The Board of Directors of Central Alabama Water approved its 2026 budgets. This press release contains information about the budgets and water rates.
For Immediate Release: Wednesday, December 10, 2025
Click here to download the budget presentation as a PDF.
BIRMINGHAM – The Board of Directors of Central Alabama Water this afternoon approved its 2026 budgets. Below is more information about the budgets and water rates.
Budget approval and impact on water rates
The board of Alabama’s largest water utility passed its operation and maintenance budget and capital budget which do not include a rate increase. Rates will remain at the 2025 level. This applies to all customers – residential, commercial and wholesale.
“We want to make sure we’re using the funds our customers have entrusted to us as efficiently as possible before we consider a rate increase,” said Tommy Hudson, chairman of the board for Central Alabama Water. “These budgets are fiscally responsible based on our current situation. We will continue working to make this system responsive to the needs of our customers.”
Central Alabama Water customers’ bills are comprised of a fixed fee related to the size of their water meter and a variable charge based on the amount of water used per month. The variable charge has three rate tiers. While rates are not increasing, it is important to note that customers may notice their bills going up or down based on the amount of water they use each month.
Budgets may be revised
The 2026 operation and maintenance budget approved today is very similar to the budget that was prepared and discussed in two workshops this fall before the board hired a chief executive officer. The capital budget has been reduced from what was previously presented. Central Alabama Water’s bylaws require the board to adopt an operating budget by December 15 of each year, or the utility will operate on the preceding year’s budget until a new budget is adopted.
“Due to the fact that I only recently came onboard, we’re proceeding with the previously developed budgets; we absolutely could not have let the 2025 budgets roll over to next year,” explained Jeffrey F. Thompson, CEO of Central Alabama Water. “The utility has overspent its operation and maintenance budget the past several years and the deficit spending must end now. That’s why we thought it was important to pass these budgets as a stop-gap measure.”
The operation and maintenance budget covers the day-to-day needs of the water system. The capital budget outlines investments that will be made to improve and expand the system. It is possible that both budgets could be modified.
“Our team will keep working to make changes that will turn Central Alabama Water into a world-class utility,” Thompson added. “We see the budget passed today as a step in the right direction. We’re actively researching and analyzing each department to find additional savings, but it will take some time before we’re ready to make recommendations. I expect we will have a thorough revision to present to the board in the first quarter of 2026.”
About Central Alabama Water:
Central Alabama Water serves customers in Jefferson, Shelby, St. Clair, Blount and Walker counties. It operates four filtration plants, a certified testing laboratory and has more than 4,100 miles of water main in its distribution network. Visit caw-al.gov for more information.
