New Report: More Than Half of Birmingham’s Water Never Reaches Customers

A newly released report from Central Alabama Water shows major challenges inside the region’s water system including significant water loss, sharply rising customer bills, and increasing operating costs.

The report reviews the operations of the former Birmingham Water Works Board from 2001 through 2024, before the system was reorganized by state lawmakers in 2025.

READ THE REPORT BELOW

According to the report, the problems developed over decades and will take time to correct.

More than half of treated water never reaches customers

The report shows 53% of treated water was not billed to customers in 2024.

That means more than half of the water produced by the system is lost before it ever reaches a meter.

The report says the losses may come from leaks in water mains or customers being billed for less water than they consumed.

Since 2001, the amount of treated water that is not billed to customers has increased by 129%.

Water bills have risen sharply

The report also shows residential water bills have increased much faster than inflation.

In 2001:

The average customer paid about $11 per month for standard water usage.

By 2024:

That same usage cost nearly $50 per month.

That is a 354% increase, while inflation rose about 79% during the same period.

The report says revenue growth came almost entirely from rate increases, not from more customers or higher water use.

In fact, overall water consumption has declined more than 26% since 2001.

Operating costs have also climbed

Operating expenses have also increased significantly.

According to the report:

Expenses grew from $44 million in 2001

To $148 million in 2024

That’s an increase of more than 237%.

Administrative costs alone rose nearly 70% between 2021 and 2024.

Why the system was reorganized

The findings help explain why the Alabama Legislature passed a law in 2025 restructuring the Birmingham Water Works Board into the regional utility now called Central Alabama Water.

CEO Jeffrey Thompson said the data shows long-term trends that the new system will now have to address.

“These negative trends over more than 20 years will take time to correct,” Thompson said.

What happens next

Central Alabama Water says a revised 2026 budget aimed at addressing some of these issues will be presented to its board March 20.

The utility serves customers across Jefferson, Shelby, St. Clair, Blount and Walker counties.