Increases in Hong Kong's electricity tariffs must be kept at reasonable level

PUBLISHED : Sunday, 22 December, 2013, 3:50am
UPDATED : Sunday, 22 December, 2013, 3:50am

The tariff adjustments announced by the two power companies have drawn mixed feelings in the community. Unlike the steep rises in past years, China Light and Power (CLP) is charging 3.9 per cent more in the new year, while Hongkong Electric is imposing a freeze - a pleasant surprise for a public utility. Although the increases are lower than expected, they are still criticised by some as unacceptable. This is not surprising, given the two power giants are making billions of dollars in profit each year.

The news is further overshadowed by the forecast for the coming years. The 1.5 million users in Kowloon and the New Territories will see their bills surge by almost 40 per cent in the next five years, making them higher than on Hong Kong Island, where the freeze is expected to continue.

CLP attributed the steep increases to the need to meet more stringent emission targets in coming years. It has to rely more on gas coming from Central Asia, which is more expensive than the Hainan reserve at present. It expects tariffs to rise by 11.8 per cent in 2015, followed by 7.9 and 6.7 per cent in the following years. Residents can be excused for asking why those on the other side of the harbour are shielded from the hefty increase. Many do not appreciate that their counterparts have been charged more for years, and that the increases triggered by the emission caps are affected by the fuel combination and generation capacity of the companies.

Clean energy comes with a price. The commitment to use less polluting fuels means households have to pay more. But there is a limit to how much the public can afford. It is the government's duty to ensure the increase is kept at a reasonable level. Regrettably, officials have their hands tied because of the 9.9 per cent rate of return guaranteed in a scheme of control up to 2018. Meanwhile, the needy can only count on the power giants' social responsibility to offer more concessions. The government also should help by continuing the power bill subsidies.


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