A head of about 122 m. (400 ft.), available between stages I and II power house of Koyna and the outfall into Vaitarani is proposed to be used in Koyna stage III, mainly to meet the high power demands of peak hours. This essentially involves temporary storage of the water available in a 24-hour cycle. In the first design proposed, the lakes at Mankarwadi and Boladivadi are used for this storage. The question posed by the Koyna authorities was, what should be the levels in Mankarwadi and Boladivadi basins for the best utilisation of available water for the fair and monsoon seasons without spill, at the start of the 3rd stage power house, and how the levels will fluctuate during operation. This is sought to be answered in the sequel. The corresponding analysis for the 2nd design, in which the lake at Mankarwadi is not used is given in Part II. In Part III, the analysis for the 2nd design is done, taking into account the flow of water in the free-flow tunnel from 1st and 2nd stage power house to Boladivadi. It was found as a result of this study that some of the restrictions on lake levels imposed initially could be done away with, resulting in a saving of about 1.5 m. (5 ft.) head daily. The main modification suggested in Parts I—III is a slight shift in the position of the peak-hours in the 24-hour cycle. The optimum value of this shift naturally changes with the design studied.