Customers of Alabama’s largest water utility, which serves the Birmingham metro area, will see their rates increase by 3.4% in January, with an additional increase possible later next year.
The rate hike will increase most residential customers’ bills by up to $3.38 per month. In addition, a change in the utility’s rate structure will increase those customers’ bills by up to $4.90 per month.
The board overseeing Central Alabama Water approved the increase in a meeting Friday after a senior manager described the utility’s pipeline system as crumbling and failing and a financial advisor said larger increases will be needed in the future to meet infrastructure needs.
“This year, 3.4% is fine,” Peiffer Brandt, president and chief executive of Raftelis, told the board. “But I’m just putting you on notice … it’s likely that more than inflationary rate increases will be necessary to do the capital [projects] you need.”
A rate increase of 6.4% was on the agenda, but board Vice Chairman Phillip Wiedmeyer moved to substitute a lower increase, reduce the capital-projects budget to make up for the lower increase, and consider further rate changes in May. He said the lower rate increase could negatively affect customers in the long run.
“This decision does not come without consequences for the rate payers,” Wiedmeyer said. “It’s a little bit of pay me now or pay me later. Because if we delay, the cost of doing those projects in the future are going to be more expensive than it would be to do them now.”
Board members Jarvis Patton Sr. and Sheila Tyson lobbied to delay the vote by two weeks. Patton said he could work with staff in that time to develop a plan that would avoid raising rates for those least able to pay.
“I don't believe that we're being fair to some of the ratepayers by asking them or telling them that their rates are going to be increased beyond their means to pay,” Patton said. “To me, that's just simply wrong. If you haven't fixed the pipes in 20 years, all of a sudden you want to fix them in 30 days? Why can't we just be sensible about this?”
Tyson noted the current board hasn’t held a public hearing on rates since it began operating in May of 2025.
“I think we need to be careful on what we’re doing,” Tyson said. “I think we need to look into this more and we need to hear from the citizens and we need to have a town hall meeting.”
Several members of the public were present but weren’t allowed to speak at the meeting, which was held in Blount County, about an hour’s drive from Birmingham. More than 90 percent of CAW’s customers live in Jefferson County, where the city is located.
“I feel like we need to hear from some of the customers that’s in this room before we make a decision,” Tyson said. “Because it’s going to affect their lives.”
Tyson, who is also a Jefferson County commissioner, said she gets constant calls from constituents who can’t pay their water bills. The utility has faced long-running customer complaints about missing and inaccurate bills. At the board’s last meeting, managers revealed CAW’s customer service phone lines have been overwhelmed recently.
Board Chairman Tommy Hudson denied residents’ requests to speak.
“Unfortunately, our bylaws are very clear in stating that public comment can only be made upon a written request to the board to add it to the agenda,” he said.
Teri Wright, a retired nurse and former president of the Eastwood Neighborhood Association, was among residents holding small signs protesting the potential rate hike and saying water bills are already too high. She said replacing aging pipelines is a foreseeable infrastructure need and not a reason why rate increases are unavoidable.
“That's like bridges and other structures – you account for that,” Wright said. “I think that it's a management problem.”
Charles Miller, the Birmingham-based policy director for the Alabama Rivers Alliance, said he was at the meeting because he opposes the rate-structure change the board approved. The current structure has three tiers based on usage, with those who use more water paying more per unit. Tiered rate structures are intended to conserve water. The new rate structure will be flat, charging customers the same amount per billed unit of water, regardless of how much they use.
“I'm concerned by the shift to a flat-rate structure that would basically disincentivize conservation, not make people aware of things they can do to reduce their water use, and that to us is just kind of silly,” Miller said. “Especially when you look at the fact that that alone is not going to increase any revenue.”
