Texas built a fund to buy water that does not exist yet. When the House Committee on Natural Resources took up how that fund is working at its Aug. 24 field hearing in Weslaco, the companies that would build the projects filed a common answer: the money is not the constraint. State permitting timelines and a state aquifer study are.
The sharpest complaint came from Seven Seas Water Group, which told Chairman Cody Harris that the Texas Water Development Board is about to lock in pumping limits that make brackish desalination uneconomic before anyone has drilled to find out. The board’s preliminary Trinity Aquifer analysis, presented at an April 29 stakeholder meeting, “proposes individual well production rates of only 75 to 300 gallons per minute … well under half a million gallons a day, in a zone TWDB itself designated for high production,” the letter says.
Those limits rest on what the company calls conservative placeholders — a 20-foot drawdown threshold and median rather than average aquifer-test values — chosen precisely because field data is thin. Seven Seas says the board has acknowledged that new data “may warrant the submittal of BGPZ amendments” later. Its objection is to the sequence. “No developer will invest in exploring a zone whose production ceiling is already set too low to support a viable desalination facility,” the letter says, offering to hand over well-test and water-quality data “at no cost to the state.” The recommendation: direct the board to collect field data from developers before finalizing brackish groundwater production zone limits “so that designations reflect actual aquifer performance rather than conservative, theoretical assumptions alone.”
Two atmospheric-water companies filed the same complaint about a different agency. Tsunami Products told the committee it already has an application pending at the Texas Commission on Environmental Quality to make water condensed from air a permittable public potable source under Chapter 290 rules. Its ask is speed and standing: “Water users need shortened TCEQ review timelines to allow faster access to expanded capacity,” and “TWDB recognition of AWG as sustainable water supply, opening opportunities for grant funding.” Chief executive Stephen Peters framed the technology as an interval, not a replacement — “AWG is the bridge to expand near-term water access, and we need policy to build the road across.” The company said Texas industrial and municipal users are evaluating demand of 250,000 to more than 1,000,000 gallons a day, and that its pricing matrix will not be finalized until the fourth quarter of 2026.
SkyH2O filed a briefing deck making the same case with a legislative menu attached. Terell Jones, the company’s vice president of business development, asked for tax incentives “similar to existing exemptions for rainwater harvesting and desalination,” research money to scale a system under development with Texas A&M Engineering, and access to the water board’s grant programs. The deck also asks for something more basic — separate procurement classifications, on the argument that “AWG is not conventional municipal water and should not be regulated or classified as such.” It cited the Corpus Christi Army Depot, which the company says is already deploying units funded by the Texas Military Preparedness Commission.
Against that, Aqualia filed the packet’s only account of a project moving at emergency speed. Its fact sheet describes a containerized brackish reverse-osmosis plant for Corpus Christi, built as part of the roughly $175 million Nueces Groundwater Program, with Aqualia’s own scope at $43.55 million. The plant is designed for 24 million gallons a day of treatment and up to 21.3 million gallons a day of drinking water, beginning at 3.9 million gallons a day within 11 months, at a treatment cost the company puts at “less than $1 per 1,000 gallons.” It notes the city’s reservoirs had fallen to about 8.5 percent of capacity.
The state’s numbers arrived in a deck filed by Temple McKinnon, director of water supply planning, and Marvin Cole-Chaney, assistant deputy executive administrator for water supply and infrastructure at the Texas Water Development Board. The New Water Supply for Texas Fund, created by Senate Bill 28 in 2023, has $250 million committed to eligible projects. Eligibility runs to desalination, produced water treatment, aquifer storage and recovery, reuse, water acquired from outside Texas, and reservoirs whose permits and land are already secured. The deck draws one hard line: the fund can move groundwater only as part of a qualifying new-supply project such as aquifer storage or brackish desalination, “not fresh groundwater exports alone.”
The board’s showcase is close to the hearing room. The Laguna Madre Water District holds 7,513 acre-feet a year of Rio Grande rights and, by the board’s account, saw demand pass supply beginning in 2025. Its answer is a 5 million-gallon-a-day seawater reverse-osmosis plant with an intake pump station tied to the district’s wastewater outfall, budgeted at $74,655,000 through construction. It is under design.
What the packet does not contain is any measure of how far $250 million has moved the state toward the supply the fund was created to buy. Neither board deck reports a running total of new acre-feet secured, and the committee’s charge asks members to identify impediments — a question the vendors answered with permitting, not price. As The Texas Dispatch reported this month, senators pressing regulators on the produced-water rollout heard a similar account of rules lagging the technology.
No legislation was before the committee and no votes were taken. The filings feed the interim report and the water bills lawmakers carry into the 90th Legislature, which convenes in January 2027.
Also heard
The committee’s other three charges drew nine filings. Regional water planning produced the hearing’s sharpest conflict, with the Texas Farm Bureau and the Delta Lake Irrigation District arguing the process leaves irrigation the residual after municipal reserves are set aside. On agency oversight, the water board reported 682 applications totaling $6.9 billion against its Water Supply and Infrastructure Grants solicitation, $312.5 million to be made available in the next Flood Infrastructure Fund cycle, and 17 canal-lining projects across 12 irrigation districts under review for co-funding with the North American Development Bank. On monitoring of Senate Bill 1169, the North American Development Bank and the Water Finance Exchange described the Rio Grande Valley Public Utility Agency formed by Weslaco, Mercedes, San Benito and Raymondville.
Fact box
Issue
Interim charge on innovative water supply strategies — the feasibility of project types eligible under the New Water Supply for Texas Fund, and the impediments slowing them (8 of 17 filed documents, the largest share; no time estimate is possible without a broadcast)
What happened
Seven Seas Water Group asked lawmakers to direct the Texas Water Development Board to gather field data before finalizing Trinity Aquifer brackish production limits it says are set too low to support a viable plant; two atmospheric-water companies asked for shorter TCEQ review timelines and formal state recognition of the technology as a water supply; Aqualia described a containerized brackish desalination plant for Corpus Christi starting at 3.9 million gallons a day within 11 months; the water board reported $250 million committed under the fund and detailed a $74.7 million seawater desalination project for the Laguna Madre Water District; no vote (interim hearing)
When
Monday, Aug. 24, 2026, 10:00 AM CT · run time not published; no broadcast was made
Where
Legislative Chamber, Weslaco City Hall, 255 S. Kansas Ave., Weslaco
Chair
Rep. Cody Harris, R–Palestine (HD-8); Vice Chair Rep. Armando Martinez, D–Weslaco (HD-39)
Key filings
Temple McKinnon and Marvin Cole-Chaney (Texas Water Development Board); Seven Seas Water Group; Aqualia; Terell Jones (SkyH2O); Stephen Peters (Tsunami Products); Texas Commission on Environmental Quality
Archived video
None — the hearing was not broadcast. Documents: committee handout packet (PDF)