Balance of power

On Hong Kong and Lamma Island, with the new tariff increases at 6.3 per cent for this year, consumers pay Hong Kong Electric about HK$1.31 per kWh of electricity. In Kowloon and the New Territories, with CLP's tariff increase of 4.9 per cent, it's 98.7 cents per kWh, so just under a dollar can buy you an hour of warmth from a 1,000-watt heater.

Meanwhile, electricity users across the border in Shenzhen pay HK$1.05 per kWh, even though their living costs are generally lower overall. And Hongkongers still pay significantly less for electricity than people in London, Tokyo, New York, and Singapore.

So why is it that the tariff increases this year spurred so much public pressure, leading CLP Power in particular to eventually lower its tariff to almost half the original proposed rise of 9.2 per cent?

It may be an old power story newly alight with the momentum of other anti-corporate protests at Occupy Central and Dolce and Gabbana in the past several months. And at least in this case, the protests of the public clearly influenced the outcome.

But Hongkongers shouldn't bask in this win, warn environmental groups and policy gurus. Under our current schemes of control, agreements between our two power companies and the government first set up in 1968 and revised in 2008, the power companies can still legitimately raise their tariffs in the coming years under a profit clause that grants a certain percentage of return on their investment. For now, it's 9.99 per cent, down from the original 13.5 per cent to 15 per cent of guaranteed profit.

Actually, according to industry experts, the recent lowered tariff increase means that the power companies are not even getting their full 9.99 per cent quota this year, though of course they are still seeking - and getting - rebates on rent and costs from the government.

This is to make up for their purported loss after recently switching from coal-burning to more environmentally friendly natural-gas-burning plants - which are twice as expensive - and renewable energy. These costs are passed onto the user in increased electricity prices. And in Hong Kong, the power companies themselves have no incentive to promote energy efficiency because they profit regardless.