Seven months after axing their own seawater desalination plant project — and five months from when a water crisis is expected to surface — Corpus Christi City Council voted 6-2 Tuesday to begin preliminary talks with a new company to build a desalination facility for the Coastal Bend area.
AXE H20, a 2-month-old private company based in Houston, is seeking to build a plant that could produce 150 million gallons of drinking water a day. According to a presentation Tuesday, the city could pay $6.50 per 1,000 gallons — about 30% cheaper than a controversial plan to revive a city-built desalination plant known as the Inner Harbor Project.
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John Olson, the company’s chairman, said using natural gas rather than electricity enables it to offer a cheaper rate than other proposals. He said the company would need two years to build the facility.
“It involves no public funds, no debt, no bond rating issues,” he told council members. “No taxpayer risks, no operating expenses. This is absolutely a private venture.”
This is the second privately owned plant the city is considering. In March, the council greenlit the water department’s recommendation to consider purchasing water from a desalination plant that’s under construction by plastic manufacturer Corpus Christi Polymers.
Before AXE H20 breaks ground on what it calls an “American-led megaproject,” the city would have to agree to buy between 50 million to 150 million gallons a day from the plant for at least 30 years.
Plans are still in the early stages. The company doesn’t yet have a location for the proposed plant, which led several council members to express skepticism about the proposal.
The two council members who voted against moving forward with AXE H2O talks — Roland Barrera and Sylvia Campos — said they were hesitant about proceeding without a thorough plan.
“I just would have liked to have heard more or had a little more time to prepare,” Campos said. “It sounds wonderful, but it’s sort of like too good to be true.”
“We’re in a very precarious situation where we need water, but we also need to be vigilant as to what projects are coming up and are we doing our proper vetting,” Campos said.
On Tuesday, the council also voted to move forward with hearing a proposal from water provider Seven Seas Water Group to build a groundwater project that could daily produce up to 20 million gallons of drinking water from brackish water, a mix of freshwater and seawater.
Corpus Christi is facing down an unforgiving drought that has caused two of its main reservoirs to drop below 8% capacity. Leaders estimate that by September, the city could be forced into a Level 1 emergency, the point when its water supply is projected to be 180 days from falling short of demand.
The stakes are high because Corpus Christi is the largest water supplier in the region, serving not only its 300,000 residents but 200,000 others across seven counties. It also provides water for one of the nation’s largest petrochemical corridors and is the country’s top port for crude oil exports. For now, it’s relying on temporary water sources to stave off a crisis.
Barrera said AXE H20’s presentation was given “prematurely” and warned the city’s looming emergency has pushed city leaders to “just buying anything. It’s a fire sale and it’s very irresponsible. It’s not good governance.”
Mayor Paulette Guajardo, who abstained from voting, said she wished the company discussed its plans with her directly before presenting to the City Council.
City Manager Peter Zanoni agreed, saying that “the proposal we received so far lacks detail, right? There’s no business data to make a recommendation to council.” He said the question before the council was whether to move forward with the company to create a more comprehensive plan.
Although other council members were hesitant about AXE H2O, they agreed that it’s not the time to be close minded.
Council Member Kaylynn Paxson said she understood that some council members wanted to hear a more fleshed out proposal, but “it should not be dragged down into this political maneuvering — it’s water, we need water,” she said.
Council Member Eric Cantu said he “bets on underdogs all the time and you guys are the underdogs right now,” later emphasizing that he has “100% faith” that they’ll come back to council with a thorough plan.
He added that he’s not surprised that the city is being sought out by desalination companies: “Everybody wants to come to Corpus Christi because water is the new gold, right?” he said.
AXE H2O projects it would cost about $1.3 billion to build the desalination plant. Cantu said he expects it to cost more than that, “but that’s your problem, not my problem.”
The cost of desalination plants is a sensitive topic for the City Council because it recently killed plans to build one after the proposed price nearly doubled to more than $1.2 billion. Facing the looming crisis, the City Council is slated to revisit that plan during its June 2 meeting.
Opponents have voiced concern about the project’s potential impact on the environment, including super salty discharge into Corpus Christi Bay they fear could form “dead zones” in the enclosed coastal ecosystem.
That’s what makes AXE H2O’s proposal different — instead of the bay, it plans to discharge offshore into the Gulf.
For that reason, Corpus Christi resident Robin Cox said she would support the newly proposed desalination plant despite her opposition to the Inner Harbor project.
“I am for desal, just not in the Inner Harbor where it’s going to pollute the bay,” she said.
The City Council’s next meeting is scheduled for May 12 at 11:30 a.m.