Hong Kong power firms, General Chamber argue for status quo for electricity market
HK Electric, General Chamber say any government move to open up the electricity market would compromise safety and reliability of supply
The city's two power utilities and the biggest business chamber want the government to keep the current regulatory regime governing the electricity market, warning that opening it up would be risky.
HK Electric, the latter of the two main power suppliers to submit its views to the government's three-month consultation on the development of the electricity market, said there was absolutely no case for making any rash changes that would "jeopardise achievements".
The results of the consultation, which ends today, will help pave the way for how the electricity market will be regulated after the 10-year scheme of control arrangement between government and suppliers expires in 2018 and its impact on tariffs.
"It remains the company's conviction that the current [scheme] with its clear and proven track record continues to be the best way forward for Hong Kong," said HK Electric managing director Wan Chi-tin. CLP Power took a similar stance in its submission last week.
Wan said the scheme provided a degree of stability for the utilities and should be in place for 15 years as the current 10-year duration was insufficient for effective planning. The scheme caps the annual return for the two suppliers - the amount of money they can make - at 9.99 per cent of net fixed assets. The government wants to lower this to 6 or 8 per cent after 2018. But HK Electric said this would "only bring about uncertainties".
"The current level of permitted [return] needs to continue to create the right environment for power companies to make long-term investments in electricity infrastructure," said Wan.
