By John — Desalination News
A joint investigation by Inside Climate News and The Texas Newsroom, published this week by the Texas Tribune and Texas Public Radio, lays out in new detail how Corpus Christi’s eight-year push for a seawater desalination plant ballooned from a $140 million proposal into a $1.2 billion liability — and how the arrangement that got it started, a special water-rate deal for the city’s largest industrial users, is now headed to a November ballot vote that could unwind it.
The saga began in 2014, when roughly a dozen of the region’s largest water users — including OxyChem, Valero, Citgo and Flint Hills Resources — formed a committee with city officials to explore building a desalination plant to secure water for their own growth plans along the Inner Harbor. The project became public in 2016 so it could tap cheap state loans, and in July 2018 the City Council unanimously approved what the investigation calls a “drought surcharge exemption fee”: roughly an 8% rate increase for the city’s largest industrial users, paid in exchange for being shielded from the much steeper drought surcharges — in some cases over 100% — that would otherwise apply to everyone else during a water shortage.
The numbers escalated steadily from there. The original 2019 plan called for a 10-million-gallon-a-day plant at about $140 million. By February 2020 the city had doubled the planned capacity to 20 million gallons a day, pushing the estimate to roughly $220 million, with Council approving a $222 million state loan application on a near-unanimous vote. Permitting then stalled for years. By January 2024, inflation and delays had pushed the estimated cost to $757 million, and the city applied for an additional $535 million in state financing. By July 2025, the contractor’s own estimate had reached $1.2 billion — nearly nine times the original figure — and in September 2025, after a 13-hour council meeting, Corpus Christi fired that contractor, a decision this blog covered at the time (see our September coverage and the $235 million defeasance story from the city’s second rejection vote).
The new reporting adds the financial mechanics that made the project so politically combustible: the industrial exemption fee generates only about $6 million a year, against roughly $68 million a year in projected debt service on the state loans — meaning residential ratepayers, not the industrial users whose growth drove the original plan, would have shouldered most of the difference. The city has already spent at least $50 million on the project; walking away entirely would require repaying the state $235 million in loans already drawn, plus an estimated $70 million in interest.
Those numbers landed against the backdrop of an actual water emergency: Lake Corpus Christi, the city’s primary reservoir, fell below 10% full in March 2026, prompting emergency well-drilling by several of the same industrial companies that had championed the original plan. Heavy July rains lifted reservoir levels back above 40%, easing the immediate crisis, but Governor Greg Abbott publicly criticized the city for what he called “squandering” state loan money, and a citizen group called For the Greater Good gathered roughly 13,000 signatures to force a public vote.
That vote — the Fair Water Amendment — will appear on Corpus Christi’s November 2026 ballot. If approved, it would repeal the industrial drought-surcharge exemption and sharply raise water prices for large industrial users during future droughts, reversing the 2018 bargain that got the desalination project started in the first place. Desalination supporters on the current council are hoping a more favorable council, seated after the same election, revives the project regardless of the amendment’s outcome — the city is still weighing a cheaper replacement contractor it voted down in September, even as it moves ahead separately with the unrelated Harbor Island desalination project near Port Aransas, which cleared its final permits last month and remains on a separate track toward construction.
Corpus Christi’s Inner Harbor project has become something of a cautionary case study for other Gulf Coast cities now weighing their own desalination bids, including the broader Texas water-scarcity debates playing out from the Rio Grande basin to Galveston Bay. Whatever November’s vote decides, the city will still be negotiating with the state over how — or whether — to finish a plant that has already cost residents and industry alike far more than anyone budgeted for in 2018.
(Source: Texas Tribune, Inside Climate News, The Texas Newsroom, Texas Public Radio)