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The Government today (December 30) launched of the Stage II Public Consultation on the Future Development of the Electricity Market in Hong Kong.
The consultation paper released today sets out the proposed framework for the future development of Hong Kong's electricity market after the existing Scheme of Control Agreements between the Government and the two power companies expire in 2008.
Members of the public are invited to forward their views on the proposals and other related matters presented in the consultation paper to the Economic Development and Labour Bureau by March 31, 2006.
A Government spokesman said the proposed regulatory framework set out in the paper had been drawn up with reference to feedback received during the Stage I Consultation. "The primary objective of the proposed framework is to ensure that the public can continue to enjoy reliable, safe and efficient electricity supplies at a reasonable price, and to minimise the impact caused by the production and use of electricity on the environment."
To address concerns raised during the Stage I Consultation, the proposed regulatory framework contains a number of new proposals:
* lowering the permitted rates of return for the power companies to 7-11% for different types of assets;
* shortening the term of the new agreements to 10 years, with an option for a five-year extension after a review before expiry;
* more flexibility for periodic review of the key terms in the agreements;
* new financial disincentives to ensure that the power companies will meet emissions reduction requirements; and
* Encouraging the use of renewable energy.
In addition, the Government will work with the power companies to prepare to enhance interconnection both within Hong Kong and with Guangdong to facilitate power transfer in the future. The Government will also prepare the ground for the future setting up of a separate regulatory authority to oversee technical and economic issues relating to the electricity market.
"We welcome views on the proposals contained in the Stage II Consultation Paper. After the consultation period, we will carefully consider comments received before finalising the regulatory arrangements for the post-2008 electricity market," the Government spokesman added.
The Stage II Consultation Paper is available on the website of the Economic Development and Labour Bureau at www.edlb.gov.hk/edb.
Ends/Friday, December 30, 2005
Issued at HKT 16:03
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