Texas, along with other states and regions of the country, is experiencing an historic drought. In addition to the wildfires that caused billions in damage around the state last year, drought conditions have caused critical water shortages. Small towns and water-intensive industries have been particularly hard-hit. Public sector functions, particularly public utilities, are often the first to feel the effects of water scarcity. The risk quickly moves into the private sector, affecting industries like agriculture and, eventually, any business that relies on running water. Recent reports suggest that much of the private sector has not planned for the risks associated with water scarcity. Businesses that rely on available water may suffer, as may those that invest in utilities and other water-dependent enterprises.
According to the Texas Water Development Board (TWDB), drought conditions currently affect all regions of the state. The various indices of drought conditions, precipitation, and fire risk range from above average to extreme. The Edwards Plateau, which encompasses most of the Texas Hill Country and includes the city of Austin, is experiencing a “moderate” drought on the TWDB’s scale. The crop moisture index for the region is “severely dry,” just below the highest index of “extremely dry,” and the region is at high risk for fire.