Water board leaves door open for rate increase; CEO says utility has capacity to supply data centers
Birmingham's regional water utility board held a rate-setting workshop, deferring decisions on potential rate increases. The utility's CEO stated they have ample capacity and are actively promoting their ability to supply water to AI data centers, including a large, controversial project in Oxmoor Valley. They are also coordinating with Alabama Power.
The Central Alabama Water (CAW) board of directors held a rate-setting workshop where they deliberated on potential rate increases for 2024 or 2027 but made no immediate decisions. The utility is facing financial challenges, including a slashed budget and workforce reductions, prompting a presentation from financial consultant Peiffer Brandt of Raftelis, who advocated for smaller, annual rate hikes.
A significant point of discussion was CAW's capacity to supply water to AI data centers. Despite losing about 40% of its treated water to leaks, CAW Chief Executive Jeffrey Thompson asserted that the utility possesses abundant cold, high-quality raw water at low prices and is actively marketing this capacity to potential data center developers. This includes a large, controversial data center under construction in Birmingham's Oxmoor Valley, though a raw-water pipeline does not currently extend to that specific site.
Thompson noted CAW's proactive engagement with Alabama Power, as data center developers typically approach electric companies first. Brandt highlighted that CAW is uniquely positioned to pivot towards supplying data centers due to decreased demand from Birmingham's declining steel industry, making it an advantageous player in this new market compared to other utilities nationwide.