Power suppliers agree to HK$100m energy-savings fund
CLP and HK Electric will subsidise housing blocks to save energy in a dollar-for-dollar fund but refuse to reduce level of permitted returns
The city's two electricity suppliers have agreed to fork out about HK$100 million in total to help residents of selected buildings save energy, according to a review of the regulatory rules governing both companies.
CLP Power and Hongkong Electric will also change accounting rules that may reduce the size of future tariff rises.
But the companies refused to cut their maximum profit - capped at 9.99 per cent of their net fixed assets - or let the Executive Council vet any fee increases that exceed inflation.
HK Electric also declined to abolish a reward-and-penalty mechanism linked to how well it controlled the emission of pollutants, though CLP agreed to do so.
Dr William Yu Yuen-ping, a member of the government's energy advisory committee, welcomed the revisions.
"The changes are more than expected and some of them are quite positive," he said.
The outcome of the review was reported to the energy advisers yesterday after months of talks between the Environment Bureau and the two suppliers over a so-called scheme of control, a contractual agreement that lays down the rules governing their operations, from tariffs to development plans.
The 10-year agreement will expire in 2018. Before that, all three parties are obliged to carry out a mid-term review together. Any changes must be made by mutual consent.
CLP said the review results showed its strong support of government policy on energy conservation. "We believe the review has met its objective in seeking continuous reviews and improvements in our services."
HK Electric said it had all along taken a pragmatic and reasonable approach in conducting the mid-term review with the government. "We are pleased that it has been completed."
Elaborating on the revisions, environment officials said a dollar-for-dollar fund would be set up to help housing blocks conserve energy.
This Energy Efficiency Fund will draw from financial rewards given to the suppliers for outperforming on energy savings target and audits as set out in the agreement. The two firms combined have received HK$85 million in rewards in the past four years.
Officials estimate the fund can reach about HK$100 million.
Building owners are expected to match the subsidies, subject to a ceiling, offered by the fund. Details of the revised scheme are being worked out now. It will roll out next year.
Greenpeace campaigner Prentice Koo Wai-muk said: "No longer are energy-saving initiatives financed by power users, but by the power firms." Yu cautioned the fund could run out of money if the firms were not serious in meeting the targets.
Apart from savings, the three parties agreed to lower the cap of a tariff stabilisation fund that could provide greater flexibility in imposing smaller tariff rises.
CLP will lengthen the depreciation period of some of its assets, saving about HK$350 million over the next five years.
The suppliers will also improve transparency in tariff adjustments by disclosing more financial and operating data.
Neither backed the bureau's idea to stop allowing emission-control facilities to count towards the maximum profit formula.
The bureau said: "The package of modifications will bring some degree of material benefits to electricity consumers."
