(1)
Scheme of Control
as proposed
(2)
Permitted Return
of 131% on all assets with ESSO
participating
cents/unit
(3) Permitted Return
of 13% on all
assets with ESSO
withdrawing cents/unit
cents/unit
Basic Tariff Increases - 1979
2.0
1980
2.0
2.0
1.5
1981
2.5
2.5
1982
1.0
1.0
1.5
1983
2.5
2.5
2.0
Final Total Tariff Rate
1883
21.03
21.03
20.03
$ M
$ M
$ M
Group Profits
1978
244
244
244
1979
284
278
275
1980
350
335
325
1981
493
465
451
1982
624
591
579
1983
679
637
630
Total Profits for the Period
2,674
2,550
2,504
Development Fund
Balance
1983
374
480
536
4
The results clearly show that eliminating ESSO from any future participation, with a corresponding increase in the Development Fund, would result in a 2.0 cents per unit increase in 1979 which could otherwise be delayed until 1980.
As regards paragraph 2(b): the financial plan, as presented, was based on a number of assumptions. For these assumptions to remain reasonably valid, even in changing circumstances, some allowance had to be made in their formulation for possible extreme situations. So, in favourable circumstances, the Company may be expected to effect reductions in expenditure or beneficial modifications to plans. The financial plan annexed to memorandum XCC(77)87 should be regarded mainly as an indication of the likely tariff trends and financing arrange- ments of CLP over the 6 year period and should not be read as a state- ment of the final tariff and financing position. In any event the Govern- ment officials concerned are quite confident that the CLP management
CONFIDENTIAL #2
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