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Following is a question by the Hon Fred Li and a written reply by the Secretary for Economic Services, Ms Sandra Lee, in the Legislative Council today (May 15):
Question:
It has been reported that the total local sales of CLP Power Hong Kong Limited (CLP) increased by 2.4 per cent last year as compared with that of the year before, with a 5.3 per cent increase in profit, and its Development Fund having accumulated to almost $3.2 billion. Regarding the tariff charged by CLP, local power demand, the sales forecasts of CLP and the Hong Kong Electric Company Limited, as well as the development projects to increase power supply, will the Government inform this Council whether:
(a) CLP's increase in sales last year was in line with the Government forecasts; and, in view of the substantial amount accumulated in the CLP Development Fund, whether it has considered suggesting to CLP that it should reduce its tariff or provide rebates to its customers again;
(b) it has made projections on the local power demand and the respective sales of the two power companies for the coming three years; and
(c) it has assessed if the long term local power demand would decrease gradually as a result of economic restructuring; if it would, of the rate of decrease, and whether it will request the two power companies to consider deleting or postponing the implementation of some of their development projects?
Reply:
Madam President,
(a) The increase in local sales of the CLP Power Hong Kong Limited (CLP) last year was generally in line with the Government's forecast.
The Scheme of Control Agreement signed between the Government and CLP stipulates the timetable for an annual tariff review jointly conducted by the Government and CLP at the end of each year to determine the tariff for the following year. As the tariff review for the current year has been completed, the Government do not intend to conduct another tariff review with CLP for this year again.
In the annual tariff review, both parties will consider all relevant factors including the latest position of the Development Fund. Of note is that differences between the forecast and the actual sales (including differences arising from short-term economic situation and unusual weather conditions) may have implications on the future tariff, and the Development Fund can be deployed to stabilise tariff. Hence, during the annual tariff review at the end of 2001, when we considered the position of the Development Fund, the Government and CLP aimed to strike a balance between customers' immediate interest and longer term tariff stability.
(b) The Government makes annual assessment on the trend of local electricity demand over the next 10 years. Such assessment normally includes an electricity sales forecast and a maximum demand forecast. The latest assessment was completed in the latter half of last year. According to that assessment, the average growth rates of electricity demand during 2001 to 2010 (with 2000 as the base year) are as follows:
In CLP's In HEC's
Supply Areas Supply Areas
(p.a.) (p.a.)
In terms of sales about 3 per cent about 4 per cent
In terms of maximum
Demand about 3 per cent about 3 per cent
(c) The Government assesses on an annual basis Hong Kong's long term (i.e. over the next 10 years) demands for electricity. Each assessment takes into account the latest trends in local economic development (including economic restructuring) and other factors (such as the number of households) that may impact on electricity demand. The Government estimates that there will be continual growth in the local economy in the next 10 years and that the local electricity demand will increase with economic growth.
To ensure an efficient, secure and reliable electricity supply and based on current data, the Government does not consider it necessary to delete or postpone development projects of the two power companies currently in progress.
End/Wednesday, May 15, 2002
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