LCQ8: Bulk tariff customers of CLP

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Following is a question by the Hon Lui Ming-wah and a written reply by the Acting Secretary for Economic Services, Ms Maria Kwan, in the Legislative Council today (Wednesday):

Question :

As electricity tariffs account for a considerable proportion in the operating costs of industrial and commercial enterprises, will the Government inform this Council if it knows :

(a) the proportion of the monthly tariffs paid by the "bulk tariff" group of consumers in the monthly total tariff revenue of the China Light and Power Company Limited ("CLP") at present ;

(b) apart from the inclusion of all public holidays in the off-peak period for bulk tariff consumers, whether the CLP will consider offering other concessions to such consumers; and

(c) whether the CLP will further reduce the bulk tariff so as to lower the operating costs of the industrial and commercial enterprises and facilitate the industrial and economic development of Hong Kong; if so, the details of it; if not, the reasons for that ?

Reply :

Madam President,

Our replies to the questions are set out below :-

(a) According to the information provided by CLP Power Hong Kong Limited (CLP), there are two types of tariff for high consumption non-residential customers, namely the "Bulk Tariff" and the "Large Power Tariff". The average monthly electricity charges paid by these two types of customers last year accounted for around 32 per cent of CLP's average monthly total local tariff revenue, of which payments under the "Bulk Tariff" rate and the "Large Power Tariff" rate accounted for 23 per cent and nine per cent respectively;

(b) CLP has extended the off-peak period to cover the whole day for public holidays with effect from May 1 this year. At present, the off-peak period is from 9 pm every night to 9 am the following morning and includes all day for Sunday and public holidays.

Besides, "Large Power Tariff" customers can also enjoy concessionary charges under the "High Load Factor Rider" and "High Voltage Super Demand Rider" arrangements. The former provides further concession to those who can maintain even consumption pattern persistently through the year, thus enabling CLP to utilise their installed facilities more efficiently. This group of customers may enjoy on average about one per cent extra discount on their electricity charges. The latter is applicable to those with super-large consumption who may enjoy a further reduction in their tariff as the distribution costs for supplying electricity to them are lower. This group of customers may enjoy an average of about six per cent extra discount on their electricity charges.

According to CLP, one of the fundamental principles in their tariff design is that there should be minimal cross subsidy among customers in different tariff groups. Therefore, their tariffs are designed based on cost of electricity supply. Based on this principle, the fact that the Bulk Tariff and Large Power Tariff customers may enjoy lower tariffs reflects the lower cost of supplying electricity to them. For the past year, the average unit tariff of these two types of customers was about 16 per cent lower than that for CLP's other customers.

At present, CLP has no plan to further reduce the tariffs for high consumption non-residential customers.

End/Wednesday, June 30, 1999

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