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Why tariff rise was questioned

Arrogant reply from ENB – an excessively generous binding contract was signed by HK Govt with CLP which lies at the root of this problem.

South China Morning Post

Why tariff rise was questioned

I write in response to the letters from Y. K. Leung (“Tariff rises would power greener city”, December 31) and Thomas Gebauer (“Puzzled by environment chief’s stand”, January 1) on the electricity tariff.

Electricity is a basic necessity to Hong Kong people. A safe and reliable supply of electricity at a reasonable price is vital to our economy.

As power generation is the single largest source of air pollution in Hong Kong, we have taken pains in recent years to tackle it, resulting in a 71 per cent reduction in sulphur dioxide emissions in 2010 compared to 2007. That explains the multiple goals of the government’s energy policy, which centre on safety, reliability, affordability and the minimisation of the environmental impact.

Hong Kong is in the process of shifting to the use of cleaner fuel, including natural gas, for power generation. This means the fuel cost element of electricity tariffs will inevitably increase. However, the electricity tariff review this year differs from previous years in that we could not come to terms with the power companies on the extent of the tariff rise.

In the case of CLP Power (SEHK: 0002), our querying of its double-digit percentage rise in operating costs and premature capital investment, and emphasis on the need to moderate a tariff rise through deployment of the tariff stabilisation fund, were echoed by the community and resulted in CLP’s response: it lowered the increase to 4.9 per cent.

As we work towards cleaner air by improving emission control and increasing the use of cleaner fuel, there is a continued role for the government to exercise due diligence on the power companies’ expenditure and the resulting tariff adjustment. And that is what we have been doing in the past as well as assessing the 2012 adjustment. This is also what the community expects us to do, isn’t it?

Vyora Yau, principal assistant secretary for the environment (financial monitoring), Environment Bureau

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