AXE H2O has submitted a formal business proposal to the city of Corpus Christi for a privately funded desalination plant, and the company is asking for a commitment from city leaders by June 18.
The company, formed in March, submitted its proposal on June 1. The plan promises up to 150 million gallons of desalinated water per day at a cost of $6.50 per thousand gallons, with brine discharge three miles into the Gulf.
AXE H2O says the project would be privately funded with no additional debt to Corpus Christi.
CEO Matt Burger pushed back on skepticism about the proposal's pricing.
"It's interesting it depends on who you talk to. When we talk to desal experts their first reaction is: 'Why are you charging so much?' We're competitive with worldwide pricing with desal. This isn't unique to us or unique to Corpus Christi that price point," Burger said.
"It's not produced here for the first time ever it's right in line with international pricing standards for desal operations," he added.
On May 5th, AXE H2O met with city leaders to discuss its goals. Now, with a formal proposal on the table, the company says communication with the city is ongoing but that no commitment has been made.
"We offered a very specific merchant agreement and I think the city is exploring multiple paths and I don't think they're ready to commit to that is the feedback we got," Burger said. "That doesn't mean we're done working with the city or city officials. I think working through what would a partnership look like and what that opportunity would be is where we're headed."
Chairman Dr. John Olson explained why the company set a June 18 deadline for a response.
"This is an emergency response. Three weeks for a response when you have a critical crisis we thought was a sufficient amount of time. However, it is also driven by our financial backers. It's also driven by an extremely high demand for other places other customers. We are exploring all options," Olson said.
Burger addressed whether the company would walk away if the deadline passes.
"Will we walk out on the 18th? Of course not. But I do think what you see is our time is moving," Burger said.
The AXE H2O team is also eyeing the Barney Davis plant in Flour Bluff as a potential location for the desalination facility. Olson and Burger say they met with the CEO of CPS Energy, Rudy Garza, which owns the property, about leasing land there.
CITY OF CORPUS CHRISTI'S RESPONSE:
Per Corpus Christi City Manager Peter Zanoni, the city sent a response to AXE H2O on June 5th. Here's a quote from the response:
“According to AXE H2O documentation, the proposed site for the seawater desalination facility is the Barney M. Davis Power Plant (Barney Davis), owned by CPS Energy. To the City's knowledge, there is no formal land-use agreement between CPS Energy and AXE H2O.
The City is in active discussions with CPS Energy regarding a partnership for a seawater desalination facility at that site. Once a formal agreement is reached and a development plan for the Barney Davis site is confirmed, the City will issue a Request for Proposals (RFP) to design, build, and operate a seawater desalination facility.
Completion of these steps is a prerequisite before the City can commit to an offtake volume with any company.”
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