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for irrigation. As part of its commitment to assist petitioner
in securing approval for the Corpus Christi transaction, the LCRA
tried to induce opponents to withdraw their protests. Some
opponents did withdraw their protests.
In 1998, the LCRA had discussions with Austin regarding the
possibility of a long-term water supply contract that would
substantially increase Austin’s water supply in the future. On
September 17, 1998, Austin and the LCRA signed an agreement that
assured Austin adequate future water supply. On the same day,
after reaching this agreement, Austin withdrew its protest to the
Corpus Christi transaction. The 1998 discussions marked the
first time Austin clearly signified its interest in being a
customer for petitioner’s water, and the LCRA had no assurance
that Austin would sign the water supply agreement with the LCRA
until the agreement was executed.
On October 7, 1998, effective as of October 3, 1998, the
TNRCC approved petitioner’s applications for the Corpus Christi
and LCRA transactions. On January 7, 1999, the Corpus Christi
transaction for 35,000 acre feet closed, and on January 8, 1999,
the LCRA transaction for the remaining 133,000 acre feet closed.
On its books and balance sheet, the LCRA was required to
record the water right at fair market value by generally accepted
accounting principles. The LCRA had informally agreed to the
purchase price before knowing what the fair market value of the
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