LCQ4: Electricity charges for tenants of sub-divided units
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Question:
Quite a number of tenants residing in sub-divided units (SDUs) of flats not installed with individual electricity meters have relayed to me that the unit rates of electricity they are charged by their landlords are higher than the tariff rates set by power companies, which has increased their burdens of living. The reason given by the landlords is that the power companies have adopted progressive tariff structures for calculating the electricity charges payable by residential users; if they charge the tenants for use of electricity on the basis of the tariff rates applicable to their actual electricity consumption, the total amount collected will be insufficient to meet the electricity charge payable to the power companies which is based on the higher tariff rates applicable to the electricity consumption of the whole flat. Some concern groups have requested various government departments to address the aforesaid issue, but to no avail. In this connection, will the Government inform this Council:
(1) of the respective powers and responsibilities of various government departments in tackling the issue of landlords of SDUs overcharging their tenants for use of electricity, as well as the progress in following up this issue;
(2) of the laws that the Government may invoke to impose penalties on those landlords of SDUs who have overcharged their tenants for use of electricity; whether it will consider increasing the relevant penalties to enhance the deterrent effect; if so, of the details and timetable; if not, the reasons for that; and
(3) whether the Government will require the power companies to adopt a flat rate for calculating electricity charges for flats with SDUs not installed with individual electricity meters, so as to eliminate the excuse of landlords of SDUs for overcharging their tenants for use of electricity?
Reply:
President,
With information from the relevant policy bureau and the two power companies, namely the CLP Power Hong Kong Limited (CLP) and Hongkong Electric Company Limited (HKE), my consolidated reply is as follows:
The two power companies implement a progressive tariff structure that is applicable to all residential customers. In 2016, the maximum residential net tariff of CLP and HKE was $2.01 and $1.849 per unit respectively. For sub-divided units (SDUs), as a number of tenants are living in one residential flat sharing the same electricity account and meter, the total electricity consumption of the SDUs in the same flat may be higher than that of an ordinary residential flat, and hence the net tariff payable is higher than the average tariff. Whether landlords have overcharged tenants over the use of electricity depends on the total electricity consumption of the flats concerned, and cannot be determined by simply referring to the average tariff.
(1) In respect of tenancy agreements, the Landlord and Tenant (Consolidation) Ordinance (Cap 7) (the Ordinance) deals with matters relating to the rights and obligations of landlords and tenants. The Ordinance does not impose regulations on the level of electricity charges agreed by landlords and tenants. Before entering into a tenancy agreement, the landlord and the tenant should agree on the terms and conditions of the agreement, including the level of and basis for calculating rents and other charges (e.g. water and electricity charges). Once the tenancy agreement is entered into, both parties are required to abide by the relevant terms and conditions. As for charges outside the scope of the written tenancy agreement such as electricity charges, landlords and tenants should discuss and negotiate an arrangement based on any previous agreement, including oral agreement. Tenants may make use of the Rating and Valuation Department's (RVD) free advisory service on tenancy matters.
(2) If a tenant considers that the landlord has overcharged the use of electricity and breached the tenancy agreement, RVD can provide mediatory services subject to the agreement of both the landlord and the tenant. If both parties are still unable to resolve the dispute, they may have to seek recourse to civil proceedings.
The collection of electricity charges by landlords from tenants of SDUs is not just an energy or electricity issue. It also involves the tenancy arrangements between landlords and tenants as well as building structure, etc. Regulating the collection of electricity charges by legislation and imposing penalties is not the appropriate tool for resolving the issue.
(3) As SDUs may involve legal and building safety issues, etc., it is difficult in practice to establish an electricity tariff structure for SDUs that is different from the tariff structure for other residential flats. Besides, as the financial conditions of the households living in SDUs may vary, devising a different tariff structure for them may not be fair to other residential customers.
To assist households living in SDUs, CLP has been working with social welfare organisations, green groups and electrical workers associations since 2014 on the free installation of individual meters for households who have obtained landlords' consent and whose SDUs are equipped with electrical installation that meets the relevant standards. HKE has also explored ways to install individual meters for households living in SDUs.
Besides, in order to help those in need, the two power companies have introduced different concessionary schemes to reduce their electricity expenses. For example, HKE has provided concessionary tariff schemes for application by eligible elderly, persons with disabilities, single-parent families and the unemployed. Beneficiaries are entitled to a 60% discount for the first 200 units of electricity consumed in a month in addition to the exemption from the payment of deposit and minimum charge. Separately, CLP organised the "Power Your Love Programme" in 2015 and 2016 that encouraged customers to save energy and to donate the electricity saved to the disadvantaged and families in need, including SDU tenants, to reduce their electricity expenses. Beneficiaries include recipients of the Comprehensive Social Security Assistance, elderly singletons, persons with disabilities, SDU tenants who are in need, and boarders in special schools. Each beneficiary household will receive a subsidy of $300 to reduce their electricity expenses.
Thank you President.
Ends/Wednesday, March 22, 2017
Issued at HKT 14:40
Issued at HKT 14:40
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