Power giants given financial incentive to shorten outages

CLP Power received nearly HK$20 million in incentives for supply restoration in 2022 despite a significant power outage caused by a fire in CLP electric cables that year.

The incident, which occurred on June 21, 2022, resulted in a power supply disruption lasting nearly two hours in Yuen Long, Tin Shui Wai and Tuen Mun, affecting approximately 176,000 households.

The Environment and Ecology Bureau, in responding to a question in the Legislative Council from Carmen Kan Wai-mun regarding the power outage incidents, said "all of the electricity supply interruptions above were related to problems with transmission and distribution facilities."

It said CLP had a total of 2,987 power outages that year, with the interruptions collectively amounting to under five million minutes of customer interruption duration, except for the cable bridge fire incident in Yuen Long, which accounted for over 30 million minutes.

As a consequence of the Yuen Long incident, CLP did not receive incentives for supply reliability that year. However, it did receive HK$19.4 million in incentives for supply restoration.

Under the scheme of control deal between the government and power suppliers, CLP and Hongkong Electric qualify for rewards based on their performance in achieving an average grid supply restoration time of less than 65 minutes.

Power companies receive a reward of 0.01 percent of annual revenue for restoring power within 65-70 minutes, while penalties of 0.01 and 0.015 percent are imposed for restoration times within 80-85 minutes and above 85 minutes, respectively.

Another incident on April 19 saw Hongkong Electric hit by a 48-minute outage on Hong Kong Island. By restoring power within 48 minutes, it received an incentive of HK$5.54 million.

In 2022, Hongkong Electric encountered 140 outages, all of which resulted in customer interruption durations of less than five million minutes.

It got HK$9.2 million for supply reliability and an additional HK$9.2 million for supply restorations.

Kan also inquired about the maintenance requirements for the power companies and whether authorities would impose reductions on their operating and financial expenditures.

The bureau said the scheme of control agreement does not specify a specific percentage of resources that must be allocated to the maintenance of electrical equipment.

However, the companies are obliged to ensure there are adequate facilities to meet demand and responsible for their operation and proper maintenance.

"The government has consistently fulfilled its oversight responsibilities under the scheme of control agreements to maintain tariffs at reasonable levels," the bureau said.