Transcript of remarks by SEN
Reporter: You previously said that the electricity bill may fall by 5 per cent under the new Scheme of Control Agreements, but lots of critics said it is unlikely in the long term. The Government has also approved the agreements for the two (power) companies to invest in new natural gas generators. Is what they said true that the electricity bill may not be able to fall by 5 per cent as estimated?
Secretary for the Environment: Let's see the forthcoming situation. As I said in the earlier press conference, what we had said is that, if the other major parameters remain more or less the same based on the change or fall in the rate of return, it is equivalent to about at least 5 per cent drop in the tariff. That is true. But certainly we all understand that given the investment to be made over the years, together with the use of more cleaner fuel, there will be pressure on the increase of tariff. It is in line with what we are talking about.
Reporter: You said that the tariff may be under pressure to rise when the two power companies increase their investments in natural gas generators. So how long will be the time gap in between the fall in electricity bills and the ultimate rise in the bills?
Secretary for the Environment: Firstly, I should clarify that we want to be greener, so there will be more use of gas for power generation and more gas-fired plants. At the same time, I said earlier that many of the existing coal-fired plants are reaching their retiring age, so no matter whether we support a greener investment, we need to have their replacement in order to ensure stable supply of power in Hong Kong. So we need to altogether invest in those areas. It is very clear. At the same time, in order to answer your question, based on the existing mechanism, there will be a five-year plan to be submitted by the power companies later. So that will be a more appropriate period to have more details because you know the fuel cost will be fluctuating over time. So nearer to the time of the five-year plan, there will be more accurate information for the society to understand more about what would be the projected tariff change.
Reporter: Are you saying that, within these five years, the tariff will not increase significantly?
Secretary for the Environment: The intention of the new Scheme of Control Agreements is to help balance, say between the tariff, environmental considerations and stable supply of power. So it will be beneficial to the society as a whole. But at the same time, I think the society support that we want to have cleaner air, to combat climate change, and also to understand that we have to replace the existing plants and invest more in the new gas plants. So all these we have to see in a totality, but the intention of the new Scheme of Control Agreements is to give an overall balance.
(Please also refer to the Chinese portion of the transcript.)
Ends/Saturday, May 13, 2017
Issued at HKT 14:08
Issued at HKT 14:08