Hong Kong’s two electricity companies — Hong Kong Electric and CLP Power — will reduce their tariffs from January 1, 2024. While the basic tariffs charged by both companies will increase by a maximum of 4.4%, the net tariffs will reduce by as much as 16% from next year.
During a Legislative Council panel meeting on Tuesday, Tse Chin-wan, Secretary for Environment and Ecology, revealed that basic tariffs will go up because of capital investment and cost escalation — 4.4% for Hong Kong Electric and 3.1% for CLP. “However, due to a recent drop in international fuel prices, the resultant 2024 net tariff will be reduced compared to January 2023, that is by 16% for Hong Kong Electric and 7.4% for CLP respectively,” said Tse.
The net tariffs charged by both companies have two main components: the basic tariff and fuel charge. Under the new tariffs, HK Electric — which provides power to Hong Kong Island and Lamma Island — will raise its basic rate to 119.5 cents per kilowatt-hour, and lower the fuel charge to 46 cents per kWh. CLP — which is responsible for serving Kowloon, the New Territories, and most of the city’s outlying islands — will increase its basic tariff to 96.6 cents per kWh, and decrease its fuel charge to 46.3 cents per kWh.
The secretary added that the basic tariffs for the 2025-2028 period are projected to increase at an average annual rate of about 2%-3%, in line with the inflation rate. In addition, he said the average annual increase in net tariffs is projected to be not more than 2%, provided that fuel prices remain stable.
Deputy Secretary for Environment and Ecology Millie Ng Kiang Mei-nei further explained that during an interim review conducted by the two power companies, it was decided that Hong Kong Electric and CLP will introduce certain changes to assist users affected by energy crises and large-scale power outages.
According to Ng, if there is a “persistent surge in fuel prices [caused by] geopolitical tensions, natural disasters, or unforeseeable market volatility leading to an increase in the total tariff of more than 20% for Hong Kong Electric or more than 10% for CLP… a special tariff relief will be provided to the most needy user households.” In addition, there will be a new penalty scheme for major power failures by which the rate of return can be cut by 0.015%-0.03%, depending on the number of users impacted and how long the power outage is.
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