Electricity rates 'to rise by 1 percent'

Staff reporters

Electricity bills will rise by 1 percent in the coming year, sources said yesterday, as the two power companies plan to announce their tariff adjustments today.

CLP Power and Hongkong Electric will announce the adjustments at the Legco panel on environmental affairs.

Sources said they will raise the electricity bill by "slightly over 1 percent," which is a bit higher than they had proposed in their five-year development plan last year.

Currently, net tariffs for both CLP and HK Electric would be the sum of a basic charge and a fuel clause charge, with the latter being adjusted every month to reflect changes in the cost of fuel.

According to the companies' 2024-2028 development plan last November, CLP had projected it would increase its basic charge by 3.8 percent and HK Electric predicted an increase of 3.9 percent.

CLP projected its basic tariff would be up to 100.3 HK cents per unit next year and the average net tariff to be about 144 HK cents per unit.

Meanwhile, HK Electric projected that it would increase the basic tariff to 124 HK cents per unit next year and an average net tariff at some 166.7 HK cents per unit.

After deducting the drop in fuel costs, CLP and HK Electric projected that they would increase the basic charges by 0.7 percent and 0.8 percent, respectively.

But lawmaker Edward Lau Kwok-fan, who chairs the Legco environmental affairs panel, said the exact tariff hike may be "slightly more" than their initial projections.

He explained that the rise in tariffs was due to the "lower-than-expected" drop in fuel costs amid the Russia-Ukraine war and conflicts in the Middle East, but expects it to increase gradually.

Lau added that the rising maintenance cost and increasing investments in new energy are also the reasons for the price rise.

He hopes the Executive Council could perform its duty and appealed to the power companies to consider residents' ability to pay.

Meanwhile, extra penalties for power outages or voltage dips toward power companies do not seem to be on the table, an Executive Councillor told Sing Tao Daily, The Standard's sister publication.

The administration earlier floated the idea of reviewing the Scheme of Control Agreements of the two power companies and introducing a penalty mechanism for "major power supply incidents," which CLP is still considering.

The Exco member said: "Amending the agreements has to be agreed by both the government and the power companies, and it is quite controversial, so I don't think it will be achieved in the short-term."

Many lawmakers claimed that CLP has been reaching out to them from different caucuses to garner opinions, despite the fact that voltage dips cannot be completely prevented.

"But that is not the CLP's fault for not updating the power supply system," lawmakers said.

"It will take a lot of money to massively enhance infrastructure in order to lower the possibility of a voltage dip, and residents will ultimately have to bear the cost."