CLP Group

Utilities off the hook in tariff row

PUBLISHED : Thursday, 09 February, 2012, 12:00am
UPDATED : Thursday, 09 February, 2012, 12:00am

Environment officials and the city's two power utilities have been spared from having to surrender information used to justify this year's tariff increases after lawmakers last night voted down a motion seeking to invoke their power and privileges to obtain the firms' books and documents.

Lawmakers who supported the motion said that without invoking the power to force disclosure the truth behind the tariff increases might never be fully understood, including whether the government carried out its due diligence study.

Those opposed to the move said it would hurt investor confidence and interfere with CLP Power and Hongkong Electric's business operations by pressing them to surrender sensitive information such as capital expenditure forecasts - which affect their permissible tariffs - and development plan details. The motion was shot down by lawmakers from the functional constituencies, even though it won support from the geographical constituency legislators.

An amended motion, tabled by Liberal Party legislator Vincent Fang Kang, to impose restrictions on disclosing sensitive commercial information when exercising the lawmakers' power, was also voted down.

CLP Power provoked public outrage after proposing a 9.2 per cent tariff rise for this year. Bowing to public pressure, it reduced that to 7.4 per cent and later to 4.7 per cent. Hongkong Electric also cut its original proposed increase, from 8 to 6.3 per cent.

The row was further escalated after Chief Executive Donald Tsang Yam-kuen opposed the tariff rise on his Facebook page, a comment that was 'liked' by almost 6,000 people.

Secretary for the Environment Edward Yau Tang-wah, apparently relieved after the two motions were voted down, questioned whether they had been necessary or helpful.

'What message will it send to Hong Kong business and investors when there is another channel for getting what is being asked for?'

Yau said CLP Power and Hongkong Electric had already tabled 50 pages of information, partly classified confidential, before the Economic Development Panel, to assist lawmakers seeking to understand the tariff review. A closed meeting was held on Tuesday with the two firms.

His position was supported by lawmakers from the Democratic Alliance for the Betterment and Progress of Hong Kong, who found the tabled information useful and believed the existing channels for obtaining information were sufficient for now.

Democrat lawmaker Fred Li Wah-ming said: 'The two power firms are no ordinary business entities. They are public utilities.' He said officials and the firms were reluctant to offer more information until the lawmakers threatened to invoke the power.

Civic Party lawmaker Ronny Tong Ka-wah supported the motion, saying the information tabled by the firms was not sufficient.

Greenpeace said it regretted that the motion had been voted down, saying power demand forecasts were needed to assess whether the firms made excessive capital investments.


Under the regulations, CLP and Hongkong Electric can earn at most a return of this percentage on their net fixed assets value