Homes with high power use face 20pc bigger bills

PUBLISHED : Thursday, 15 December, 2011, 12:00am
UPDATED : Thursday, 15 December, 2011, 12:00am

Households in Kowloon, the New Territories and Lantau Island may pay up to 20 per cent more for electricity, though businesses face a tariff increase of less than half that.

The difference arises from CLP Power's revised pricing structure, which would make consumers who use more power pay more. CLP is scheduled to raise tariffs by an average of 9.2 per cent next year, after the environment minister failed to persuade it to impose a smaller increase. But it also intends to tweak the progressive pricing structure for home users.

Under CLP's changes, domestic users would be charged under five pricing bands instead of four. The higher the band, the higher the tariff rate would be, excluding fuel costs that are charged at a flat rate. The new fifth band charges for consumption exceeding 2,600 kilowatt-hours.

The maximum basic tariff would be HK$1.33 per kWh, 35 per cent higher than the existing top rate. The lowest basic tariff would be 76.2 HK cents per kWh, 2.55 per cent less than now.

At the low end, users who consume less than 400 units every two months would see their bills rise 1.8 per cent after taking into account fuel costs. Those who use 400 to 1,000 units face an increase of 6.25 per cent.

But heavy users who consume at least 3,400 kWh could be slapped with a cost increase of as much as 20 per cent.

Talks yesterday between the government and CLP were inconclusive.

CLP also aims to revamp its regressive charging mechanism for business users, which means the more power they use the less they pay per unit of electricity - a policy that does nothing to encourage energy savings.

An executive director of Wharf Holdings - one of CLP's top five customers, said the company might have to increase management fees at its two flagship properties, Harbour City and Times Square.

The electricity bill for the common areas of Harbour City alone exceeded HK$100 million a year, the director said.

One restaurateur said his company was prepared to raise menu prices, as the increase in their monthly electricity bills would probably exceed HK$200,000.

'We feel like we're robbed by the power firms at this difficult time,' said Thomas Wu Chu, managing director of Hsin Kuang, which operates about 30 restaurants. 'They have completely turned a blind eye to social responsibility.'

Wu said the company had seen large rises in rents and wages last year and the new charges would erode what profits it could still manage.

Hong Kong Electric, which serves Hong Kong Island, has proposed an increase of 6.3 per cent.

Small businesses, which make up most of CLP's non-residential users, are currently charged under two bands, with bigger users paying a lower unit price. CLP now proposes charging them at a flat rate regardless of how much power they consume.

That would mean a small business consuming 5,000 kWh a month would pay HK$5,605, a 9 per cent increase over its current HK$5,140 bill.

Bulk users consuming 20,000 units per month would also be charged at a flat rate rather than in two price bands, meaning the unit price they pay would increase by up to 9 per cent.

William Chung Siu-wai, director of the energy and environmental policy research unit at City University, criticised the revisions.

'This is unfair. The tariff structure for bulk users is still not progressive enough, although these users consume much more energy than domestic households,' he said. Households use only 28 per cent of the electricity CLP generates. he noted.

Chief Executive Donald Tsang Yam-kuen called the sharp tariff increases, unacceptable. 'I hope the power companies will reconsider their position and make a wise decision before the end of the year to ensure that they are not causing hardship to Hong Kong people in general,' Tsang said.

The Energy Advisory Committee expressed regret at CLP's proposed price increases and urged both energy companies to 'consider carefully' their impact on the public.

CLP managing director Richard Lancaster has said its proposals are the best offer the firm could make.