For at least a decade, Corpus Christi sold water to a handful of large industrial plants at a steeply discounted rate, according to documents and interviews with city officials. Residents and businesses paid more than $100 million to subsidize water for some of the world’s richest energy companies, the city’s rate models show.

Three years ago, Corpus Christi doubled the companies’ water rates in an effort to correct the imbalance. But the companies, including Valero, Citgo and LyondellBassell, protested to state regulators, sparking a legal battle that will come to a head today as a public hearing over the matter begins in front of an independent state agency in Austin.

The outcome will have major implications for Corpus Christi, which is facing an unprecedented water supply crisis, as well as the energy companies that have long dominated its economy. If the companies prevail, Corpus could be forced to refund them tens of millions of dollars even as it desperately seeks funding for new water projects and raises rates on the rest of the region’s consumers.

“I’m holding my breath,” said Sylvia Campos, a City Council member who campaigned on raising industrial water rates. “Let’s hope that we don’t have to pay them back.”

Valero, Citgo and LyondellBassell, which buy water directly from Corpus Christi’s water utility to operate oil refineries and petrochemical plants just outside city limits, commented through an industry group they have formed called Affordable Water for Corpus Christi.

“The issue before the Public Utility Commission is whether the City’s rates were developed using a fair, evidence-based and legally compliant methodology,” said Heath Armstrong, a lawyer for the group.

Campos responded: “They know very well how long they’ve gotten away with not paying their fair share.”