Experts doubt whether companies are moving too early to meet govt emission standards

As public outrage continues to swell over electricity tariff increases requested by the city's two power companies, some experts say much of the increase may be a product of the companies' efforts to meet lower emissions standards set by the government.

CLP has asked for a 9.2 percent rate hike, larger than the request by Hong Kong Electric, for a 6.3 percent increase.

Experts say the difference between the two submissions is owing in part to a much larger capital investment by CLP in clean energy, with the intent of reducing greenhouse gas emissions.

Questions however are being asked as to whether CLP is moving too quickly to meet the government targets, as consumers and industry get set for a whopping increase in power bills to pay for the upgrades.

Ronnie Hui Ka-wah, a member of the Energy Advisory Committee, was among those who on Thursday questioned the need for increases so large.

He noted CLP's explanation that it needed additional money for higher investment in infrastructure to produce clean energy to meet the government's environmental target. That includes HK$9 billion to construct an undersea pipeline to import natural gas from the mainland.

Still, Hui argued, both electric companies are required to meet the same emission target. Both are required to introduce natural gas for generating electricity. That being the case, he asked, why has CLP submitted a request for a much higher tariff than Hong Kong Electric?

Neither company has been willing to reveal detailed financial investment plans for constructing the infrastructure to produce cleaner energy.

During a Wednesday radio program, Lo Pak-cheong, CLP's corporate development director, said the company cannot provide detailed percentage as to how much does the investment on cleaner energy account for the total markup.

Earlier this year, CLP announced a HK$9 billion budget for installation of cleaning equipment at its Castle Peak Power Station. CLP is also planning to build a HK$7 billion wind farm.

The huge investment raised concern at the time, over whether the public should have to shoulder the heavy cost of building the facilities.

A spokeswoman for the Environment Bureau told China Daily that negotiations between the government and both companies are in progress.

The agenda includes questioning whether CLP's investment may be too early, or whether such increase in investment may be higher than necessary.

andrea@chinadailyhk.com

China Daily

(HK Edition 12/16/2011 page1)