Corpus Christi projects water emergency onset in September

A Level 1 emergency for Corpus Christi ? indicating its water system is 180 days from supply not meeting demand ? is now projected for September, which would trigger a recommended 25% curtailment in use, according to a presentation to the city council on Tuesday.

Previous projections had a water supply emergency hitting the Texas city as soon as May, in November, or never.

"Staff is working every single day for this not to happen," Nicholas Winkelmann, Corpus Christi Water's chief operating officer, told the council.

He said the latest projection is based on several factors, including no inflows from rain events, a 20% curtailment from the Lake Texana reservoir starting in August, and projects bringing additional supply, while excluding a 24 million gallons-per-day Evangeline groundwater project, which is facing challenges to its permits.

City officials have said $1 billion of projects aimed at producing 76 million gallons of water daily are underway. Long-term projects being explored involve seawater desalination.

The council will vote on various recommendations in the presentation, including the proposed 25% curtailment from baseline usage for residential, commercial, industrial and wholesale customers of Corpus Christi Water, the primary water supplier for a seven-county region, which is experiencing stage three drought conditions that triggered water-use restrictions.

Ongoing water woes led Moody's Ratings last week to place the city's bond ratings under review for potential downgrades for the second time in seven months.

Moody's previous review, which began in September, led to downgrades in December, with the city's general obligation and sales tax revenue bond ratings dropping to A1 from Aa2 and its combined utility enterprise bond rating falling to A1 from Aa3. The lowered ratings were assigned negative outlooks.

Earlier this month, Fitch Ratings revised its outlook on Corpus Christi's AA issuer rating to negative from stable, citing "heightened uncertainty from the city's elevated water supply risk."

In October, both Fitch and S&P Global Ratings placed negative outlooks on their AA-minus ratings for Corpus Christi's utility system revenue bonds.