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future. The projected irrigation income was foreseeable as of
the valuation date and must be included in our valuation of
petitioner’s water right.
Petitioner’s average net annual income from irrigation sales
over the 5 years before the valuation date was $354,837. As of
the valuation date, a decline in rice farming in Texas was
expected over the next 50 years as a result of various hardships
imposed by economic and environmental climates. As a result, the
demand for irrigation water in petitioner’s service area was
expected to decline over 50 years. The experts differed on the
expected rate of decline. Mr. Scheig stated that the most likely
rate of decline was .4 percent per year, but he also factored in
a 25-percent chance of a 3-percent rate of decline and a 25-
percent chance of a 100-percent rate of decline. We do not give
any weight to Mr. Scheig’s third scenario (a 100-percent decline
in irrigation use) because, based on the reports and testimony of
the experts in this case, it is obvious that the likelihood of a
conversion of all of petitioner’s irrigation water to other uses
was minuscule. Rice farmers were very protective of the water
they used. The use of petitioner’s water for irrigation purposes
benefited the inbasin users because irrigation returned more
water to the Colorado River Basin than other uses (especially
uses requiring interbasin transfers, which returned no water to
the basin). Rice farmers in Texas also had significant influence
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