CLP increases prices after tariff stabilisation fund drops to a low
Power firm defends need for higher bills and promises to continue rate rebates
The increase in power bills for Kowloon and New Territories residents next year can be attributed to the sluggish performance of a CLP Power fund set up to stabilise tariffs, the main power generator explained yesterday.
Corporate development chief Quince Chong Wai-yan said the fund had to be at HK$300 million to have a stabilising effect on tariffs, but it was only at HK$8 million. It is largely funded by electricity sales to the mainland.
The company, which supplies power to the entire city apart from Lamma and Hong Kong Island, announced on Tuesday a 3.9 per cent increase in electricity tariffs beginning next year, at 110.8 HK cents per kilowatt-hour.
Chong said power in Hong Kong was still relatively cheaper than in neighbouring countries. The company would continue rate rebates for customers who consume less energy, she said.
Also on Tuesday, Hongkong Electric announced it would keep its tariffs flat at 134.9 HK cents/kWh and they would remain frozen for the next five years.
Managing director Wan Chi-tin said the company's basic electricity tariffs had risen only two cents since 2009. Basic electricity charges would go up by just 7.1 HK cents next year, he added.
The trajectory suggests CLP's tariff will surpass Hongkong Electric's in 2017, when it will hit 142.6 HK cents/kWh.
But CLP's Chong said the two companies operated differently, arguing that a tariff increase for CLP was necessary to meet future demand for electricity in Kowloon and the New Territories.
Also, with strict emissions restrictions under the scheme of agreement with the government, CLP had to double its use of natural gas to 40 per cent of its energy mix by 2015, she added.
Natural gas being extracted from a rapidly depleting field in Hainan , however, was forcing the company to buy gas from a more expensive source in Central Asia.
World Green Organisation chief executive William Yu Yuen-ping said he was not sure if and how CLP would be able to meet the 2015 target.