Corpus Christi Voters to Decide on Refinery Water Surcharges
The Corpus Christi City Council has adopted a ballot measure to let voters decide whether large industrial users — including oil and petrochemical refineries — must pay more for water when the city, a key Texas energy hub, is coping with drought.
Proposed water surcharges for the city’s three oil refineries and about half a dozen petrochemical plants are nothing new during a five-year drought in South Texas. However, the new measure marks the first time a specific group of water customers would be singled out.
A citizen-led petition to put the “Fair Water Amendment” on a ballot was signed by nearly 13,000 of the city’s registered voters, blowing past the required 9,000 minimum by almost 50%. On Aug. 11, the City Council voted 6-2 to approve the measure.
The proposition is scheduled to appear on the Nov. 3 general election ballot. It will allow voters to potentially amend the city charter by introducing the water surcharges, and it would end certain exemptions and require conservation measures from large industrial users.
The referendum calls for such users to pay no surcharges during Stage 1 water restrictions; $3 per 1,000 gal during Stage 2; $6 per 1,000 gal in Stage 3; and $12 per 1,000 gal during a designated water emergency.
The proposed amendment defines large industrial users as refineries, large-scale data centers and other high-volume water consumers, with average use exceeding 100,000 gal per day.
In mid-May, the City Council passed a law requiring that, during a water emergency, all users pay $4/gal per 1,000 gal above their individual allocation level up to a baseline, and $8/gal per 1,000 gal for any volume above it.
Under that plan, most residential and non-industrial users would not pay more.
Corpus Christi is currently under Stage 2 water restrictions, just three months after city officials warned that an unprecedented water emergency could strike as early as September. A wet spring and summer have since helped replenish the city’s reservoir capacity to 42.9% from just 14.1% a year ago, lessening the likelihood that water will run out.
Valero Energy, privately held Flint Hills Resources and Citgo — with a combined crude distillation capacity of 900,000 b/d, or about 5% of all U.S. refining capacity — did not reply to requests for comment.
Bob Paulison, executive director of industry group Coastal Bend Industry Association, said Corpus Christi Water and the City Council should have the power to update the drought contingency plan and volunteer water surcharge program.
“As a matter of good public policy, especially when navigating dynamic situations like drought response, that’s exactly where the authority should stay,” he said.
In May, a Valero spokeswoman referred to a 30-year agreement between the company and the city to supply up to 8 million gal per day of reclaimed water for the refiner’s operations. Most refining companies said in May that they have been partnering with the city to balance water demand and did not expect potential water surcharges to disrupt operations.
Still, Corpus Christi’s referendum could face legal challenges.
The Office of the Texas Secretary of State said the office believed the proposition is a municipal climate charter amendment that would require state legislative approval under Texas law — but the city of Corpus Christi “must be the one to make the final determination.”
City Council members voted for the Fair Water Amendment against the advice of the City Attorney, who concluded that the proposal is a climate charter issue.
And some city officials argued that the referendum’s rate increases could not be legally binding to only one group of customers. Additionally, refiners and petrochemicals will most likely challenge any new surcharges.
–Reporting by Frank Tang, ftang@opisnet.com; Editing by Dean Visser, dean.visser@dowjones.com
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