CLP Group

CLP Power seeks 2.8pc rise in tariff

PUBLISHED : Wednesday, 23 November, 2011, 12:00am
UPDATED : Wednesday, 23 November, 2011, 12:00am


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The city's biggest power supplier has proposed increasing the electricity tariff by more than 2.8 per cent for next year, citing rising fuel prices and inflation in material costs.

CLP Power, which has 2.3 million users in Kowloon, the New Territories and Lantau, is also reviewing its tariff structure for non-residential users, who have been paying less per kilowatt-hour the more they use.

It is discussing tariffs with the Environment Bureau and is expected to report the outcome next month.

A CLP spokeswoman said obligations to cut pollution and make supply more reliable would require extra investment in infrastructure, aside from inflation. A person familiar with the situation said international prices for fuel such as coal increased by 30 per cent last year, while material costs recorded double-digit growth.

The firm will also have to increase the proportion of gas-fired generation next year, requiring retrofitting to supply and use the gas.

The source said CLP was understood to be seeking an increase of more than 2.8 per cent, the rise it was granted last year, since the basic tariff - which reflects the overhead costs of power generation and transmission - had to be adjusted, too. Last year, the rise was mainly driven by fuel prices.

It would be the second time in 10 years that CLP has adjusted the basic tariff. The last change was in 2009.

Apart from tariff increases, CLP is also considering changes to its pricing structures to address criticism that its existing system does not promote energy conservation, since heavy users qualify for discounts. It is not clear how the structure will eventually be revamped or how commercial users will be affected.

About 1.4 per cent of the heavy users consume about half the power generated by CLP, it is estimated.