CLP Group

CLP tariff concession 'still not enough'

PUBLISHED : Thursday, 22 December, 2011, 12:00am
UPDATED : Thursday, 22 December, 2011, 12:00am


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CLP Power yesterday scaled back its plan to raise its electricity charges by an average of 9.2 per cent. Instead it proposes a a 7.4 per cent rise.

But the concession did nothing to appease politicians, who have demanded further reductions.

CLP, the monopoly electricity supplier to Kowloon and the New Territories, is sticking with its plan to charge an extra 5 cents per kilowatt-hour of electricity, but will now increase its fuel-cost levy by 2 cents per kilowatt-hour rather than 3.7 cents. Overall, it will charge 101.1 cents per kilowatt-hour, a third less than Hongkong Electric's tariff for Hong Kong Island and Lamma residents.

To promote energy saving, CLP has left unchanged proposals to charge heavy power users more and scrap bulk discounts for businesses.

Lawmakers remained dissatisfied, saying the increase in charges still exceeds inflation.

'This is just a numbers game, as the basic tariff is not lowered,' said Fred Li Wah-ming of the Democratic Party.

CLP said the adjustment was made possible by carrying a larger deficit in its fuel clause account. The changes will not affect CLP's rate of return but might affect cash flow, as the account's deficit is expected to grow to HK$1.4 billion, a level similar to that borne by Hongkong Electric.

Eventually, this deficit would be borne by CLP's customers and it was only a matter of time before the tariffs rose further, the company said.

Richard Lancaster, CLP's managing director, refused to say whether the utility had bowed to public pressure. Led by Chief Executive Donald Tsang Yam-kuen, the government - which negotiated agreements allowing the power firms almost 10 per cent annual tariff increases - has pressed for smaller increases.

'We understand the tariff increase will have a significant impact on our customers and we have taken extra steps to keep the adjustment as low as we can,' Lancaster said.

Anthony Wu Ting-yuk, chairman of the Hong Kong Chamber of Commerce, was encouraged by CLP Power's response to concerns about the rise's impact on business. But the Federation of Industries of Hong Kong and the Chinese Chamber of Commerce had reservations about the cancelling of bulk discounts and the introduction of a flat rate for business use.

Edward Yau Tang-wah, secretary for the environment, said CLP had taken a step in the right direction.

He rejected criticism that the government was powerless to regulate power firms' tariffs.


Hongkong Electric's price rise for 2012, a smaller increase than CLP's proposed 7.4 per cent