Garwood Irrigation Company - Page 10

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          ability to move water throughout the State to spur growth.  There           
          was also opposition to interbasin transfers because of the                  
          potential for restraint of economic growth within certain areas.            
          As a result, before the 1997 session began, it was unknown what             
          the legislature would do regarding water rights.                            
               D.   Petitioner’s Unused Water                                         
               As of the valuation date, 68,000 acre feet of water flowed             
          unused past petitioner’s diversion point into the Matagorda Bay             
          each year and did not generate any income for petitioner.  A                
          35,000 acre-foot portion of this was involved in the Corpus                 
          Christi transaction.  This left 33,000 acre feet of petitioner’s            
          water right unused.  Under petitioner’s certificate, the 33,000             
          acre feet of unused water, as well as the 100,000 acre feet of              
          irrigation water, were authorized to be used only for                       
          agricultural use, and only in petitioner’s service area.  There             
          was a reasonable probability that at some point in the future,              
          the unused water could be converted to municipal or industrial              
          use, inside or outside the Colorado River Basin, which would make           
          the water more valuable, but such a conversion would have                   
          required time, money, and regulatory approval.  A transfer of               
          petitioner’s unused water out of the Colorado River Basin, after            
          the transfer of 35,000 acre feet to Corpus Christi, would have              
          increased the likelihood that inbasin users would be impaired and           
          that inbasin development would be impeded.  If petitioner applied           

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