Subsidies to reduce sting of surge in power rates

Top News | Jane Cheung 11 Dec 2019

Power firms CLP and Hongkong Electric will raise their tariffs for the second year in a row, but will have measures to offset the hikes for households and small businesses.

From January 1, CLP will increase tariffs 2.5 percent to HK$1.22 per unit - from HK$1.18 - while HK Electric will be up 5.2 percent to HK$1.26 per unit, from HK$1.20.

Secretary for the Environment Wong Kam-sing said the government's electricity subsidy scheme announced last year will offer each household HK$3,000 - HK$50 a month over five years - to compensate for tariff increases.

Financial Secretary Paul Chan Mo-po announced in August an electricity fee subsidy of HK$2,000 for each eligible household and said last week businesses can also apply for a 75 percent exemption on electricity charges for four months, with a ceiling of HK$5,000 each month.

Wong said: "We are concerned about the business situation of small and medium enterprises. Therefore, we have also requested the two power companies to show more support to businesses, especially small and medium-sized enterprises."

The utility giants announced subsidies yesterday to almost 400,000 SMEs - 320,000 from CLP and 70,000 from HK Electric - that will offset the tariff increase from January to June.

Wan Chi-tin, managing director of HK Electric, told the Legislative Council panel on economic development yesterday: "SME caterers are one of the hardest-hit trades under the current economic downturn and their electricity expenses are generally higher than that of other SME sectors."

HK Electric expected the annual electricity expenses of almost all customers will be lower next year while over 30 percent of residential households will not pay any.

Chiang Tung-keung, managing director of CLP, said: "Hong Kong is facing unprecedented challenges as a result of the recent social events and global economic downturn and its economy is expected to weaken further in the coming year."

CLP will offer HK$200 million relief measures for businesses to alleviate electricity cost derived from an increase in the use of cleaner natural gas. The power giant in charge of electricity supply in Kowloon, New Territories and outlying islands will also allocate HK$20 million for a four-month program to subsidize 100,000 underprivileged households including elderly, subdivided unit residents and low-income families to dine at small and medium eateries.

It will spare HK$7 million for subdivided flat tenants who do not benefit from the government's electricity subsidy.

Some 10,000 households will each receive HK$600 while CLP will continue to sponsor landlords to install individual electricity meters for subdivided units.

HK Electric will offer similar dining coupons of HK$500 each for eligible households and tenants of subdivided units.

It will provide cash subsidy of HK$60,000 for each nongovernmental organization customer to arrange catering activities for the underprivileged.

William Yu Yuen-ping, chief executive of World Green Organization, said it is necessary to switch from coal to natural gas for cleaner energy, but it is also important to strike a balance between the cost and tariff.

"The economy is not good at the moment. Citizens rely on supporting measures from the government to survive the tariff hike," he said. "The government has to supervise the two power companies to search for cheaper sources of natural gas."

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