan appears in
Exhibit B to the electronic version of this Proxy Statement filed with the SEC.
The summary of its principal features which follows is subject to the specific
provisions contained in the full text. Proxies solicited hereby will be voted
for the adoption of the Director Plan unless the shareholder specifies
otherwise.

The Company will shortly request the DPUC's approval of the Director
Plan. Although no assurances can be given, the Company is aware of no reason why
the DPUC should not approve the Director Plan.

SUMMARY OF THE PLAN

SHARES SUBJECT TO OPTIONS. The Director Plan covers the maximum of
60,000 shares or 3.70% of the 1,623,071 total shares currently outstanding of
the Company's common stock (subject to adjustment for stock splits or similar
capitalization changes) pursuant to which non-employee directors of the Company
are eligible to receive stock options that do not qualify as incentive options
("non-qualified options"). The Director Plan is administered by the Personnel
and Pension Committee of the Board of Directors. The purpose of the Director
Plan is to promote the interests of the Company and its shareholders by
encouraging non-employee directors of the Company to have a direct and personal
stake in the performance of the Company's common stock and the criteria to be
utilized by the Personnel and Pension Committee in granting options pursuant to
the Director Plan will be consistent with these purposes. There are currently 8
directors eligible to receive grants under the Director Plan.

ELIGIBILITY AND ADMINISTRATION. Only non-employee directors of the
Company who became directors after December 31, 1999 are eligible to receive
options under the Director Plan. It is expected that three directors will be
eligible to participate during the first year of the Director Plan. The Director
Plan will be administered by the Committee. No director may participate in any
decision relating exclusively to an option granted to that director.

STOCK OPTIONS. The Director Plan provides that, on September 6, 2000,
each non-employee director of the Company was granted (subject to approval of
the Director Plan by the shareholders of the Company and the DPUC) an option to
purchase 2,500 shares of common stock. Commencing on August 1, 2001 and on each
August 1st thereafter during the term of the Director Plan, each non-employee
director of the Company shall automatically be granted an option to purchase
2,500 shares of the Company's common stock. Notwithstanding the above

-13-

formula, no non-employee director shall receive options under the Director Plan
to purchase more than an aggregate amount of 10,000 shares of common stock. The
exercise price for each option will be the greater of the fair market value of
the Company's common stock on the date of grant or the par value of the common
stock, if any, on the date of exercise. The Company's common stock currently has
no par value. Options will be exercisable in full following two years from their
grant date and shall expire ten years from the grant date. However, options
become immediately exercisable in full upon the director's withdrawal from the
Board of Directors due to death, disability or retirement as defined in the
Director Plan. Payment of the exercise price may be made in cash, previously
acquired shares of common stock equal in value to the exercise price or a
combination of cash and common stock. All unexercised options terminate three
months after the date a grantee leaves the Board of directors, provided that
such awards may be exercised during certain longer periods contained in the
Director Plan following the grantee's death, disability or retirement.

DURATION. The term during which awards may be granted under the
Director Plan will expire September 6, 2010.

TRANSFER OF OPTIONS. Options granted under the Director Plan are not
transferable except upon the death of the director or pursuant to a qualified
domestic relations order, and are exercisable during the director's lifetime
only by the director or his or her guardian or legal representative.

AMENDMENT AND DISCONTINUANCE. The Board of Directors may discontinue or
amend the Director Plan at any time. However, without shareholder approval, the
Board of Directors may not amend the Director Plan to increase the number of
shares of common stock as to which options may be granted under the Director
Plan, modify the requirements for participation in the Director Plan, extend the
term of the Director Plan or the options periods provided therein, or decrease
the option price or otherwise materially increase the benefits under the
Director Plan. The Director Plan may not be amended more often than once every
six months except to comply with changes in tax laws.

FEDERAL INCOME TAX CONSEQUENCES

Under current tax law, there are no Federal income tax consequences to
either the director or the Company on the grant of non-qualified options if
granted under the terms set forth in the Plan. Upon exercise of a non-qualified
option, the excess of the fair market value of the shares subject to the option
over the option price (the "Spread") at the date of exercise is taxable as
ordinary income to the optionee in the year it is exercised and is deductible by
the Company as compensation for Federal income tax purposes, if Federal income
tax is withheld on the Spread. However, if the shares are subject to vesting
restrictions conditioned on future employment or the holder is subject to the
short-swing profits liability restrictions of Section 16(b) of the Exchange Act
(i.e., is an executive officer, director or 10% stockholder of the Company),
then taxation and measurement of the Spread is deferred until such restrictions
lapse, unless a special election is made under Section 83(b) of the Code to
report that income currently

-14-

without regard to the restrictions. The optionee's basis in the shares will be
equal to the fair market value on the date taxation is imposed and the holding
period commences on that date.

At the time of sale of shares received upon exercise of an option, any
gain or loss is long-term or short-term capital gain or loss, depending upon the
holding period. The holding period for long-term capital gain or loss treatment
is more than one year.

The foregoing is not intended to be an exhaustive analysis of the tax
consequences relating to stock options issued under the Director Plan. For
instance, the treatment of options under state and local tax laws, which is not
described above, may differ from the treatment for Federal income tax purposes.

VOTE REQUIRED

The affirmative vote of holders of a majority of the shares of common
stock issued, outstanding and entitled to vote, present or represented at the
meeting, a quorum being present, is required for the adoption of this proposal.
Broker non-votes with respect to this matter will be treated as neither a vote
"for" or a vote "against" the matter, although they will be counted in
determining if a quorum is present. However, abstentions will be considered in
determining the number of votes required to attain a majority of the shares
present or represented at the meeting and entitled to vote. Accordingly, an
abstention from voting by a stockholder present in person or by proxy at the
meeting has the same legal effect as a vote "against" the matter because it
represents a share present or represented at the meeting and entitled to vote,
thereby increasing the number of affirmative votes required to approve this
proposal.

THE BOARD OF DIRECTORS DEEMS "PROPOSAL NO. 2 - APPROVAL OF THE BIRMINGHAM
UTILITIES, INC. STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS" TO BE IN THE BEST
INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR"
APPROVAL OF THIS PROPOSAL.

PROPOSAL NO. 3 - RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

Our Board of Directors has selected Dworken, Hillman, LaMorte &
Sterczala, P.C. as our independent auditors for the year ending December 31,
2001, and has directed that management submit the selection of independent
auditors for ratification by stockholders at the annual meeting. Representatives
of Dworken, Hillman, LaMorte & Sterczala, P.C. will be present at the Annual
Meeting to respond to questions of shareholders, but, although they have been
offered the opportunity to do so, they do not otherwise propose to make any
statement.

Stockholder ratification of the selection of Dworken, Hillman, LaMorte
& Sterczala, P.C. as our independent auditors is not required by our Bylaws or
otherwise. However, the Board is submitting the selection of Dworken, Hillman,
LaMorte & Sterczala, P.C. to the stockholders for ratification as a matter of
good corporate practice. If the stockholders fail to ratify the selection,

-15-

the Board will reconsider whether or not to retain that firm. Even if the
selection were ratified, the Board in its discretion may direct the appointment
of a different independent accounting firm at any time during the year if the
Board determines that such a change would be in the best interests of the
Company and its stockholders.

VOTE REQUIRED

THE BOARD OF DIRECTORS DEEMS "PROPOSAL NO. 3 - RATIFICATION OF SELECTION OF
INDEPENDENT AUDITORS" TO BE IN THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL OF THIS PROPOSAL.

AUDITOR MATTERS

REPORT OF THE AUDIT COMMITTEE

The Audit Committee reviews The Company's financial reporting process
on behalf of the Board of Directors. Management has the primary responsibility
for the financial statements and the reporting process. The Company's
independent auditors are responsible for expressing an opinion on the conformity
of our audited financial statements to generally accepted accounting principles.

In this context, the Audit Committee has reviewed and discussed with
management and the independent auditors the audited financial statements for the
fiscal year ended December 31, 2000. The Audit Committee has discussed with the
independent auditors the matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication with Audit Committees). In addition,
the Audit Committee has received from the independent auditors the written
disclosures required by Independence Standards Board No. 1 (Independence
Discussions with Audit Committees) and discussed with them their independence
from the Company and its management. The Audit Committee has also considered
whether the independent auditors provision of information technology services
and other non-audit services to the Company is compatible with the auditor's
independence.

-16-

In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board has approved,
that the audited financial statements for the fiscal year ended December 31,
2000 be included for filing in the Company's annual report on SEC Form 10-K for
the year ended December 31, 2000.

Audit Committee of the Board of Directors

- Kenneth E. Schaible
- Alvaro da Silva
- Mary Jane Burt

AUDIT FEES

The aggregate fees billed to the Company by our auditors Dworken,
Hillman, LaMorte & Sterczala, P.C. for professional services rendered in
connection with the audit of our annual financial statements for the 2000 fiscal
year and the reviews of the interim financial statements included in our 10-Qs
were $56,000.

ALL OTHER FEES

The aggregate fees billed to the Company for professional services
rendered in 2000 by our auditors Dworken, Hillman, LaMorte & Sterczala, P.C.,
other than for services specifically described above, were $10,320.

CERTAIN TRANSACTIONS

Mr. Cohen is a partner in the law firm of Cohen & Thomas, which has
represented the Company on occasions in past years; the Company may continue to
employ that firm on occasion in the future.

STOCKHOLDER PROPOSALS

All stockholder proposals which are intended to be presented at the
2002 annual meeting of stockholders must be received by us no later than
December 6, 2001 for inclusion in the Company's proxy statement and form of
proxy relating to that meeting.

OTHER BUSINESS

The Board of Directors knows of no other business to be acted upon at
the annual meeting. However, if any other business properly comes before the
annual meeting, it is the intention of the persons named in the enclosed proxy
to vote on such matters in accordance with their best judgment.

-17-

Our annual report, including financial statements, for the year 2000 is
enclosed with this proxy mailing but is not a part of the proxy soliciting
material. The prompt return of your proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend the
annual meeting, please sign the proxy and return it in the enclosed envelope.

By Order of the Board of Directors

ANNE A. HOBSON
SECRETARY

Dated: April 5, 2001

-18-

EXHIBIT A
AUDIT COMMITTEE CHARTER
BIRMINGHAM UTILITIES, INC.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

CHARTER

I. PURPOSE

The primary function of the Audit Committee is to assist the
Board of Directors in fulfilling its oversight responsibilities by
reviewing: the integrity of the financial reports and other financial
information provided by the Corporation to any governmental body or the
public; the Corporation's systems of internal controls regarding
finance, accounting, legal compliance and ethics that management and
the Board have established; and the corporation's auditing, accounting
and financial reporting processes generally. Consistent with this
function, the Audit committee should encourage continuous improvement
of, and should foster adherence to, the corporation's policies,
procedures and practices at all levels. The Audit committee's primary
duties and responsibilities are to:

o Serve as an independent and objective party to monitor the
Corporation's financial reporting process and internal control
system.

o Review and appraise the audit efforts of the Corporation's
independent accountants.

o Provide an open avenue of communication among the independent
accountants, financial and senior management and the Board of
Directors.

The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities enumerated in Section IV of this Charter.
While the Audit Committee has the responsibilities and powers set forth
in Section IV, it is not the duty of the Audit

-19-

Committee to plan or conduct audits or to determine that the Company's
financial statements are complete and accurate and are in accordance
with generally accepted accounting principles. This is the
responsibility of management and the independent auditor. Nor is it the
duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent auditor
or to assure compliance with laws and regulations and the Company's
Code of Conduct.

II COMPOSITION

The Audit Committee shall be comprised of three or more
directors as determined by the Board, each of whom shall be independent
directors, and free from any relationship that, in the opinion of the
board, would interfere with the exercise of his or her independent
judgment as a member of the Committee. Directors with any of the
following five relationships will not be considered independent: (1)
employment by the corporation for the current year or any of the past
three years; (2) acceptance of any compensation from the corporation in
excess of $60,000 during the previous fiscal year, other than
compensation for board service, benefits under a tax-qualified
retirement plan, or non-discretionary compensation; (3) member of the
immediate family of an individual who is, or has been in any of the
past three years, employed by the corporation as an executive officer;
(4) partnership in, or a controlling shareholder or an executive
officer of, any for-profit business organization to which the
corporation made, or from which the corporation received, payments
(other than those arising solely from investments in the corporation's
securities) that exceed five percent of the corporation's or business
organization's consolidated gross revenues for that year, or $200,000,
whichever is more, in any of the past three years; or (5) employment as
an executive of another entity where any of the company's executives
serve on that entity's compensation committee. All members of the
Committee shall have a working familiarity with basic finance and
accounting practices and be able to read and understand fundamental
financial statements including the Corporation's balance sheet,
shareholders' equity statement, income statement and cash flow
statement. At least one

-20-

member of the Committee shall have accounting or related financial
management expertise which includes accounting experience in finance
and accounting requisite professional certification in accounting or
other comparable experience or background which results in financial
sophistication including past employment being or having been a chief
executive officer, chief financial officer or other senior official
with financial oversight responsibilities. Committee members may
enhance their familiarity with finance and accounting by participating
in educational programs conducted by the Corporation or an outside
consultant.

The members of the Committee shall be elected by the Board at the
annual organizational meeting of the board or until their successors
shall be duly elected and qualified. Unless a Chair is elected by the
full Board, the members of the Committee may designate a Chair by
majority vote of the full Committee membership.

III MEETINGS

The Committee shall meet at least four times annually, or more
frequently as circumstances dictate. As part of its job to foster open
communication, the committee should meet at least annually with
management and the independent accountants in separate executive
sessions to discuss any matters that the Committee or each of these
groups believe should be discussed privately. In addition, the
Committee shall meet with the independent accountants and management
quarterly to review the Corporation financials consistent with IV.3.
below.

IV RESPONSIBILITIES AND DUTIES

To fulfill its responsibilities and duties the Audit committee shall:

Documents/Reports Review:
-------------------------

1. Review and update this charter periodically, at least
annually, as conditions dictate.

-21-

2. Review and discuss with management and the independent
accountants, the Corporation's annual financial statements and
any reports or other financial information submitted to any
governmental body, or the public, including any certification,
report, opinion, or review rendered by the independent
accountants.

3. Review the 10-Q prior to its filing or prior to the release of
earnings.

4. Obtain from the independent auditor assurance that Section 10A
of the Securities Exchange Act of 1934 has not been
implicated.

Independent Accountants:
------------------------

5. Recommend to the Board of Directors the selection of the
independent accountants, considering independence and
effectiveness and approve the fees and other compensation to
be paid to the independent accountants. On an annual basis,
the Committee should obtain a formal written statement
delineating all relationships between the independent
accountants and the Corporation and review and discuss with
the accountants all significant relationships the accountants
have with the Corporation to determine the accountants'
independence.

6. Meet with the independent auditor prior to the audit to review
the planning and staffing of the audit.

7. Review the performance of the independent accountants and
approve any proposed discharge of the independent accountants
when circumstances warrant.

8. Periodically consult with the independent accountants out of
the presence of management about internal controls and the
fullness and accuracy of the organization's financial
statements. Discussions should include significant accounting
policies, management's judgments and accounting estimates and
significant audit adjustments.

-22-

Financial Reporting Processes:
-----------------------------

9. In consultation with the independent accountants and the
internal auditors, review the integrity of the organization's
financial reporting processes, both internal and external.

10. Consider the independent accountants' judgments about the
quality and appropriateness of the Corporation's accounting
principles as applied in its financial reporting. Discussions
should include: (1) methods used to account for significant
unusual transactions; (2) the effect of significant accounting
policies in controversial or emerging areas for which there is
a lack of authoritative guidance or consensus; (3) the process
used by management in formulating particularly sensitive
accounting estimates and the basis for the auditor's
conclusions regarding the reasonableness of those estimates;
and (4) disagreements with management over the application of
accounting principles, the basis for management's accounting
estimates, and the disclosures in the financial statements.

11. Consider and approve, if appropriate, major changes to the
Corporation's auditing and accounting principles and practices
as suggested by the independent accountants and management.

12. Review the significant reports to management prepared by the
internal auditing department and management's responses.

-23-

Process Improvement:
--------------------

13. Establish regular and separate systems of reporting to the
Audit committee by each of management and the independent
accountants regarding any significant judgments made in
management's preparation of the financial statements and the
view of each as to appropriateness of such judgments.

14. Following completion of the annual audit, review separately
with each of management, the independent accountants and the
internal auditing department any significant difficulties
encountered during the course of the audit, including any
restrictions on the scope of work or access to required
information.

15. Review any significant disagreement among management and the
independent accountants in connection with the preparation of
the financial statements.

16. Review with the independent accountants and management the
extent to which changes or improvements in financial or
accounting practices, as approved by the Audit committee, have
been implemented. (This review should be conducted at an
appropriate time subsequent to implementation of changes or
improvements, as described by the Committee.)

17. Review the appointment and replacement of the senior internal
auditing executive.

-24-

Ethical and Legal Compliance:
-----------------------------

18. Establish, review and update periodically a Code of Ethical
Conduct and ensure that management has established a system to
enforce this Code.

19. Review management's monitoring of the Corporation's compliance
with the organization's Ethical Code, and ensure that
management has the proper review system in place to ensure
that Corporation's financial statements, reports and other
financial information disseminated to governmental
organizations, and the public satisfy legal requirements.

20. Review, with the Corporation's counsel, legal compliance
matters including corporate securities trading policies.

21. Review, with the Corporation's counsel, any legal matter that
could have a significant impact on the organization's
financial statements.

22. Perform any other activities consistent with this Charter, the
Corporation's By-laws and governing law, as the Committee or
the Board deems necessary and appropriate.

-25-

EXHIBIT B

STOCK OPTION PLAN
BIRMINGHAM UTILITIES, INC.
FOR NON-EMPLOYEE DIRECTORS

1. Purpose.

The purpose of the Birmingham Utilities, Inc. Stock Option Plan for
Non-Employee Directors (the "Plan") is to promote the interests of
Birmingham Utilities, Inc. (the "Company') and its shareholders by
encouraging Non-Employee Directors of the Company to have a direct and
personal stake in the performance of the Company's Common Stock.

2. Definitions.

Unless the context clearly indicates otherwise, the following terms
have the meanings set forth below. Whenever applicable, the masculine
pronoun shall include the feminine pronoun and the singular shall
include the plural.

"Board of Directors" or "Board" means the Board of Directors of the
Company.

"Business Day" shall mean any day except Saturday, Sunday or a legal
holiday in the State of Connecticut.

"Code" means the Internal Revenue Code of 1986, as amended, now in
effect or as amended from time to time and any successor provisions
thereto.

"Committee" means the Personnel and Pension Committee of three or more
members appointed by the Board of directors and selected from those
directors who are not employees of the corporation, its parent or any
Subsidiary, as defined in Section 424(e) and (f) of the code. The Board
may at any time and from time to time remove any member of the
Committee, with or without cause, appoint additional members to the
Committee and fill vacancies, however caused, in the Committee. A
majority of the members of the committee shall constitute a quorum. All
determinations of the Committee shall be made by a majority of its
members. Any decision or determination of the Committee reduced to
writing and signed by all of the members of the Committee shall be
fully as effective as if it had been made at a meeting duly called and
held.

"Common Stock" means the common stock, without par value, of the
Company.

"Company" means Birmingham Utilities, Inc., a Connecticut corporation.

-26-

"Disability", as applied to a Grantee, shall have the meaning set forth
in Section 22(e)(3) of the Code.

"Fair Market Value" of a share of Common Stock on any particular date
is the average of the high and low sales price of a share of Common
Stock on the American Stock Exchange (or any exchange on which the
common Stock is then traded) as reported for that date by AMEX or, if
no sales price is reported for that date, the average bid quotation for
the Common Stock on that date as reported by AMEX; provided, however,
that if no such sales or quotation are reported by AMEX for such date,
the Fair Market Value of a share of Common Stock on such date shall be
the average of the high and low sales price or, if no sales price is
reported for that date, the average bid quotation as reported by AMEX
for the first Business Day immediately after such date on which such
sales or quotation are reported.

"Grant Date", as used with respect to a particular Option, means the
date on which such Option is granted pursuant to the Plan.

"Grantee" means the Non-Employee Director to whom an Option is granted
pursuant to the Plan.

"Option" means an option granted pursuant to the Plan to purchase
shares of common Stock, which shall be a non-qualified stock option,
not intended to qualify as incentive stock options under Section 422 of
the Code.

"Non-Employee Director" shall mean a member of the Board of Directors
who is not an employee of the company or any Subsidiary.

"Plan" means the Birmingham Utilities, Inc. Stock Option Plan for
Non-Employee Directors as set forth herein and as amended from time to
time.

"Retirement" as applied to a Non-Employee director, shall mean when a
Grantee ceases to serve as a member of the Board following attaining
seventy (70) years of age.

"Subsidiary" shall mean a "subsidiary corporation" of the company as
defined in Section 425(f) of the Code.

"The 1934 Act" means the Securities Exchange Act of 1934, as amended,
now in effect or as amended from time to time and any successor
provisions thereto.

3. Administration.

(a) General. The Plan shall be administered by the Committee, which
shall have full power and authority, subject to the provisions of the
Plan, to supervise administration of

-27-

the Plan and interpret the provisions of the Plan and any Options
granted hereunder. Any decision by the Committee shall be final and
binding on all parties. No member of the Committee shall be liable for
any determination, decision or action made in good faith with respect
to the Plan or any Options under the Plan. The committee may delegate
any of such responsibilities to one or more agents and may retain
advisors to advise it. No Grantee shall participate in the decision of
any questions relating exclusively to an Option granted to that
Grantee.

(b) Rules and Interpretation. The Committee shall be vested with full
authority to make such rules and regulations, as it deems necessary to
administer the Plan and to interpret and administer the provisions of
the Plan in a uniform manner. Any determination, decision or action of
the Committee in Connecticut with the construction, interpretation,
administration or application of the Plan shall be final, conclusive
and binding on all parties. The Committee's administrative functions
shall be ministerial in nature in view of the Plan's explicit
provisions including those related to eligibility for, timing, price
and amount of Option grants.

4. Eligibility.

The persons eligible to receive Options under the Plan are the
Non-Employee Directors of the Company.

5. Effective Date of the Plan and Term of Option Period.

The plan shall become effective upon its adoption by the Board
of Directors, provided, that no Option granted pursuant to the Plan
shall be exercised or will vest prior to (1) the approval of the Plan
by the Company's shareholders within twelve (12) months of its adoption
by the Board, and (32) the approval of the Plan by the Connecticut
Department of Public Utility Control. The term during which awards may
be granted under the Plan shall expire on the tenth anniversary of the
adoption of the Plan by the Board of Directors. Subject to the
provisions of Article 12 hereof, the period during which an Option
granted under the Plan may be exercised shall expire on the tenth
anniversary of the Grant Date of the Option.

6. Shares Subject to the Plan.

The shares of common Stock that may be delivered upon the
exercise of Options under the Plan shall be shares of the Company's
authorized common Stock and may be unissued shares or reacquired
shares, as the Board of directors may from time to time determine.
Subject to adjustment as provided in Article 13 hereof, the aggregate
number of shares to be delivered under the Plan shall not exceed 60,000
shares. If any shares are subject to an Option which for any reason
expires or terminates during the term of the Plan prior to the issuance
of such shares, the shares subject to but not delivered under such
Option shall be available for issuance under the Plan. If, on any

-28-

Grant Date, the aggregate number of shares of common Stock subject to
Option grants on that date exceeds the remaining number of shares of
Common Stock subject to Option grants on that date exceeds the
remaining number of shares reserved for issuance under the Plan, the
number of Option shares awarded to each Non-Employee Director to whom
Options shall be granted on such date shall be reduced pro rata so that
the aggregate number of Option shares awarded to such Non-Employee
Directors equals the number of reserved shares of Common Stock
remaining under the Plan.

7. Options.

(a)Grant of Options. On September 6, 2000, each Non-Employee Director
of the Company who became a Director after December 31, 1999, shall
be granted an Option, upon the terms and conditions specified in the
Plan, to purchase 2,500 shares of common Stock. Commencing on August
1, 2001 and on each August 1st thereafter (or, if August 1st is not
a Business Day, the first preceding Business Day) during the term of
the Plan, each Non-Employee director of the company shall
automatically be granted a stock option to purchase 2,500 shares of
common Stock upon the terms and conditions specified in the Plan.
Notwithstanding the foregoing provisions of this paragraph, no
Non-Employee Director shall receive Options under the Plan to
purchase more than an aggregate amount of 10,000 shares of Common
Stock.

(b)Terms of Options. Each Option granted under the Plan shall have the
following terms and conditions:

(i) Price. The exercise price per share of each Option shall equal
the greater of the Fair Market Value of a share of common Stock
on the Grant Date or the par value per share of the Common Stock,
if any, on the date of exercise of such option;

(ii) Term. The term of each Option shall be for a period of ten (10)
years from the Grant Date unless terminated earlier in accordance
with the Plan;

(iii) Time of Exercise. Unless an Option is terminated or the time of
its exercisability is accelerated in accordance with the Plan,
each Option shall be exercisable only to the extent of one-half
of the number of shares of the Common Stock to which it relates
on or after the first anniversary of its Grant Date and shall be
exercisable to the extent of the remaining one-half of such
shares only on or after the second anniversary of the Grant Date,
so that the Options shall be exercisable in full only on or after
the second anniversary of the Grant Date.

(iv) Acceleration of Exercisability. Notwithstanding the schedule
provided in subparagraph (iii) hereof, an Option shall become
fully exercisable on\\upon the occurrence of the Grantee's death
or withdrawal from the Board of Directors by reason of such
Non-Employee Director's Disability or Retirement; and

-29-

(v) Option Agreement. Each Option shall be evidenced by an Option
Agreement substantially in the form attached to this Plan as
Appendix A.

8. Exercise of Options.

(a) Each Option granted shall be exercisable in whole or in part at any
time, or from time to time, during the Option term as specified in the
Plan, provided that the election to exercise an Option shall be made in
accordance with applicable Federal laws and regulations. Each Option
may be exercised by delivery of a written notice to the company stating
the number of shares to be exercised and accompanied by the payment of
the Option exercise price therefore in accordance with this Article.
The Grantee shall furnish the Company, prior to the delivery of any
shares upon the exercise of an Option with such other documents and
representations as the Company may require, to assure compliance with
applicable laws and regulations.

(b) No Option may at any time be exercised with respect to a fractional
share. In the event that shares are issued pursuant to the exercise of
an Option, no fractional shares shall be issued and cash equal to the
Fair Market Value of such fractional share on the date of the delivery
of the exercise notice shall be given in lieu of such fractional
shares.

(c) No shares shall be delivered pursuant to the exercise of any
Option, in whole or in part, until qualified for delivery under such
securities laws and regulations as the Board of Directors may deem to
be applicable thereto and until payment in full of the Option price is
received by the Company in cash, by check or in shares of Common Stock
as provided in Article 9 hereof. Neither the holder of an Option nor
such holder's legal representative, legatee, or distributee shall be or
be deemed to be a holder of any shares subject to such Option unless
and until a certificate or certificates therefore is issued in his or
her name or a person designated by him or her.

9. Stock as Form of Exercise Payment.

A grantee who owns shares of common Stock may elect to use the
previously acquired shares, valued at the Fair Market Value on the last
Business Day preceding the date of delivery of such shares, to pay all
or part of the exercise price of an Option, provided, however, that
such form of payment shall not be permitted unless at least one hundred
shares of such previously acquired shares are required and delivered
for such purpose and the shares delivered have been held by the Grantee
for at least six months.

10. Withholding Taxes for Awards.

Each Grantee exercising an Option as a condition to such
exercise shall pay to the Company the amount, if any, required to be
withheld from distributions resulting from such exercise under
applicable Federal and State income tax laws ("Withholding Taxes").
Such

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Withholding Taxes shall be payable as of the date income from the award
is includable in the Grantee's gross income for Federal income tax
purposes (the "Tax Date"). The Grantee may satisfy this requirement by
remitting to the Company in cash or by check the amount of such
Withholding Taxes or a number of previously owned shares of common
Stock having an aggregate Fair Market Value last of the last Business
Day preceding the Tax Date equal to the amount of such Withholding
Taxes.

11. Transfer of Awards.

Options granted under the Plan may not be transferred except
by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order, as defined in the Code, and, during
the Grantee's lifetime, may be exercised only by said Grantee or by
said Grantee's guardian or legal representative, provided, however,
that if Rule 16b-3 under the 1934 Act is amended to permit restricted
or unrestricted transfers of derivative securities granted under plans
intended to qualify for the exemption provided by such rule, then if
permitted in accordance with such transferability restrictions imposed
by Rule 16b-3 if any, as so amended, the options heretofore and
hereafter granted under the Plan shall be transferable without payment
of consideration, to immediate family members of the Grantee or to
trusts or partnerships for such immediate family members.

12. Death, Disability, Retirement and Termination of Director Status.

(a) An Option which has not theretofore expired shall
terminate at the time of the death of the Grantee or if
the Grantee ceases to be a member of the Board, and no
shares may thereafter be delivered pursuant to such
Option, except that, subject to the condition that no
Option may be exercised in whole or in part after the
tenth anniversary of its Grant Date;

(i) Upon termination of board membership of any such Grantee due to
Disability or Retirement, the Grantee may, within a period of three
years after the date of such termination, purchase some or all of the
shares covered by the Grantee's Options which were exercisable
immediately prior to such termination; and

(ii) Upon termination of Board membership of any such Grantee due to
any reason other than the Grantee's death, Disability or Retirement,
the Grantee may, within three months after the date of such
termination, purchase some or all of the shares covered by the
Grantee's Options which were exercisable immediately prior to such
termination, provided that, notwithstanding the foregoing, the Options
of a Grantee shall automatically terminate as of the date his or her
directorship is terminated, if terminated on account of any act of (a)
fraud or intentional misrepresentation, or (b) embezzlement,
misappropriation or conversion of assets or opportunities of the
Company or an Subsidiary; and

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(iii) Upon the death of any such Grantee while serving on the Board or
of any such disabled or retired Grantee within the above-referenced
period, the person or persons to whom the rights under the Option are
transferred by will or the laws of descent and distribution may, within
twelve months after the date of the Grantee's death, exercise some or
all of the Grantee's Options which were exercisable on the date of
death by the Grantee.

13. Change of Ownership.

In the event of (a) a dissolution or liquidation of the
Company, (b) a merger or consolidation in which the Company is not the
surviving corporation, or (c) any other capital reorganization in which
more than fifty percent (50%) of the shares of the Company entitled to
vote are exchanged, the Company s hall give to each Non-Employee
Director, at the time of adoption of the plan for liquidation,
dissolution, merger, consolidation or reorganization, either (i) a
reasonable time thereafter within which to exercise the Option, prior
to the effectiveness of such liquidation, dissolution, merger,
consolidation or reorganization, at the end of which time the Option
shall terminate, or (ii) the right to exercise the Option (or a
substitute Option) as to an equivalent number of shares of stock of the
corporation succeeding the Company or acquiring its business by reason
of such liquidation, dissolution, merger, consolidation or
reorganization.

14. Adjustment Upon Changes in Capitalization.

(a) Changes in Capitalization. If the number of shares of
Common Stock of the Company as a whole are increased,
decreased or changed into, or exchanged for, a different
number or kind of shares or securities of the company,
whether through merger, consolidation, reorganization,
recapitalization, reclassification, stock dividend, stock
split, combination of shares, exchange of shares, change
in corporate structure or the like, an appropriate and
proportionate adjustment shall be made in the number and
kind of shares subject to this Plan, and in the number,
kind, and per share exercise price of shares of Common
Stock subject to unexercised Options or portions thereof
granted prior to any such change. Any such adjustment in
an outstanding option, however, shall be made without a
change in the total price applicable to the unexercised
portion of the Option but with a corresponding adjustment
in the price for ach share covered by the Option.

(b) Acquisition. Upon a reorganization, merger or
consolidation in which the Company is not the surviving
corporation, or upon the sale of all or substantially all
of the property of the Company to another corporation,
provision shall be made in connection with such
transaction for the assumption of the Plan and the Options
theretofore granted by the success or corporation.
Provision may, alternatively, be made for the substitution
for such Options of new options of the successor
corporation or a parent or subsidiary thereof. In any such
case, appropriate adjustment as to the number and kind of
shares and the per share exercise prices shall be made. No
fractional shares of stock shall be issued under the Plan
on account of any adjustment specified above.

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(c) Dissolution or Liquidation. Upon the dissolution or
liquidation of the Company, this Plan and the Options
issued thereunder shall terminate.

15. Legal Restrictions.

The Company will not be obligated to issue shares of common
Stock or make any payment if counsel to the Company determines that
such issuance or payment would violate any law or regulation of any
governmental authority or any agreement between the Company and any
national securities exchange on which the common stock is listed. In
connection with any stock issuance or transfer, the person acquiring
the share s hall, if requested by the Company, give assurances
satisfactory to counsel to the Company regarding such matters as the
Company may deem desirable to assure compliance with all legal
requirements. The Company shall in no event be obliged to take any
action in order to cause the exercise of any aware under the Plan.

16. No Rights as Shareholders.

No Grantee, and no beneficiary or other person claiming
through a Grantee, shall have any interest in any share of Common Stock
allocate for the purposes of the Plan or subject to any award until
such shares of common Stock shall have been transferred to the Grantee
or such person. Furthermore, the existence of awards under the Plan
shall not affect: the right or power of the Company or its stockholders
to make adjustments, recapitalizations, reorganization or other changes
in the Company's capital structure; the dissolution or liquidation of
the Company, or the sale or transfer of any part of its assets or
business; or any other corporate act, whether of a similar character or
otherwise.

17. Board Membership.

Nothing in the plan or in any Option shall confer upon any
Grantee any right to continue as a director of0 the Company or
interfere in any way with the right of the Company's shareholders to
remove a director at any time.

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APPENDIX A

STOCK OPTION AGREEMENT
UNDER THE
BIRMINGHAM UTILITIES, INC. STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS

Pursuant to Article 7 of the Birmingham Utilities, Inc. Stock Option
Plan for Non-Employee Directors (the "Plan"), Birmingham Utilities, Inc. (the
"Company"), this day of 20__, (the "Grant Date"), hereby grants to _____________
("Director") a non-qualified stock option to purchase an aggregate of
________________ shares of the Common Stock of the Company at $ per share, on
the terms and conditions hereinafter set forth and set forth in the Plan. This
option will expire at the Company's close of business on ___________, 20___,
unless sooner terminated in accordance with the terms of the Plan.

1. The Company hereby grants to Director a non-qualified stock option
(the "Option") to purchase on or before the expiration date indicated above, at
the purchase price stated above, the number of shares of the Company's Common
Stock set forth above. No option granted under the Plan shall be exercised or
will vest unless and until the Plan is approved by the Company's shareholders
and the Connecticut Department of Public Utility Control.

2. The term of this Option shall commence on the date of this Agreement
and shall terminate, unless sooner terminated by the terms of the Plan, at the
close of business on the day preceding the tenth anniversary of the date of this
Agreement as set forth above, if the Company is open for business on such day,
or the close of the Company's business on the next preceding day that the
Company is open for business. Unless the Option is terminated or the time of its
exercisability is accelerated in accordance with the Plan, the Option shall be
exercisable only to the extent of one-half of the number of shares of the Common
Stock to which it relates on or after the first anniversary of its Grant Date
set forth above and shall be exercisable to the extent of the remaining one-half
of such shares only on or after the second anniversary of the Grant Date, so
that the Option shall be exercisable in full only on or after the second
anniversary of the Grant Date. This Option shall become immediately exercisable
under the circumstances described in Section 7(b)(iv) of the Plan.

-1-

3. This Option may be exercised, in whole or in part, by written
notification delivered in person or by mail to the Secretary of the Company at
its offices at 230 Beaver Street, Ansonia, Connecticut. Such notification shall
specify the number of shares with respect to which the Option is being exercised
and shall be accompanied by payment for such shares. The Secretary of the
Company will provide Director with a form of exercise notice upon request. The
Option may not be exercised with respect to a fractional share. Payment is to be
made by check payable to the order of the Company or by one of the alternative
methods of payment described in the Plan. No shares shall be sold or delivered
hereunder until full payment for such shares has been made and all checks
delivered in payment therefor have been collected. Director shall not have any
rights of a shareholder with respect to any Common Stock received upon exercise
of the Option until certificates for such Common Stock have been actually issued
to Director in accordance with the terms hereof.

4. The Company shall not be required to issue or deliver any
certificate or certificates for shares of its Common Stock purchased upon the
exercise of any part of this Option prior to (i) the admission of such shares to
listing on any stock exchange on which the stock may then be listed, (ii) the
completion of any registration or other qualification of such shares under any
applicable law, rule or regulation, (iii) the obtaining of any consent or
approval or other clearance from any governmental agency which the Company
determines to be necessary or advisable, and (iv) the payment to the Company,
upon its demand, of any amount requested by the Company for the purpose of
satisfying its liability, if any, to withhold federal, state or local income or
earnings tax or any other applicable tax or assessment (plus interest or
penalties thereon, if any, caused by a delay in making such payment) incurred by
reason of the exercise of this Option or the transfer of such shares thereupon.
The Option shall be exercised and shares of the Company's Common Stock issued
only upon compliance with the Securities Act of 1933, as amended (the "Act"),
and any other applicable securities laws, and Director agrees to comply with any
requirements imposed by the Committee. Because Director is an "affiliate" of the
Company (as that term is defined in Rule 144 promulgated under the Act, and
which generally includes directors), by accepting this Agreement, you agree that
you will dispose of the stock acquired upon exercise of the Option only in
compliance with Rule 144 or in such other manner as will not violate the Act and
the rules and regulations promulgated thereunder, and any other applicable
securities law.

5. This Option is not transferable by Director otherwise than by will
or by the laws of descent and distribution or pursuant to a qualified domestic
relations order, as defined in the Code, and is exercisable, during Director's
life, only by Director or by Director's guardian or legal representative, unless
and to the extent transferability becomes permitted under the terms of the Plan.
Any attempted assignment, transfer, pledge, hypothecation or other disposition
of the Option contrary to the provisions hereof shall be null and void. This
Option does not confer upon Director any right with respect to continuation of
Director's service as a director of the Company or any of its subsidiaries, and
will not interfere in any way with the right of the Company's shareholders or
the shareholders of any of its Subsidiaries to terminate Director's service as a
director.

6. Upon the termination of Director's service as a member of the Board
of Directors, the Director may exercise this Option, provided that it has
vested, to the full extent of the number of the shares of Common Stock remaining
under such Option, regardless of whether such Option was previously exercisable,
in accordance with the conditions of Article 12 of the Plan.

-2-

7. This Option shall be irrevocable during the Option period and its
validity and construction shall be governed by the laws of the State of
Connecticut. The terms and conditions herein set forth are subject in all
respects to the terms and conditions of the Plan, which shall be controlling.
You agree to execute such other agreements, documents or assignments as may be
necessary to desirable to effect the purposes of this Agreement.

8. The grant of this Option shall be binding and effective only if this
Agreement is executed by or on behalf of the Company and by you and a signed
copy is returned to the Company.

9. All capitalized terms used in this Agreement which are not defined
herein shall have the meaning given to them in the Plan unless the context
clearly requires otherwise.

BIRMINGHAM UTILITIES, INC.

By ___________________________
Its

I hereby acknowledge receipt of the Stock Option (the "Option") granted
on the date shown above, which has been issued to me under the terms and
conditions of Birmingham Utilities, Inc. Stock Option Plan for Non-Employee
Directors. I agree to conform to all of the terms and conditions of the Option
and the Plan.

Date:___________________ Your Signature:____________________

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Birmingham Utilities, Inc.
230 Beaver Street
Ansonia, Connecticut 06401

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Kenneth E. Schaible and James E. Cohen
as proxies, each the with power to appoint his substitute, and hereby authorizes
them to represent and to vote as designated on the reverse side all shares of
common stock of Birmingham Utilities, Inc., held of record by the undersigned on
April 2, 2001 at the annual meeting of shareholders to be held on May 9, 2001,
or any adjournment thereof.

(Continued and to be signed on other side)

Please date, sign and mail your
proxy card back as soon as possible!

Annual Meeting of Shareholders
BIRMINGHAM UTILITIES, INC.

May 9, 2001

Please Detach and Mail in the Envelope Provided
- --------------------------------------------------------------------------------

A [X] Please mark your votes as in this example.

1. To elect directors of the Company. Nominees: M.J. Adanti
M.J. Burt
For all nominees listed at right, J.E. Cohen
(Except as marked to the contrary below) [_] A. da Silva
B. Henley-Cohn
WITHHOLD AUTHORITY to vote for T. Klarides
all nominees listed at right [_] A.J. Rivers
B.L. Sauerteig
K.E. Schaible
J. Tomac

(Instructions: To withhold authority to vote for any one or more individual
nominees, write that nominee's name in the space provided below)

- --------------------------------------------------------------------------------

FOR AGAINST ABSTAIN
2. To approve the Birmingham [_] [_] [_]
Utilities, Inc. 2000 Stock Option
Plan for non-employee Directors.

3. To approve the appointment of [_] [_] [_]
Dworken, Hillman, LaMorte &
Sterczala, P.C., as the Independent
Auditors of the Corporation.

4. In their discretion, the proxies
are authorized to vote upon such
other business as may properly come
before the meeting.

This Proxy when properly executed
will be voted in the manner directed
herein by the undersigned
shareholder. If no direction is
made, this proxy will be voted FOR
proposals 1, 2 and 3.

PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY.

SIGNATURE(S)___________________DATE__________

SIGNATURE(S)___________________DATE__________
Signature if jointly held

NOTE: Please sign exactly as name appears above. When shares held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation or
partnership, please sign in full name by authorized officer or partner.