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on the legislators who, in turn, had influence over the TNRCC.
From a political and regulatory standpoint, the sale of 100
percent of petitioner’s irrigation water was too remote to be
considered in this analysis.
Mr. Lloyd did not consider any decline in his analysis. Mr.
Camp predicted that demand for irrigation water would decrease by
20 percent and calculated this decline over 25 years. On the
basis of the parties’ reports and testimony, we find it was
reasonably foreseeable on January 1, 1997, that the demand for
irrigation water would decline 20 percent over the first 10
years. We also find that it was foreseeable on the valuation
date that the need for irrigation would decline an additional 20
percent over the following 10 years, freeing up 1,600 acre feet
of water.
For the most appropriate estimation of value, we use the
average annual income from irrigation water over the 5 years
before the valuation date ($354,837) as a base price. Here, and
in most of our calculations, we shall factor in a 3-percent
inflation rate.3 We then take into account the 2-percent
expected annual decline in irrigation income that we estimated
above, for a net inflation rate of 1 percent. In addition, all
3We do not factor in a 3-percent inflation rate for our
valuation of the Corpus Christi transaction because the option
agreement did not provide for an inflation increase to the base
price of $450 per acre foot.
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