CLP Group

Rates commissioner sued by CLP over failure to pay refunds

PUBLISHED : Thursday, 01 November, 2007, 12:00am
UPDATED : Thursday, 01 November, 2007, 12:00am


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Hong Kong's largest power company is taking the government to court over the rate payments for its premises used for electricity supply.

CLP Power and its subsidiary Castle Peak Power submitted a writ to the High Court on Tuesday suing the Commissioner of Rating and Valuation for not refunding the 'overpayment' in rates charged over the past 10 years.

The plaintiffs 'are entitled to be repaid by the defendant all amounts of rates and government rent in respect of the tenements comprising the electricity generation, transmission and distribution system owned and occupied by them ... in excess,' the writ says.

No amount is specified in the writ.

In earlier appeals to the Lands Tribunal, the plaintiffs challenged the rate valuation methods used by the commissioner.

The methods were based on estimates of the revenues, operating costs and profits expected from the operation on the tenements of an electricity supply business.

The plaintiffs state that the commissioner shall refund any overpayment of rates if the appeals are successful. But the appeals may not be heard until 2009 or even later. The commissioner is entitled 'to order that payment of a part of the rates as assessed shall be held over pending the determination of an appeal, but he has not exercised that power', the writ says.

This month, the government threatened to regulate power companies by passing a law if negotiations on the terms of a new agreements are not completed this year.

Environment minister Edward Yau Tang-wah told lawmakers a contingency plan was needed because time was running out.

The existing agreements have been in force since 1993 and run out next year. The new ones will run for 10 years, though a provision will be made to extend them for five years.

The government proposes that the new agreements state the electricity supply market will be thrown open to other parties in or after 2018 if 'the requisite market conditions are then present'.

It is also proposing to lower the power firms' permitted rate of return on net fixed assets to less than 10 per cent a year, compared with the 13.5 per cent to 15 per cent the existing agreements allow, and to link firms' permitted returns to compliance with caps on emissions of pollutants.