S&P Global today lowered the bond rating of Central Alabama Water (CAW) from AA to AA- and placed CAW on CreditWatch Negative.
For Immediate Release: Wednesday, February 11, 2026
BIRMINGHAM – S&P Global today lowered the bond rating of Central Alabama Water (CAW) from AA to AA- and placed CAW on CreditWatch Negative.
“While this action is serious, it does not come as a surprise to the current management team,” said Jeffrey F. Thompson, CEO of Central Alabama Water. “We were aware of S&P Global’s concerns, had similar concerns of our own and are working to address them.”
S&P Global’s action is based on weakening finances at Alabama’s largest water utility that have developed over the past several years. Central Alabama Water’s predecessor organization (Birmingham Water Works Board) exceeded its operating expense budget for multiple years while allowing unbilled and lost water to grow to high levels. It was concerns such as these that prompted the Alabama Legislature to pass SB330 which became Act No. 2025-297 dissolving the previous organization and creating Central Alabama Water.
Since November 2025, the new management team has taken steps to improve the utility’s financial outlook including pausing the project at Lake Purdy Dam for reevaluation. The board recently hired the Consulting Engineer (Jacobs Engineering Group) as required by Act No. 2025-297. The Consulting Engineer is currently evaluating the project and is expected to issue a report soon.
Management plans to present a revised operating budget and capital expenditure budget in March. The revised budgets are expected to include more fiscally conservative adjustments.
“We anticipate the revised budgets to provide a path forward to ensure the long-term financial stability of CAW,” Thompson said. “We have already taken steps to improve our financial position and will continue to do what is necessary to create a world-class water utility that our customers can trust.”
Click here to read S&P Global’s report.
About Central Alabama Water
Central Alabama Water serves 770,000 customers in Jefferson, Shelby, St. Clair, Blount and Walker counties. It operates four water treatment facilities, a certified testing laboratory and maintains more than 4,150 miles of water main in its distribution network. Visit caw-al.gov for more information.
