Jake's View
PUBLISHED : Thursday, 15 August, 2013, 12:00am
UPDATED : Thursday, 15 August, 2013, 3:31am

Little benefit from greenies' call for CLP subsidies

The power company is responsible for providing reliable electricity supply and not help people pay for more energy-efficient appliances


Jake van der Kamp is a native of the Netherlands, a Canadian citizen, and a longtime Hong Kong resident. He started as a South China Morning Post business reporter in 1978, soon made a career change to investment analyst and returned to the newspaper in 1998 as a financial columnist.

Green groups are calling on electricity supplier CLP Power to dole out HK$300 million in subsidies each year for the next five years to help consumers reduce their energy usage by 1 per cent.

SCMP, August 13

And they want an immediate response, do you hear? All they have heard so far is "a lot of nonsense responses" but they are determined to "take a strong stance". Oh yes, and the money is to come from profits. Otherwise it's not fair.

Let's look at this one from the other perspective.

Just over a third of CLP is held by the founding Kadoorie family and associated interests. I gather the chairman likes fast English cars and slow French dinners but otherwise isn't notable for high living. Most of the family's dividends are reinvested or disbursed to philanthropic causes by the Kadoorie Foundation.

I have always had time for the family. Kadoorie Farm on the north side of Tai Mo Shan, a research station built to help farmers when Hong Kong still had its own agriculture, is now the most beautiful garden for a long, long way in any direction. I was there on a family outing years ago when old Horace Kadoorie came up to pay his last visit to his beloved orchid garden before he passed away.

Aside from the Kadoories, there are more than 20,000 other shareholders, about half of them retail, mostly resident in Hong Kong, and about half of them institutional from around the world. This institutional holding you can safely estimate to represent tens of millions of individuals.

For instance, the Foreign Correspondents' Club, where I have just stepped down from a five-year stint as treasurer, has a small holding of CLP in its reserves. The dividends help, ever so slightly, to keep down bar and restaurant prices for 2,000 members. If you want to give me a hearty laugh, tell me the FCC is a club for rich people.

So what we have in CLP's profits is a very large number of ordinary people in Hong Kong and elsewhere helped to maintain a decent living through pension payments and other small streams of income. We are not talking of Davidoff-sucking, Lafite-swilling tigers in suits. We are talking of you and me.

Take money out of these profits to help people pay for more energy-efficient appliances, as the green groups demand, and how much net benefit have you really created?

If Mrs Chan is given a little extra money to buy a better air conditioner but has less in dividends from CLP to pay for her share of it, how is she better off?

Yes, she may be too poor to be a CLP shareholder. She may live below the poverty line. This is good reason for government to take an interest in her living circumstances and address the problem of growing income disparity.

But that's government's responsibility. CLP's responsibility is to provide a reliable electricity supply to consumers in Kowloon and the New Territories and it already operates under government restrictions to stop it from making an excessive profit from this service.

The thinking of the greenies is flawed anyway. If you want people to be more responsible about energy usage, make them pay more for it. Allowing them to pay less only fosters irresponsibility. In any case, as the chart clearly shows, long-term trends already indicate growing responsibility in energy usage in Hong Kong.

One final question for the greenies: Why is it CLP you always jump on? Why not have a go at Hongkong Electric for a change? On green counts, they may be a better target than CLP.



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