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certain than the Corpus Christi transaction. It was unknown what
the 1997 legislature might do, and any resulting legislation
could impede regulatory approval. Although the LCRA was a
potential buyer for the unused water, it was possible that a sale
would not occur. The interruptible nature of petitioner’s water
made it less saleable. This would be a major factor for any
buyer and a municipality would need a backup supply of firm water
for drought periods before it would buy an interruptible supply.
These negative factors, however, must be balanced against
the possibility that petitioner would be able to sell or lease
the unused water to an inbasin user or a politically powerful
municipal user, which would eliminate much of the regulatory
cost, legislative risk, and delay. Taking all these factors into
account, we conclude that the base price of $450 per acre foot
for the unused water should be discounted by 17 percent.
Finally, we must decide how long it might take for
petitioner to sell the unused water. Petitioner would need to
find a buyer, negotiate an agreement, and complete the regulatory
process. The experts and other credible witnesses at trial
estimated that the regulatory process alone could take from 1 to
5 years for an interbasin transfer, before factoring in any court
proceedings. On the basis of the regulatory climate, it was
reasonably foreseeable at the valuation date that any attempted
transfer out of the basin would be opposed by the LCRA and other
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