Electricity companies to reveal new tariffs
Power utilities Hongkong Electric Holdings and CLP Holdings are expected to announce their tariff plans for next year to a cross-party panel of legislators tomorrow.
Analysts expect Hongkong Electric to raise tariffs by about 5.6 per cent but to also offer a 1.6 per cent rebate, meaning customers would be paying 4 per cent more.
They said CLP Holdings would probably freeze tariffs and distribute up to HK$500 million of its development fund as a rebate to its customers.
Both suppliers were expected to implement their new tariff structures from January 1.
Unionist legislator Lee Cheuk-yan yesterday said he expected both firms to unveil tariff plans at an economic services panel meeting scheduled tomorrow.
As a courtesy, the power utilities will inform the Legislative Council of tariff increases, if any. But they do not need Legco's approval.
The power utilities are governed by the Scheme of Control agreement, which allows a maximum 15 per cent return on fixed assets.
The agreement is designed to ensure a stable supply of electricity, stable tariffs and to guarantee a return to utilities on their investments.
Neither supplier commented yesterday on their tariff plans.
Electricity regulator, the Economic Services Bureau, said discussions with the two power firms had almost been concluded.
Every December, CLP and Hongkong Electric submit to the bureau their revised financial data for the past year and a tariff plan for the coming year.
This year, with the local economy in the doldrums, the outcry by legislators against tariff increases by any of the energy or transport utilities has been louder than ever.
Economists at UBS Warburg and fund management firm Franklin Templeton Emerging Markets have warned that any government interference in the scheme of control agreement would sour Hong Kong's reputation as a free economy.
A Hongkong Electric official said it was under pressure to raise tariffs next year for two reasons: it had accelerated construction of the Lamma power plant extension and the development fund was running low.