An analytical decision model is presented for determining optimal energy extraction rates from hot water geothermal reservoirs when cooled brine is reinjected into the hot water aquifer. This applied economic management model computes the optimal fluid pumping rate and reinjection temperature and the project (reservoir) life consistent with maximum present worth of the net revenues from sales of energy for space heating. The real value of product energy is assumed to increase with time, as is the cost of energy used in pumping the aquifer. The economic model is implemented by using a hydrothermal model that relates hydraulic pumping rate to the quality (temperature) of remaining heat energy in the aquifer. The results of a numerical application to space heating show that profit‐maximizing extraction rate increases with interest (discount) rate and decreases as the rate of rise of real energy value increases. The economic life of the reservoir generally varies inversely with extraction rate. Results were shown to be sensitive to permeability, initial equilibrium temperature, well cost, and well lif