CLP wants timely decision on regulatory extension
The city's largest power supplier, reiterating its claim that electricity prices could rise 40 per cent within a few years, yesterday urged the government to make a timely decision on whether to extend its regulatory regime on the scheme's expiry in 2018.
The government has begun an interim review of CLP Holding's scheme of control, which determines the company's permitted return. But the group's chief executive, Andrew Brandler, warned that they would not accept any amendment which was "unfair or one-sided". The company said it would take more than 20 years for a power company to plan for its facilities.
The power company has come under repeated government and community pressure to reduce its tariff hike. CLP's chairman, Michael Kadoorie, has said more than once that they also faced immense pressure as fuel costs surge by 250 per cent in the five years to 2015.
"CLP will be required to use twice the current volume of natural gas, and the cost of this gas will be three times the price of the gas secured 20 years ago," Kadoorie wrote in the company's annual report released yesterday. "This is the equivalent of a 40 per cent increase in overall cost to consumers and will require regular and, at times, substantial tariff increases over several years."
But secretary for the environment Wong Kam-sing said rising fuel costs were a problem for all. "The fuel price increase is a global trend and it is a question we must [all] think about."
An analyst said CLP may propose a big tariff hike next year when the company lifted the use of the expensive natural gas to replace coal.
William Yu Yuen-ping, chief executive of World Green Organisation, said the firm was preparing the public for a future price hike with repeated warnings.
"The public might get numb about the warning and accept a level a bit lower than previously warned," he said.