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Council approves long‑term Valero deal to buy city effluent, fund conveyance infrastructure

City Council · January 14, 2026

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Summary

The council voted to approve a 30‑year agreement under which Valero Refining Texas LP will design, build and fund a conveyance system to take reclaimed water from the Greenwood plant and use it for industrial cooling. Valero will convey the built infrastructure to the city once accepted; the project is expected to begin with 3 MGD and scale toward 8 MGD.

The City Council on Jan. 13 approved a 30‑year agreement with Valero Refining Texas LP that staff says will quickly add reclaimed water capacity and reduce demand on potable supplies.

Under the contract, Valero will design, construct and fund a conveyance pipeline and related facilities to take reclaimed water from the Greenwood Wastewater Treatment Plant to Valero’s plant. The initial phase will supply about 3 million gallons per day (MGD) with a potential to reach 8 MGD; Valero’s engineers told council the company expects to spend on the order of tens of millions to more than $100 million for conveyance and storage facilities and will donate the constructed asset to the city after acceptance.

City staff said the agreement will also allow the city to upsize conveyance to serve other industrial users in the future and that Valero will reimburse the city for operation‑related costs while the company uses the conveyance. The council debated an amendment to shorten the contract to five years; that amendment failed, and the 30‑year agreement was approved as presented.

Staff and council members framed the deal as a partnership that will deliver substantial new nonpotable supply in two years while creating a city‑owned asset at the end of construction.

Quotable: "Valero is taking this on a 100%. They're gonna design it. They're gonna construct it ... and then they're gonna give it to the city." — City Manager Peter Zanoni

Next steps: staff will monitor construction and return for any subsequent approvals tied to conveyance acceptance and operational details.