City's power firms agree to pass on 'bonus' profits

The environment minister has hailed a "breakthrough" in a revised scheme to regulate the two power companies, although they refused to lower their profit ceiling.

Wong Kam-sing said the bright spot in the mid-term review of the scheme of control was agreement by the companies to return to society "bonus" profits earned from energy savings.

CLP Power and Hongkong Electric will use the bonus earnings to set up an Energy Efficiency Fund that will help non-commercial buildings - in particular single residential blocks - set up energy-saving systems.

"This has been a big breakthrough for both suppliers … It means they will now use financial rewards earned from energy savings and pass them on to society," Wong said.

But a government energy adviser said that he expected the review to have little, if any, effect on power bills.

Under the scheme of control, which limits the utilities' earnings to 9.9 per cent of the value of their fixed assets, they can earn extra profits by meeting energy-saving targets. Previously they kept the money, which has added up to HK$85 million in the past four years.

Wong said he expected the new fund to garner up to HK$100 million in the next five years.