Garwood Irrigation Company - Page 8

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          exercised the option.  On March 18, 1993, the TNRCC granted an              
          amendment to petitioner’s certificate, authorizing the change of            
          use for the 35,000 acre feet subject to the option from                     
          agricultural to municipal and industrial use.  In February 1994,            
          the option agreement was amended to extend the period in which              
          Corpus Christi could exercise the option for 2 additional years,            
          to increase the monthly payments to $25,000, and to increase the            
          option payment to $450 per acre foot.  In November 1996, Corpus             
          Christi notified petitioner that it intended to exercise the                
          option.  Upon notification of Corpus Christi’s exercise, the                
          option agreement required petitioner to obtain amendments to its            
          certificate from the TNRCC authorizing an interbasin transfer of            
          the 35,000 acre-foot portion of petitioner’s water to various               
          other basins for Corpus Christi’s use.  The option agreement                
          provided that Corpus Christi could either close the sale or                 
          withdraw from the transaction upon petitioner’s acquisition of              
          the amendment to its certificate.                                           
               As of the valuation date, petitioner had not yet submitted             
          an application for an amendment authorizing the interbasin                  
          transfer.  However, the LCRA had made it known by the valuation             
          date that it planned to oppose the Corpus Christi transaction.              
          In fact, at that time the LCRA had a policy of vigorously                   
          opposing any transfer of water out of the Colorado River Basin              
          and was a politically influential organization.  Its mission was            

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Last modified: May 25, 2011