The government tells us that we will pay less for electricity and the extent of the reduction should be in double digits because it has reached a new agreement with the two power companies that gives them a lower rate of return. The total reduction in electricity payments for residential and commercial users could be as much as HK$5 billion annually.
What will the actual reduction be for the likes of you and me? The answer, from the government, is that there will be fuel-cost adjustments, as well as fixed assets and operating costs, to take into account. So, the answer is: 'We don't quite know.' By the way, we have just been told that fuel costs have risen; therefore bills will be higher this year.
The government believes that people want to pay less for electricity. By telling us that it has reduced the utilities' rate of return, it is aiming to reassure people that it has got us what we wanted.
What if the government said to us that its policy goal was to ensure a safe and reliable electricity supply for Hong Kong at the least cost to society as a whole, including environmental and public health costs? Would we say this was not right?
We are used to paying for what we buy, which in this case is kilowatt-hours. However, what we really want is to live and work in comfort. For example, we want to enjoy comfortable indoor temperatures and lighting. At the same time, we want to use less energy because it will not only save money but benefit the environment, too. Moreover, by using less energy, emissions from power plants will be lower and, therefore, less climate-changing gases will be emitted.
There are products that can help us. We prefer energy-saving bulbs, for example, even though they cost more initially. The maths is quite straightforward - during the lifecycle of the lights, we save money. Thus, we support energy labelling of products to help us make better consumer choices.
There are other ways to make significant energy savings. A new building can be designed and built to minimise its long-term energy consumption without trade-offs in comfort. An existing structure may be retrofitted to reduce its energy usage. A production process can be redesigned to increase energy efficiency: the initial cost outlay will be worthwhile if we look at the full lifecycle of the investment. Indeed, the production and distribution of electricity itself can be much more energy efficient: improving energy efficiency is unequivocally cheaper than generating more energy. So, in designing an electricity regulatory system, it would be a good idea to create incentives to be efficient, because there are public health and environmental benefits to be reaped.