CLP Power is delaying for two more years a plan to increase the generating capacity of its Black Point power plant.
The decision, which will cost the firm $360 million, was forced by over-estimates of the demand for electricity. It brings the total bill for the inaccurate forecasts to almost $1 billion.
The agreement, reached by the Government and the company and endorsed by the Executive Council last week, means the installation of units 7 and 8 will be delayed until 2005 and 2006 respectively at a cost of $90 million per unit per year.
CLP Power has already paid $592 million to the supplier for a delay from 1997 to 2003 and 2004 due to the over-estimate.
The total cost is now $952 million.
A spokesman for the Economic Services Bureau said the Government had studied the possibility of yet another deferral, but this was impractical because the contract with the supplier allowed for a maximum five-year delay.
The cost of cancelling the units was close to the installation cost.