CORPUS CHRISTI, Texas — Corpus Christi is defending higher water rates for major industrial customers as a legal battle with some of the nation’s largest energy companies begins before a state administrative court in Austin.
City officials said large industrial users, including Valero, Citgo and LyondellBasell, paid discounted water rates for at least a decade, leaving residential and commercial customers to subsidize more than $100 million in water costs.
The dispute stems from the city’s 2023 decision to double water rates for large-volume industrial customers after a cost-of-service study found the group was paying about $15 million less each year than the actual cost of providing water service.
The companies challenged the increases before state regulators, arguing they should receive lower rates because they use less of the city’s water distribution system than customers within city limits.
Corpus Christi officials rejected that claim, saying industrial customers benefit from the entire interconnected water system and should pay a proportionate share of its costs.
The outcome could significantly affect the city as it faces ongoing water shortages and seeks funding for new water infrastructure projects. City officials said an unfavorable ruling could require refunds worth tens of millions of dollars to the companies while forcing additional rate increases on other customers.
The case will be heard over three days before an administrative law judge, who will issue a recommendation before the Public Utility Commission of Texas makes the final decision.