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The headquarter of CLP Group (China Light & Power), an electric company based in Hong Kong. Photo: Shutterstock
Opinion
Editorial
by SCMP Editorial
Editorial
by SCMP Editorial

Electric nightmare for Hong Kong consumers

  • The city’s two power firms can and should do more to help businesses and households in this time of economic uncertainty by reducing charges

Hong Kong households and businesses are at the mercy of the two power companies and the government when it comes to tariff adjustments. Around this time of the year, they wait anxiously for an announcement on how much the electricity bills will rise under the notorious scheme of control, which guarantees the companies a certain amount of return for investing further in the power industry.

To the relief of many, the charges for 2021 are to be frozen. Welcoming as it is, the companies should do more under the prevailing economic circumstances.

Closer scrutiny of the details reveals a different picture. The basic tariffs of CLP Power and HK Electric are to increase by 1.5 cents and 7 cents respectively, only to be offset by reductions in fuel costs. The decisions, revealed in a Legislative Council meeting last Tuesday, had been questioned by politicians from across the political spectrum.

Electricity is a significant fixed cost of business and living. For decades, the oligopoly of the two power giants puts customers at a disadvantage. They could only turn to the government to mitigate the impact of adjustments. In a typical lacklustre response, the environment chief told lawmakers that the government had already asked the companies to keep the impact on customers to the minimum.

Hong Kong power firms freeze rates, but lawmakers say subsidy still needed

The public can be excused for feeling unimpressed – the outcome seems little more than a numbers game.

The government is in a weak position when it comes to monitoring utility charges. This is not helped by the much-criticised profit guarantee scheme.

Officials have provided electricity subsidies in recent years to help relieve the burden on households and businesses affected by economic downturns. This is the least the government can do when it fails to put in a place a better tariff adjustment mechanism. But the subsidies also have been called into question, as it is essentially using taxpayer money to benefit profit-making utilities.

A once-off subsidy of HK$2,000 announced in August last year is set to expire next month, prompting calls for an extension of the relief measure, or an overall reduction in power bills. Earlier the government echoed calls for major landlords to cut rents as an act of solidarity amid adversity. The power giants can certainly do more.

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