14 Dec. 2010
CLP Holdings Ltd. and Hongkong Electric Holdings Ltd. will raise tariffs in the city by an average of 2.8 percent next year to cover rising fuel costs, company officials said.
The increase will have no effect on CLP’s profitability, Managing Director in Hong Kong Richard Lancaster told city legislators at a briefing on the charges today.
“We’re coming under severe pressure in terms of fuel costs,” Lancaster said. Hongkong Electric also raised tariffs to cover increased fuel prices, Wan Chi-tin, a director of engineering at the utility, told lawmakers.
The price of coal, used to generate about half of Hong Kong’s electricity, has risen about 30 percent this year, according to briefing notes produced by CLP today. The city’s government forecasts a 2.5 percent increase in consumer prices this year.
About 56 percent of CLP’s revenue comes from its operations in Hong Kong, according to data compiled by Bloomberg. The utility also runs power companies in mainland China, Australia, India, Southeast Asia and Taiwan. Sixty-nine percent of Hongkong Electric’s profit last year came from its operations in the city, according to its annual report.
Shares of CLP gained 22 percent this year and Hongkong Electric rose 19 percent, compared with the 7.1 percent increase in the benchmark Hang Seng index.
CLP raised tariffs by an average 2.6 percent last December to fund projects including measures to curb air pollution. Hongkong Electric kept prices unchanged then.