CLP Power blames rain and slump for sales fall
Wet weather and increased efforts to conserve energy as the economy slows are to blame for a 0.4 per cent drop in electricity sales in the first nine months of this year, CLP Power said yesterday.
The decrease, which has yet to reflect the likely adverse impacts of the financial meltdown in recent months, has clouded the original business forecasts made by the power supplier and might add to pressure for tariff rises.
Instead of modest growth in electricity sales, originally forecast at 1.9 per cent, CLP Power reported a year-on-year drop in sales of 0.4 per cent for the first three quarters of the year.
The 1.9 per cent growth forecast was one of the assumptions used by CLP and the government to set the latest power-tariff plan, running from last month to the end of next year. The plan offered 2 million power users a 3 per cent cut in net basic tariff after taking a doubling of fuel charges into account.
Apart from sales, another assumption was projected annual gross domestic product growth of 4 per cent to 5 per cent, which also looks unlikely in the near term. The worsening economic climate has triggered fears from lawmakers that CLP might have to raise its tariff once the tariff plan expires.
'Even the government has said the worst is yet to come. So if the power sales do not live up to expectations, the tariff will certainly be increased under the current profit regime,' Democrat Fred Li Wah-ming told the Legislative Council's economic development panel yesterday.
CLP Power planning director Chan Siu-hung said the drop in business could be attributed to a number of factors and it would closely monitor the impact of changing demand.
'There have been changes in the economic environment while the energy conservation effort seemed to have apparent impacts alongside the influence of weather conditions.'
A CLP Power spokeswoman said rainy weather in the wettest-ever June hit demand for electricity but initial data showed that sales last month, which was the warmest October on record, had picked up a bit. However, sales were still down for the first 10 months of the year.
Responding to the decline in power sales, Environment Secretary Edward Yau Tang-wah said yesterday he saw no 'exceptional changes' at the moment, although he admitted the economic situation had changed a lot since September.
'It is no easy task forecasting power demand ... there has been an obvious change in the economic conditions since September when we endorsed the new tariff plan.'
Mr Yau said that while the extent of energy conservation would largely depend on the community's voluntary efforts and would affect power sales, CLP would still benefit from major projects to be launched.
The latest power-tariff plan set by CLP Power and the government runs to the end of next year
It offers a 3 per cent discount for this number of users: 2m