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CLP Power warns of 'turning point'

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CLP Power is facing 'unprecedented pressures' to raise its tariffs to cover the cost of rising gas prices, new infrastructure and meeting tighter emissions targets, a top executive at the utility said yesterday.

Richard Lancaster, managing director of the city's biggest electricity provider, which supplies Kowloon, the New Territories and Lantau Island, said the company was still negotiating with the Environment Bureau over the tariffs for next year.

But he warned of 'unprecedented pressures' to increase tariffs - now at about HK$1 per kilowatt hour for residential use - given obligations to meet emissions targets through wider use of natural gas, which is more expensive.

'I think we need to recognise that we are at a turning point with electricity supply,' said Lancaster, referring to the 2015 emissions targets for local power plants. 'We need to comply with air-quality targets. To do so we need to use more natural gas.'

He said natural gas now cost two to three times what CLP currently paid under a 20-year-old contract with a Hainan reserve.

CLP has said supplies at that reserve are running out and it will have to turn to Central Asia for natural gas, which would be piped to Hong Kong via the mainland.

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