The Economic Ripple Effect: How the Genergy Proposal of The WaterNet Could Transform the Future of Texas

                                                                                               04-02-2025, researched by Wolfgang Kovacek

Beyond solving immediate water and energy challenges, the Genergy and WaterNet system will create a transformative economic ripple effect across Texas. From revitalizing rural communities to creating new tax revenue streams, the proposed infrastructure project promises broader impacts that extend far beyond water and power generation. But what would these economic benefits look like, and how realistic are they?

Estimated Financial Benefits for Texas

Texas Direct Revenue Through the Innovative Public-Private Partnership Proposal

Through an innovative Public-Private Partnership (PPP), Texas would own 25% of The WaterNet P3.  Texas receives twenty five percent (25%) or the profit or $44 per acre-foot in Year 1. The 40-Year Water Purchase Agreement for 20,000,000 Acre Feet is also unique because the price per acre foot declines one percent (1%) annually.

The Summary Table (below) shows how the price of water to Texas starts at $1,100 per acre foot but goes down over 40 years to a price of $743.30 per acre foot. The price Texans pay of $1,100 per acre foot the first year drops 32.42% over 40 years while depositing back over $68Bn.

INCOME BACK TO TEXAS TREASURY

Year	Texas Pay $AF	Per Acre-Foot	Annual	Cumulative
1	$1,100.00	$45.89	$917,831,552	$917,831,552
10	$1,004.87	$113.69	$2,273,880,303	$15,261,195,778
20	$908.79	$103.09	$2,061,739,750	$37,406,470,193
30	$821.89	$72.70	$1,454,001,494	$55,687,565,620
40	$743.30	$58.55	$1,171,087,034	$68,648,097,088

The Texas Comptroller of Public Accounts reports that the state’s annual budget is approximately $250 billion. While the WaterNet revenue wouldn’t revolutionize the overall budget, it would provide a substantial, reliable income stream dedicated to water infrastructure – potentially allowing other funds to be redirected to education, healthcare, or tax relief.

The Pew Charitable Trusts’ research on state infrastructure financing has found that dedicated revenue streams are among the most effective approaches for ensuring long-term infrastructure maintenance, a perpetual challenge for most states.

How does this compare to other infrastructure investments?

The American Society of Civil Engineers’ Infrastructure Report Card estimates that Texas needs to invest hundreds of billions in infrastructure over the coming decades. The Genergy/WaterNet approach is unique in that it provides both the needed infrastructure and a revenue stream to help pay for it – unlike most infrastructure projects that require ongoing taxpayer funding.

The Brookings Institution’s analysis of infrastructure public-private partnerships indicates that well-structured PPPs can deliver between 10-20% lifecycle cost savings compared to traditional procurement methods.

The WaterNet delivers more than 50% lifecycle cost savings.

Broader Economic Impact Across the State of Texas

The WaterNet Distributes Economic Benefit to All 254 Counties in Texas

The WaterNet will use major rivers and highways to reach every county in Texas with a totally new supply of water from the sea that will refill aquifers.

The Texas Rural Funders collaborative has documented the economic challenges facing rural Texas communities, including population decline, lack of economic diversification, and limited job opportunities. The WaterNet’s statewide distribution network could potentially address these issues by:

1. Creating Rural Jobs: Unlike centralized power or water plants, the distributed nature of The WaterNet would create jobs throughout rural and underserved areas. The Rural Policy Research Institute estimates that infrastructure projects in rural areas have a job multiplier effect of 1.5x to 2.5x the direct employment.
2. Revitalizing Agricultural Communities: The U.S. Department of Agriculture’s Economic Research Service has tracked the abandonment of thousands of acres of previously productive farmland in Texas due to water shortages. The WaterNet’s ability to deliver affordable water throughout the state is designed to reverse this trend.
3. Enabling New Industries: The combination of abundant water and electricity could attract new industries to areas previously considered unsuitable for development. The Council of Development Finance Agencies has documented how infrastructure investments can catalyze private sector development at ratios of 3:1 to 15:1.

Food Security and Productivity

According to the Texas Department of Agriculture, Texas imports approximately 85% of its fruits and vegetables despite being the second-largest agricultural state in the nation. This paradox is largely explained by water constraints that limit the types of crops that can be grown profitably.

The Food and Agriculture Organization (FAO) has demonstrated that water security is the foundation of food security. With 20 million acre-feet of additional water annually, Texas could:

1. Restore Abandoned Farmland: The American Farmland Trust has documented the loss of productive farmland across Texas due to water shortages. Reliable water supplies could bring these lands back into production.
2. Enable Higher-Value Crops: The Agricultural & Applied Economics Association research shows that each acre-foot of water used for high-value fruits and vegetables can generate 5-10 times the economic value compared to traditional field crops like cotton.
3. Support Indoor Agriculture: Controlled environment agriculture (indoor farming) requires additional energy but can produce up to 10-15 times more harvests per year and 10 – 200 times more food per acre than traditional farming according to studies from Texas A&M’s AgriLife Research Center and hundreds of sources around the world. These operations create year-round agricultural employment.

Tax Revenue and Long-term Economic Benefits

Beyond direct revenue sharing, how would this project impact state and local tax bases?

The Tax Foundation’s research on infrastructure investment indicates that water and energy projects typically generate substantial indirect tax revenue through:

1. Property Value Increases: Areas with secured water and energy supplies typically see property values increase 15-30% compared to water-insecure regions, expanding the property tax base.
2. Business Expansion: The U.S. Chamber of Commerce Foundation has documented that water security is among the top considerations for business location decisions. Enhanced water security could attract businesses that would otherwise locate elsewhere.
3. Agricultural Output: The increased agricultural production would generate additional sales tax, income tax, and business tax revenue.
4. Population Growth: Reliable infrastructure supports population growth, which expands consumer spending and the corresponding tax base.

The Texas Legislative Budget Board’s dynamic economic impact models suggest that infrastructure projects with positive ROI can generate between $0.40 and $1.20 in tax revenue for each dollar invested, depending on the project’s economic multiplier effects.

Sustainability and Climate Resilience

How would this system impact Texas’s climate resilience?

The Center for Climate and Energy Solutions has identified water security as a critical component of climate adaptation. By providing climate-independent water sources, The WaterNet could significantly enhance Texas’s resilience to:

1. Prolonged Drought: The National Integrated Drought Information System has projected increased drought frequency and intensity for Texas as climate changes accelerate. A climate-independent water source would provide critical protection.
2. Extreme Weather Events: The reliability of distributed infrastructure during extreme weather events typically exceeds centralized systems, according to the Resilient Power Project.
3. Agricultural Disruptions: The U.S. Global Change Research Program has documented how climate uncertainty threatens agricultural planning and investment. Reliable water infrastructure reduces this uncertainty, supporting long-term agricultural investment.

A Vision Rooted in Wisdom

As Texas contemplates this ambitious proposal, the guidance from Proverbs 21:5 seems particularly apt: “The plans of the diligent lead to profit as surely as haste leads to poverty.” The Genergy and WaterNet proposal requires careful evaluation against alternatives, but its comprehensive approach to Texas’s interconnected water, energy, and economic challenges deserves serious consideration.

Rather than addressing these issues in isolation, the integrated system offers potential synergies that could transform liabilities (wastewater, water scarcity, energy demands) into assets (clean water, energy production, economic growth). In weighing this opportunity, Texas officials would do well to consider not just the immediate costs but also the long-term economic ripple effects that could benefit generations to come.

Sources:

• Inside Climate News: https://insideclimatenews.org/news/24032025/texas-oilfield-wastewater-treatment-small-nuclear-reactors/
• Texas Comptroller of Public Accounts: https://comptroller.texas.gov/
• Pew Charitable Trusts – Infrastructure Research: https://www.pewtrusts.org/
• American Society of Civil Engineers – Infrastructure Report Card: https://infrastructurereportcard.org/
• Brookings Institution – PPP Research: https://www.brookings.edu/
• Texas Rural Funders: https://texasruralfunders.org/
• Rural Policy Research Institute: https://rupri.org/
• U.S. Department of Agriculture – Economic Research Service: https://www.ers.usda.gov/
• Council of Development Finance Agencies: https://www.cdfa.net/
• Texas Department of Agriculture: https://www.texasagriculture.gov/
• Food and Agriculture Organization (FAO): https://www.fao.org/
• American Farmland Trust: https://farmland.org/
• Agricultural & Applied Economics Association: https://www.aaea.org/
• Texas A&M AgriLife Research: https://agriliferesearch.tamu.edu/
• Tax Foundation: https://taxfoundation.org/
• U.S. Chamber of Commerce Foundation: https://www.uschamberfoundation.org/
• Texas Legislative Budget Board: https://www.lbb.texas.gov/
• Center for Climate and Energy Solutions: https://www.c2es.org/
• National Integrated Drought Information System: https://www.drought.gov/
• Resilient Power Project: https://resilient-power.org/
• U.S. Global Change Research Program: https://www.globalchange.gov/
• Genergy: www.gnrg.us
• The WaterNet: www.thewaternet.com