Subject: MSEB Cash Flow and Tariff after 5 year hiatus
From: [email-masked]
To: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Cc: [email-masked], [email-masked], [email-masked], [email-masked]
Date: Tue, 6 Feb 2001 05:00:00 -0800 (PST)

Attached below please find the cash flow/tariff increase study we discussed 2 
1/2 weeks ago at the Sunday DPC strategy session.  The study assumes a 
decrease in losses from 40% to 25% and an increase in collection efficiency 
83% to 92% from 2000-01 to 2006-07.  Further, it is assumed that only one 
block of DPC operates until 2006-07.  

Two scenarios based on average realisation are illustrated:

1. A realistic cash flow study and  accompanying tariffs.  Given the above 
assumptions and assuming there is no state subsidy in 2006-07, MSEB should 
have a cash flow deficit of R34 Cr. in 2006-07 when Phase II comes on line 
for sale to MSEB, given a reasonable annual tariff increase.  (See the tariff 
sheet in gray shaded area.)  The annual rate increases would be15% for LT and 
HT agriculture and LT public water works, a 10% increase for domestic, street 
lights and interstate sales, a 4% increase for LT industrial and powerloom, 
and 1% increase for LT commercial and HT industrial, public water works and 
railways.

2. The annual tariff increases needed for MSEB to break even with a 3% 
profit, assuming industrial and commercial classes are held flat, are 
detailed below.  (See the Tariff sheet in red.) 
 
 Domestic          8%
 LT Public Water Works    35.60% 
 LT Agriculture and Poultry   26% 
 Street Light     10.8%
 HT Agricultural & Poultry    26.9%
 Mula Pravara Electric Coop Soc.  24.30% 
 Interstate sales       6.5%

It is obvious that  even the more realistic scenario would require strong 
MSEB, state government and regulator resolve.

In a separate e:mail I will describe the cost of service study we have also 
developed for MSEB.  
---------------------- Forwarded by Jane Wilson/ENRON_DEVELOPMENT on 
02/06/2001 11:08 AM ---------------------------

Heidi Hellmann

02/06/2001 09:43 PM

To: Jane Wilson/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Ban Sharma/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 

Subject: Latest Model/Summary

Jane,

Attached is the latest summary (hard coded numbers, like I sent before) and 
the latest cashflow model in case that is required for anything.

Just to confirm all that has changed are the customer categories and the MU's 
in 1999-2000.