(GP/GT) for Additional Water Supply in the Lower Rio Grande

factors, utility costs, cash flow, operating costs, and profitability. Each of these
categories, among others, is fully discussed in Appendix A.
The selection criteria for the ten sites included the following
considerations: presence or absence of an existing industry, market, climate,
availability of pertinent data, and geographic diversity. The ten locations
chosen for the study are: Tucson, Arizona; San Diego, California; Denver,
Colorado; Boston, MassachUSetts; Flint, Michigan; Kansas City, Missouri; Las
Cruces, New Mexicoi Columbus, Ohio; Scranton, Pennsylvania; and Dallas,
Texas. The geographic diversity of the ten sites allows for the calculation of
differing production levels, operating costs, and selling prices to help evaluate
profitability in different regions.
The analysis strongly indicates that new installations for cut-flower
rose production are profitable in several areas in the United States Southwest,
particularly in New Mexico, Arizona, and Texas. No one area stands out as a
favored location. Las Cruces, New Mexico, has the highest net present value
and return on investment results. Two areas outside of the Southwest,
Scranton, Pennsylvania, and Columbus, Ohio, also show a positive
investment opportunity. Both of these areas are favored with low electricity
rates that help reduce annual operating costs. Both Scranton and Columbus
are vulnerable to electricity price increases to an extent not shared by the
Southwest locations.
The level of uncertainty in critical assumptions precludes absolute
statements of which location is the "best," or most profitable. A new firm
will wish to carefully evaluate individual sites on a case-by-case basis before
selecting a location. See Table la for a comparison of the various sites.
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