Dolly knocks out power as it drenches Texas

BROWNSVILLE, Texas (CNN) -- Tropical Storm Dolly has left hundreds of thousands of people without power and forced thousands into temporary shelters in South Texas, federal officials said Thursday.

The weakening storm is expected to pour 8 to 12 inches of rain into already drenched areas of southern Texas. In some places, the storm will drop as much as 20 inches, forecasters at the National Hurricane Center said.

Dolly was downgraded from hurricane status on Wednesday night and is likely to be downgraded further, to a tropical depression, later Thursday, forecasters said.

Isolated tornadoes were possible over south central Texas on Thursday, the center said. There were reports of a possible tornado in San Antonio, Texas, and the National Weather Service issued tornado warnings for the area.

The storm left flooding, power outages and structural damage in several communities in its path, federal authorities said. Watch a tour of a storm-damaged motel »

Bill Bryan, deputy assistant secretary with the Department of Energy, said Thursday that 236,000 people in the affected area were still without power.

He also said 3,000 people were in temporary shelters.

The storm made landfall on South Padre Island in Texas on Wednesday as a Category 2 hurricane and weakened as it moved over land.

At 1 p.m. CT (2 p.m. ET) Thursday, Dolly's winds had weakened to 40 mph, and the center of the storm was over the U.S.-Mexico border, about 30 miles northwest of Laredo, Texas. Dolly had picked up a little speed and was moving at about 13 mph, the hurricane center said.

On South Padre Island, the storm turned some roadways into lakes and tore through buildings and homes.

Rocky Hernandez, who was staying at a hotel on the island when Dolly swept through, said the damage was intense.

"It is horrible," Hernandez said. "Every window in the lobby is all out. Every window in every floor is out. Stuff is all over the floor." iReport.com: Send your photos, videos from Dolly's path

President Bush on Thursday declared that the storm caused a major disaster in Texas, a move that allows the state to receive more federal aid.

Texas Gov. Rick Perry had issued a disaster declaration for 14 South Texas counties on Tuesday before Dolly hit land.

Perry was scheduled to take a helicopter tour of the area on Thursday afternoon, his office said. Watch hotel guests describe the scene as the hurricane hit »

Levees along the Rio Grande appeared to be holding despite the heavy rain, officials told The Associated Press.

"We're not experiencing any issues with the levees right now," Sally Spener, spokeswoman for the International Boundary and Water Commission, told the AP late Wednesday. "The water is just not high enough."

Brownsville Mayor Pat Ahumada told CNN on Wednesday that nearly all of the city's levees have been reinforced to federal standards or above and it would take 20 inches of rain to top them.

"People think we're facing a Katrina," Ahumada said. "That's not the case."

Downed power lines in flooded areas were a danger, officials told the AP, and residents of affected areas should stay home "unless it's life or death," Tony Pena, Hidalgo County emergency coordinator, told the news agency. See Dolly's effect on some cities it passed »

Despite the dangers associated with a hurricane, some people appeared to try to take advantage of what they believed would be the distraction of law enforcement.

Jayson Ahern, deputy commissioner with U.S. Customs and Border Protection, said Wednesday that authorities stopped three groups suspected of engaging in illegal smuggling into the United States from Mexico as the hurricane approached.

CNN's Alex Walker, Barbara Starr, Ed Lavandera, Amanda Moyer and Gary Tuchman contributed to this report.

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