The adjustment of the electricity tariffs of the two power companies for next year was unveiled yesterday (28th), with the basic electricity price of CLP increasing by 3.1% year-on-year, and the basic electricity tariff of HK Electric also increased by 4.4% year-on-year; However, net tariffs decreased by 7.4% and 16% year-on-year respectively due to the decline in the Fuel Adjustment Charge, marking the second tariff reduction for the first time in eight years. According to the statistics of HK8, the cumulative increase in the basic tariffs of the two electricity companies in the past five years has been 01.5%, outperforming the inflation rate and the cumulative growth rate of GDP in Hong Kong in the past five years.
Some scholars believe that the hope that by introducing competition or buying electricity from the mainland to suppress electricity tariffs will "not work", with the introduction of more clean energy, the basic electricity price will only get higher and higher, and the focus is on the high electricity tariffs to stabilize the electricity supply, otherwise the cost of power outages for Hong Kong will be greater.
Mid-term Review of the Two Power Plants|Xie Zhanhuan: Electricity Tariff Adjustment with Penalty Mechanism Added for Large-scale Power Supply Interruption Incidents|Overall Net Electricity Tariff Reduction HK Electric's Basic Electricity Tariff Increases by 4.4% and CLP Increases by 3.1%
The electricity tariff consists of the basic tariff, which covers the operating expenses, standard fuel costs and profits of the power company, and the fuel fee is reimbursed, and the power company will charge the difference between the actual fuel cost and the basic fuel cost through the fuel price adjustment clause account.
"HK01" calculates that the basic tariff adjustment of the two electricity tariffs from 2020 to 2024 shows a cumulative increase of 4.4 sen in CLP, an increase of 5.4% in five years. HK Electric's cumulative growth reached 77.17 cents, an increase of 5.5% over five years.
Looking back at the overall inflation rate in Hong Kong over the past five years, the Composite CPI has continued to rise from 5.2019 in 99 to 6.2023 in 105, representing a cumulative increase of 3.5 or 5.68% over the past five years. As for the gross domestic product (GDP), the cumulative growth rate in the past five years was about HK$5,70 million, an increase of 5.796%. In other words, the cumulative increase in HK Electric's basic electricity tariff over the past five years has been about 58.2 percentage points higher than the inflation rate and about 8.5 percentage points higher than the GDP growth rate.
According to the information released by CLP and HK Electric, their capital expenditure in the next five years will be $5.529 billion and $220 billion respectively. CLP only said that it would support the accelerated development of the economy and infrastructure to maintain a reliable power supply, but expected the average basic electricity price to rise to $2028.1 per kilowatt-hour in 044, while HK Electric said that it would build a natural gas unit to replace coal-fired units and build transmission and distribution stations. The two power companies had earlier said that the development of 200 megawatt offshore wind farms in the southeast waters of Hong Kong and the construction of offshore wind farms in the southwest waters of Lamma Island would be included in the next five-year development plan, but yesterday neither mentioned the expenditure involved. The two power companies forecast that the average annual growth rate of basic electricity tariffs from 2025 to 2028 will be similar to the projected inflation rate of about 2 to 3%.
▼11/27 Sham Shui Po after sunset▼
The Scheme of Control Agreement signed between the Government and the two power companies stipulates that the permissible rate of return of the power companies is 8%, but the results of yesterday's mid-term review did not touch it. The Secretary for Environment and Ecology, Mr Tse Chin-wan, said yesterday that since the relevant agreement will only be completed in 2033, the government cannot unilaterally change the permitted profits without the consent of the two power companies.
Zhuang Tailiang, an associate professor in the Department of Economics at the Chinese University of Hong Kong, said that electricity is not necessarily a good thing, and if there is a power outage in Hong Kong, the cost is higher, so power stability is the goal. He bluntly said that power companies are not as good as other companies that can be changed at any time, and it is not feasible to open up the electricity market and introduce competition to suppress the increase in electricity tariffs. He pointed out that since the two power companies have control over the transmission and distribution networks, other power companies build their own networks, which is expensive and basically impossible.
Chong Tailiang, associate professor of the Department of Economics at the Chinese University of Hong Kong, said that it is not feasible to open up the electricity market to introduce competition to increase the voltage of electricity. (File photo/Photo by Lu Yiming)
As for the Government's purchase of electricity or energy imports from the Mainland, will it help to reduce the basic electricity tariff? Mr. Chong believes that buying electricity from the mainland is not necessarily cheaper, and it is difficult to ensure that clean energy meets Hong Kong's standards, and the cost needs to be recalculated. However, as the government has "environmental requirements" for power companies, it will inevitably increase costs and the basic electricity tariff will become higher and higher.
Zhuang Tailiang said that although the allowable rate of return is set at 8%, the two power companies can earn more returns by expanding their assets. In addition, Liangdian is a listed company, and ordinary people feel that Liangdian makes too much money, so they can buy shares to get a piece of the pie. Whether the two power companies make too much should be compared with the ratio of profits earned by other industries.
Electricity tariff adjustment|Lin Jianfeng: I can't reduce the allowable profit of the two electricity by 8% I hope to respect the spirit of the contractElectricity tariff adjustment|CLP and HK Electric basic electricity tariffs are added to the new penalty mechanism for power outage accidentsElectricity tariff adjustment|Scholars expect the basic electricity price to increase in the future Fuel adjustment fee may not continue to be adjusted downward|How much money does each household pay? Ordinary three-person families are expected to pay $40 less per month for electricity bills, electricity bill adjustment|On the eve of the announcement, the two electricity outlets will support grassroots measures, and each will allocate more than 5000 million cash coupons