The Government has appointed an electricity adviser who will spearhead the liberalisation of the power sector. Sources close to the Government said Ben Li had been appointed to the role, and would lead a team of six experts in carving out a framework for Hong Kong's post-2008 electricity market restructuring and regulatory regime next year. Hong Kong's two power utilities - CLP Holdings and Hongkong Electric (Holdings) - are governed by the scheme of control agreement. The agreement, which allows both electricity suppliers to earn a maximum of 15 per cent return on assets in use, is due for review next year and expires in 2008. Mr Li's contract came into effect last Friday. He has worked in the power sector for 26 years and spent several years in Canada. Before taking up his new post, he was a director of market operations at Independent Electricity Market Operator in Canada, which operates and regulates the Ontario electricity market. Sources said the appointment showed the Government might favour the Canadian model of liberalisation over those used in Australia, California and Britain. 'This is primarily because the Canadian model is relatively simple and flexible,' one source said. Ontario wants to transform the monopoly market into a competitive market on May 1 this year, which means electricity will be sold by generation companies and distributed by licensed retailers. Under the existing SAR arrangement, CLP supplies customers in Kowloon, the New Territories and Lantau while Hongkong Electric supplies Hong Kong and Lamma islands. Legislators have asked for an end to tariff increases by Hongkong Electric as the economic downturn continued. They also called for a greater interconnection between the two utilities to lower excess capacity and therefore minimise, they say, the need to raise tariffs. Sandra Lee Suk-yee, Secretary for Economic Services, indicated last month that the Government was open to any suggestions.