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Utility says power rate rise won't be that bad

CLP says power rate rise won't be as bad as forecast

Electricity supplier CLP Power has confirmed that the rate of increase in power tariffs will be "far lower" than that forecast in a five-year report submitted to the government last year.

CLP Group

Electricity supplier CLP Power has confirmed that the rate of increase in power tariffs will be "far lower" than that forecast in a five-year report submitted to the government last year.

The utility, which supplies power to Kowloon and the New Territories, has submitted its tariff increase proposal to the government and will announce the finalised rates next month.

The firm had last year projected an 11.8 per cent rise for 2015, in its five-year development plan submitted to the Environment Bureau.

CLP managing director Paul Poon Wai-yin said the scaled-back rise was mainly due to savings from a drop in coal prices.

But he would not disclose whether the increase would be lower than inflation. Tariffs went up 3.9 per cent to HK$1.10 per kilowatt-hour this year.

"Coal prices have dropped about 15 per cent this year, so after some work, we believe the tariff increase can be far lower," Poon said.

HK Electric, which serves Hong Kong Island and Lamma, has pledged to freeze tariffs for five years until 2018.

But Poon said fuel cost pressures, mainly from pricey natural gas, would still be the main driver of continually increasing power tariffs.

Measures have been implemented to ease the price pressure, including sourcing less natural gas from the mainland's second West-to-East Pipeline and extending the lifespan of the fast-depleting Yacheng reserve off Hainan for another one to three years.

Gas from the pipeline is three times more expensive than Yacheng.

The news comes as the company aims to double electricity generated from natural gas to comply with tightened government emissions caps next year.

"At the moment, natural gas makes up about 10 per cent of the mix. This will increase to about 30 per cent," Poon said.

Meanwhile, the company will introduce an energy saving initiative next summer that will let customers transfer their electricity savings to deprived families in need.

This article appeared in the South China Morning Post print edition as: Utility says power rate rise won't be that bad
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