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A drought in South Texas caused Moody’s Ratings to downgrade the city of Corpus Christi, which projects demand for water will outpace supply by the spring of 2027.

The ratings company lowered the city of roughly 320,000 people to A1 from Aa2 and also cut its utility revenue bond rating to A1 from Aa3. The Gulf Coast municipality roughly 400 miles (640 kilometers) south of Dallas has about $2 billion in debt outstanding.

City Manager Peter Zanoni said in a Friday statement that the city is “fully committed to aggressively addressing the need for water supply diversification.”

Related: Texas Drought Threatens Industrial Hotspot for Exxon, Koch

Corpus Christi’s city website says it is in an “urgent” drought, and residents aren’t allowed to water their lawns. The city is trying to shore up its water supply and stave off what’s known as a Level 1 water emergency, which is when the city is 180 days away from when the total water supply isn’t enough to meet the total water demand. Its website says it’s about a year away from that scenario.

The city, which has benefited from the Permian Basin oil and gas boom, previously halted plans for a desalination plant that would help address the issue, sparking criticism from the governor’s office. In addition to water-use restrictions, the city is also working to increase the capacity of a pipeline and is developing groundwater resources, its website says.

Photo: Construction in Corpus Christi, Texas. (Eddie Seal/Bloomberg)

Topics Texas