Economic Methodology for South Texas Irrigation Projects - RGIDECON

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Texas Water Resources Institute

A mathematical discourse is provided, documenting the economic and financial methods used in RGIDECON, an Excel spreadsheet capital investment evaluation model focused on irrigation district-level pumping and delivery systems. These methods and the spreadsheet are the basis to ascertaining several measures of performance for the capital improvement investments proposed by irrigation districts relying on the Rio Grande River for their supplies of agricultural irrigation, municipal and industrial water.

Both the approach developed by Texas Agricultural Experiment Station and Texas Cooperative Extension agricultural economists and the procedures used to calculate the required indicators mandated in Public Law 106-576 are presented. Attention is also directed to the process of selecting the discount rate to be used in the analyses for individual irrigation districts' proposed projects.