Central Alabama Water, the regional utility the Alabama Legislature created last year to replace the long-troubled Birmingham Water Works Board, received its first significant vote of confidence from Wall Street this week.
In February, S&P Global downgraded CAW’s bond rating based on weakening finances at Alabama’s largest water utility that had developed over several years, according to the organization. That rating action has now been removed.
S&P Global Ratings removed Central Alabama Water from “CreditWatch Negative,” revised the utility’s outlook to “Stable,” and affirmed its AA- bond rating.
“CAW’s leadership team is pleased that S&P Global positively acknowledged the actions CAW is taking to improve its financial situation,” said Jeffrey F. Thompson, CEO of Central Alabama Water.
“Difficult decisions were required to move the system in the right direction operationally, and we still have a long road ahead to become the system our community and customers deserve. S&P Global’s validation of the actions taken so far is an indication that we are headed in the right direction.”
S&P Global explained its rationale for the change, citing the revised operations and maintenance budget and capital budget CAW adopted in March as contributing factors. According to the report, both budgets reduced expenditures while meeting the utility’s most pressing needs.
“Every decision at CAW is focused on the long-term best interest of the system and its customers,” Thompson said. “We are proud that S&P Global recognizes the fiscally responsible work our team is achieving every single day for customers across our service area. We look forward to the work ahead and will continue to take steps to improve CAW and provide our customers with the world-class water utility they deserve.”
CAW stated that since November 2025, the executive team has taken steps to improve the utility’s financial outlook and limit negative impacts on customers by reducing operating costs. The company said CAW’s leadership team and board are adhering to a policy designed to ensure the system’s operational costs are appropriately managed before considering future rate increases for residential and commercial customers.
According to CAW, the utility serves customers in Jefferson, Shelby, St. Clair, Blount, and Walker counties. It operates four water treatment facilities and maintains more than 4,150 miles of water mains in its distribution network.
The full S&P Global report can be found here.
Sherri Blevins is a staff writer for Yellowhammer News. You may contact her at [email protected].
