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Interim study examines utility relocation costs as Rebuild Alabama projects accelerate
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Summary
Alabama transportation officials outlined how utility relocations are handled under state law and presented project-level examples; electric co-ops, broadband providers and municipal leaders told the commission the current rules and timing strain utilities and can shift costs to customers or local budgets.
The Joint Interim Study Commission on Utility Relocation Costs heard an overview from the Alabama Department of Transportation and testimony from utilities and local officials about how the state handles moving power, water, sewer and communications lines for road projects funded under the Rebuild Alabama Act.
Tony Harris, chief of communications and government relations for the Department of Transportation, told the commission “this is a very complex issue” and reviewed the department’s multi-step project development process, the Statewide Transportation Improvement Program (STIP) and examples of recent projects that required multiple utility relocations.
Harris described three projects to illustrate the timeline and scale of relocations: a bridge replacement on U.S. 84 over the Tombigbee River in Choctaw County (shown in the STIP at about $37 million, with design and utility work starting years before the planned bid); the Highway 52 widening in Geneva County (a Rebuild Alabama project divided into two phases, phase 1 under construction at roughly $23 million; combined phases produced 24 relocations across 10 utility owners); and a Highway 14 project in Elmore County (a federal/state project that included bridge replacement and widening, with 13 relocations; four were non‑reimbursable and nine reimbursable).
Harris provided a two‑year snapshot of relocations the department tracked: fiscal year 2023 had 30 reimbursed relocations costing about $20 million (average reimbursement roughly $666,000) and 66 non‑reimbursed relocations; fiscal year 2024 showed 52 reimbursed relocations costing about $25 million (average roughly $480,000) and 102 non‑reimbursed relocations. Using conservative multipliers (1.75 to 2.0) to account for larger, non‑reimbursed facilities, Harris said shifting all relocation responsibility to the department would increase state costs by tens of millions of dollars in those years (for example, roughly $77–$88 million using FY23 non‑reimbursed counts and a 1.75–2 multiplier; roughly $85.8–$100 million for FY24 non‑reimbursed counts using the same multipliers). Harris cautioned federal funding totals and state revenue are finite and any net increase would require adjusting other program priorities.
Utility representatives and municipal officials told the commission the current mix of policy, timing and cost allocation creates practical problems for providers that must move facilities before construction. Daryl Jones, general manager of Black Warrior EMC, said his cooperative and other rural electric co‑ops in the Alabama Rural Electric Association were told in town halls that relocations under some Rebuild Alabama segments would not be reimbursed. Jones said his cooperative has spent $2,240,000 so far on relocations for the West Alabama Highway segments; the cooperative has been reimbursed $1,056,000 and received a variance limiting state reimbursement to a $4,000,000 cap on their work to date. Jones said those expenditures came out of the co‑op’s planned capital work and that the project timeline has slipped: “We can’t cash flow this like that,” he said, describing work already completed in several segments and the long lead time to provide safe, accessible lines once right of way is cleared.
Taylor Bies, who handles government affairs for Charter Communications in Alabama, said broadband projects nationwide are built on thin margins and that Alabama’s statutory threshold — which ties reimbursement eligibility in part to a company’s revenue — is unusual. Bies said Alabama’s $250 million revenue threshold for reimbursement is not used in most other states and can penalize larger providers that otherwise invest in broadband expansion. He noted a combined federal and state investment in Geneva County that brought broadband to more than 7,000 households and businesses — “over $33,000,000 in investment in Geneva County alone,” he said — and warned that unpredictable relocation costs threaten long‑term broadband deployment decisions.
Sheldon Day, a mayor who represents municipal utility concerns on the League of Municipalities board, urged better sequencing and coordination among utilities and contractors so relocations do not block each other. Day and other municipal speakers said projects sometimes require multiple relocations over time in the same corridor and recommended longer‑range planning, penalties or incentives to prevent a single utility from holding up a segment, and consideration of partial reimbursement if full state reimbursement is unaffordable.
Representatives of investor‑owned and cooperative electric utilities said they are working with ALDOT on sequencing and on accommodating construction needs such as crane placement, but they emphasized the practical difficulty of late‑stage changes.
The commission chair asked staff to circulate copies of Harris’s presentation and asked members to bring concrete proposals to the next meeting on how to improve coordination and cost predictability. The commission signaled plans to meet again this fall and to produce a report for the legislative session in January.
The meeting recorded one formal action at the outset: the committee approved minutes from the July 15 meeting; the motion, second and individual member roll‑call votes were not recorded by name in the transcript.
