Anson Chan Fang On-sang denied yesterday that she had misled Executive Councillors into approving construction of an unnecessary power plant.
She said approval had been based on forecasts of electricity demand by China Light & Power (CLP), now CLP Power, which had proved wrong.
Mrs Chan, Chief Secretary for Administration, was testifying to legislators on a report by the Audit Commission, which criticised the building of the $24 billion Black Point plant.
The commission said Executive Councillors had approved the plant in 1992 without seeing 'low-growth scenario' forecasts.
It said construction of the plant meant CLP had overcharged customers $3.4 billion between 1996 and 1998. The firm has denied the claim.
Under a deal with the Government, the power firm is allowed to set charges to maintain a 13 per cent profit on fixed assets - in effect, the power stations. In simple terms, the more power stations it builds, the more it can charge.