LCQ19: Collection of electricity and water charges by landlords from tenants of inadequate housing
A survey report has revealed that over 80 per cent of tenants residing in inadequate housing (including sub-divisions of flat units (commonly known as sub-divided units), caged homes, bedspaces, cubicle apartments or rooftop structures) were overcharged by their landlords for use of water and electricity given that the latter had not installed separate water and electricity meters for them. The median water and electricity charges paid by the surveyed tenants to their landlords were $12 per cubic metre and $1.5 per unit respectively, both of which are higher than the maximum rates chargeable under the progressive charging mechanism in respect of water and electricity consumption. The survey results have also revealed that the high water and energy expenditures brought adverse impacts on various aspects of the livelihood of those tenants (including physical and mental health as well as child development). In this connection, will the Government inform this Council:
(1) whether the Census and Statistics Department (C&SD) will expeditiously include, in the General Household Surveys conducted regularly, the gathering of the relevant data on the monthly expenditures on water and electricity of tenants in inadequate housing and the respective percentages of such expenditures in their total expenditures; if C&SD will not, of the reasons for that;
(2) given that the Supply Rules of the two power companies have stipulated that customers must not supply or share with any third party electricity obtained from the power companies without the written consent of the power companies, or else the power companies may disconnect their power supply to the customers concerned, whether it knows if the two power companies will investigate into the situation of their customers reselling electricity without their consent to the tenants in inadequate housing for profit, and take follow-up actions in accordance with the Supply Rules; if the two power companies will not, of the reasons for that; and whether the Government will enact legislation to set penalties for such acts; if legislation will be enacted, of the details and the implementation timetable; if not, the reasons for that;
(3) given that regulation 47 of the Waterworks Regulations (Cap 102 subsidiary legislation A) stipulates that no person may, without the permission in writing of the Water Authority, sell water from the waterworks, whether the Government will amend legislation to raise the penalties for contravening that provision; if it will, of the details and the implementation timetable; if not, the reasons for that;
(4) whether the Government will enact legislation to stipulate that (i) landlords of inadequate housing must install separate water and electricity meters for their tenants, or (ii) such tenants may apply on their own, without the consent of their landlords, to the Water Supplies Department and the two power companies for the installation of separate water and electricity meters upon presentation of proof of their residential addresses; if it will, of the details and the implementation timetable; if not, the reasons for that;
(5) whether the Government will, prior to the enactment of the legislation mentioned in (4), implement interim measures to ensure that tenants in inadequate housing will not be overcharged by their landlords for use of water and electricity; if it will, of the details and the implementation timetable; if not, the reasons for that;
(6) given that the two power companies are required under the Scheme of Control Agreements to offer Fuel Clause rebates to their customers when their Fuel Clause Recovery Accounts record a surplus, in order to reduce the net tariff, but tenants in inadequate housing often cannot benefit from such rebates since they are not registered customers of the two power companies, whether the authorities will enact legislation to stipulate that the two power companies must disburse such rebates directly to the electricity end-users (including tenants in inadequate housing); if they will, of the details and the implementation timetable; if not, the reasons for that;
(7) given that the two power companies previously introduced concessionary tariff schemes to assist the grassroots, whether the authorities will include provisions in the new Scheme of Control Agreements to be signed with the two power companies in the future, requiring the two power companies to offer concessionary tariff schemes for tenants in inadequate housing; if they will not, of the reasons for that; and
(8) whether the authorities will set up a subsidy scheme for energy expenditures under the Community Care Fund to provide families in need (including tenants in inadequate housing) with subsidies on water and electricity expenditures, with a view to alleviating the financial pressure of those families; if they will, of the details and the implementation timetable; if not, the reasons for that?
With information from relevant policy bureaux and the two power companies, my consolidated reply is as follows:
In 2016, the maximum residential net rates of the CLP Power Hong Kong Limited (CLP) and Hongkong Electric Company Limited (HKE) are $2.01 and $1.849 per unit respectively; they are higher than the median electricity charge of $1.5 per unit paid by the surveyed tenants to their landlords as stated in the question.
(1) The Census and Statistics Department (C&SD) conducts the General Household Survey to collect information on the employment, unemployment and underemployment situation of the Hong Kong labour force for timely release of related statistics every month. To avoid affecting the release of the statistics, C&SD considers it not appropriate to collect from the survey additional information on household expenditure such as electricity charges and water charges.
(2) Under the Supply Rules signed between the two power companies and their customers, customers shall not supply or share with any third party electricity obtained from the power companies without the prior written consent of the power companies. The two power companies will follow up and investigate reports on suspected cases of resale of electricity and overcharging the use of electricity. If there is concrete evidence that a customer is involved in reselling electricity to a third party, the power company concerned will require the customer to stop breaching the Supply Rules and take appropriate action in accordance with the Supply Rules. The power company will consider disconnection of power to the customer under the Supply Rules if the breach continues. However, before taking action, the power company will also consider if disconnection would jeopardise the tenants ultimately and deprive them of electricity supply.
The Supply Rules set out the terms of the service contracts between the two power companies and their customers. As the power companies are commercial organisations, it is not appropriate to enforce the Supply Rules by legislation.
(3) Regulation 47 of the Waterworks Regulations (Cap 102A) stipulates that:
"(1) Subject to subregulation (2), no person shall, without the permission in writing of the Water Authority, sell or offer for sale water from the waterworks.
(2) Subregulation (1) shall not apply to a consumer of an inside service who recovers the cost of water from any person-
(a) who occupies the premises in which the inside service exists; and
(b) who uses in such premises water which is supplied through the inside service."
Pursuant to Regulation 51 of the Waterworks Regulations, any person who contravenes Regulation 47 shall be guilty of an offence and shall be liable on summary conviction to a fine at level 3, the current amount of which is $10,000. The Government has no plan at the moment to amend the penalty concerned. On the other hand, pursuant to Regulation 47(2), the landlord can recover the cost of water from the tenant in such premises who uses water which is supplied through the inside service of the landlord. Such cost of water is not confined to charge of water in the water bill. It can also include other costs incurred, such as the cost of maintenance and repair of the inside service paid by the landlord. The cost payable by the tenant to the landlord can be stipulated in the terms of tenancy agreement between them.
(4) On electricity supply, the power companies will install individual meters for customers if prior consent from landlords and building management has been obtained, and that the units concerned comply with the relevant prerequisites and safety standards such as installation of an individual door, and the separate electrical installations and other facilities can meet the safety standards stipulated in the Electricity Ordinance (Cap 406) (the Ordinance) and requirements of the Supply Rules of the power companies. If the rental premises are sub-divided units equipped with electrical installations and separate meters, landlords' consent will be required to modify the existing electrical installations to meet the safety standards stipulated in the Ordinance and the requirements of the Supply Rules before individual meters can be installed. In addition, meters must be connected to the riser which supplies electricity in a building and be installed in the common areas to facilitate meter reading by the staff of the power companies. Therefore, before applying for individual meters, tenants of sub-divided units should identify suitable locations in the common areas of the buildings for installing meters and obtain the consent of building management for allocation of space for meter installation. Given the various site constraints and safety considerations, it would not be practicable to mandate by statute the provision of individual meters for tenants of inadequate housing.
As regards installation of water meters, if the relevant unit has a proper postal address to ensure that letters from the Water Supplies Department (WSD) such as notices and water bills can be posted to the occupier, the occupier may apply for a separate water meter from the WSD. The following factors will also be taken into account by the WSD when processing the applications:
- Whether the premises can be accessed without passing through any area occupied by others to ensure that the Water Authority can enter the premises directly for inspection or carrying out other relevant duties in case of any problem of the inside service;
- Whether the premises have proper drainage systems to ensure that no flooding will occur in case of inside service fault; and
- Whether the application satisfies the requirements of the Waterworks Ordinance. For example, the applicant is required to accept responsibility for the custody and maintenance of inside service, and submit the plumbing proposal in respect of the inside service etc.
The WSD will follow the established procedures to handle applications for water meter and it is not necessary to enact a new law for this purpose.
(5) Before entering into a tenancy agreement, landlords and tenants 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, landlords and tenants should discuss and negotiate an arrangement based on any previous agreement, including oral agreement. Tenants may use the enquiry service provided by the Rating and Valuation Department (RVD). The RVD also offers mediatory service subject to the agreement of both the landlord and tenant.
The collection of electricity charges by landlords from tenants of inadequate housing 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 is not the appropriate tool for resolving the issue.
(6) Whether landlords will raise or reduce tenants' electricity charges following annual electricity tariff adjustments is subject to the provisions in the tenancy agreements concerned. As it principally involves agreements between landlords and tenants, interference by the Government is not appropriate.
(7) The coverage of concessionary tariff schemes is subject to the commercial decisions of the power companies. The power companies have introduced different concessionary schemes to help those in need, such as the elderly and people with disabilities to reduce their burden. The CLP organised the Power Your Love Programme in 2015 and 2016, under which the electricity saved by participating customers was donated to families in need, including households living in subdivided units, to reduce their electricity expenses.
In negotiating with the two power companies on the new Scheme of Control Agreements, the Government will consider whether further assistance may be offered to households in need.
(8) The Community Care Fund (CCF) had received a proposal for providing subsidy on energy expenses to residents of sub-divided units previously. The CCF Task Force had also discussed the relevant proposal. Some members raised the concern that such subsidies might trigger an increase in energy charges collected by the relevant landlords and hence the relevant households could not benefit eventually. The CCF Task Force will continue to launch new assistance programmes taking into account views from the public and stakeholders to support the underprivileged and low-income families.
Ends/Wednesday, January 11, 2017
Issued at HKT 13:30
Issued at HKT 13:30