• Thu
  • Jul 24, 2014
  • Updated: 5:52am
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

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.

jake.vanderkamp@scmp.com

Share

More on this story

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

7

This article is now closed to comments

KwunTongBypass
Agree that the Greenies' idea sucks, but so does Jakes sucking up on CLP. Why to defend an outaded mode of energy supply?
dunndavid
Why do the greenies go after CLP and Hong Kong Electric? There are some things both could do to reduce their emissions, but on balance they do a pretty good job. The real culprits are the power companies across the border. Getting the Chinese power companies to be even somewhat responsible would do far more to help Hong Kong's air than beating on CLP and Hong Kong Electric.
megafun
Greenies call for subsidies are for long term energy savings. In fact, the Government ought to set up their green building fund asap, which allows all existing building owners to obtain finance so as they may reduce up to 80% of their energy consumptions. And, YES, its a reduction of 80%, not 20%, since most existing buildings are wasting energy by having very useless old building facades / envelopes.
KS Wong promised to tackle our old buildings' energy wasste, but hasn't done so. How about at least changing legislation, on Deed of Mutual covenants allowing owners the RIGHT to install energy reduction measures, without objections from the buildings' other owners, and changing the Building ordinace (AP Practice Notes) allowing insulation to be attach onto outer walls.
megafun
BTW, THE GREENIES HAS ALWAYS demanded that electricity costs must go UP, preferrable with some form of carbon tax - so as to encourage investments in clean power. Moreover, I reckon the grid must be open, linked between HK island & rest of HK, and managed by the Government, similar to our roads and drains.
impala
If I were a CLP shareholder, I would urge management to follow this call and spend HKD 300m per year on the said subsidy.

First of all, this would be because being a responsible shareholder and being a responsible company takes into account more than just short-term pecuniary interest and profit maximisation. Shareholders, including the FCC, are also members of society Mr van der Kamp, and they too bear responsibility for common goods like the environment.

That aside, it is mainly a case of choosing between bending now or breaking later. CLP has the chance here to voluntarily use a modest portion of its 3~4 billion HKD pa profits to take its corporate social responsibility seriously, do something good for Hong Kong, and build a partnership with the 'greenies.' Does Mr van der Kamp have any idea of how many people ('greenies') consider pollution a serious problem in Hong Kong?

Or CLP can choose not to. In which case, the pressure from anti-pollution groups and other 'greenies' will intensify, and CLP will -quite rightly- be portrayed more and more as the greedy corporation it is behaving like. Sooner or later (the 2018 expiration of the current monopolist concessions HKE and CLP hold will be key), the government will step in and impose something much more radical than this HKD 300m pa subsidy. A 10% carbon tax for example, bundled with a true liberalisation of the HK energy market, ending the CLP/HKE monopolies. I don't think shareholders will be cheering then.
caractacus
**** Jake.
Again you make people suspect you are in someone's pocket instead of being an independent journalist. CLP as does HK Electric, has a monopoly, in return for which it is allowed to make profits of as much as 15% of its asset value, an amazingly huge profit margin. Add the fact that it been forced to agree to a stinking political deal with a PRC entity to buy all its future fuel supplies at grossly inflated rates instead of buying on the open market, it adds up to corruption on a massive scale, for which HK citizens have to pay. Don't blame the Green groups, they are not the enemy of the people, the tycoons are, supported by a squalid, corrupt political system.
Where has your integrity gone?
maecheung
Property speculators make even a bigger profit margin! Just look at the average flat prices, more than double in the last five years.
 
 
 
 
 

Login

SCMP.com Account

or