CORPUS CHRISTI, TX — As Corpus Christi grapples with a water crisis that has dominated headlines and city council meetings, residents watching KRIS 6 News have flooded our social media with questions. So each week, we're answering the most common questions.
"Someone explain to me why they didn't help foot the bill for the desal plant?? They use 55% of the water. So what am I missing??" one viewer, Ralph Chavez, commented on Facebook.
It's a fair question — and one that gets to the heart of how our city's water system actually works.
The short answer? Yes, industry could build its own desalination plant. But they argue they're already paying their share — and if they did go solo, your water bill would likely go up. Here's why.
Question: Has industry offered to pay for a desalination plant themselves? Explain what happened/is happening?
City response: "Industry contributes through ongoing water bills, just like residential and other customers do. The Inner Harbor Desalination Plant (not to be confused with Harbor Island Desalination Plant) would have been paid for through water fees that all customers pay based on how much water they use. Industrial customers use about 54% of all the water and would have ended up paying about 54% of the plant’s cost over time through regular water bills."
Question: If industry pays for their own desalination plant, how will that impact residents? Will their water bills increase? If so, why?
City response: Water bills would likely increase if industry paid for their own desalination plant and stopped buying water from the city. Water rates are calculated by dividing the city’s total operating costs by the amount of water sold. Most of the water system’s expenses are fixed costs that don’t change, like debt payments, electricity, and maintenance. If industrial customers stopped buying water from the city, there would be less water sold overall, but the fixed costs would remain the same. With fewer customers to spread these costs across, the remaining customers would have to pay higher water bills to cover same expenses.
Question: What percentage of the water utility's revenue currently comes from industrial customers?
City response: Industrial water users contribute approximately 42% of the water rate-generated revenue (raw and treated).
Industrial customers use 54% of all the water but only contribute about 42% of the water rate-generated revenue because of how treated water rates are calculated based on cost of service. Industrial customers make up less than 1% of all customers, so their share of administrative and billing costs is proportionally small. They also do not contribute as much to the maintenance costs of small pipes that primarily service homes and medium commercial buildings. The costs for maintaining those smaller residential and commercial lines are recovered from the customers who use them, which results in lower revenue generation from industrial customers for treated water. For raw water (untreated water), all customers pay the same flat rate per 1,000 gallons, so the more ‘raw water’ industrial customers use, the more they contribute to recovering those costs.
Question: What are the fixed costs (debt service, infrastructure, operations) that must be paid regardless of water volume sold?
City response: Fixed costs in water utility operations are expenses that remain constant regardless of how much water is produced or consumed. These costs must be paid to maintain infrastructure and ensure reliable service.
- Infrastructure Maintenance & Depreciation
- Maintaining treatment plants, pipelines, and pumping stations
- Depreciation of long-term assets like reservoirs and filtration systems
- Debt Service
- Repayment of loans or bonds issued to finance capital projects such as facility upgrades or new construction
- Salaries and Benefits
- Compensation for permanent staff including engineers, technicians, and administrative personnel
- Insurance and Licensing
- Regular payments for liability, property, and environmental insurance
- Fees for permits and regulatory compliance
- Technology and IT Systems
- Software licenses, cybersecurity systems, and SCADA (Supervisory Control and Data Acquisition) systems used for monitoring and control
- Utilities and Facility Overhead
- Electricity, heating, and cooling for office buildings and treatment facilities
- Training
- Ongoing education for staff to meet regulatory standards
