Speech at Panel on Economic Development Special meeting

Annual tariff reviews with the two power companies

Electricity tariffs for 2021

Mr CHAN Chun-ying welcomed the tariff freeze and relief measures rolled out by the power companies, especially the measures adopted by CLP on the underprivileged. Noting that the current SCAs of the power companies as well as their five-year development plans (“the DPs”) had been approved by the Executive Council, he enquired whether ENB would use administrative measures to defer the capital investment plans of the power companies so as to slow down the tariff rise in line with the downward trend of electricity consumption.

Deputy Secretary for the Environment replied that the major capital projects under the DPs were for constructing new gas-fired generating units to replace coal-fired generating units scheduled for retirement. Since the related works had been scheduled and planned, the Administration considered it suitable to follow the schedule to achieve the carbon reduction targets. Among other capital projects, the construction of the Floating Storage Regasification Unit (“FSRU”) would only give rise to less than 2% tariff impact in 2021 whereas it would provide a long-term alternative gas supply source to meet the fuel supply needs of the power companies. Other projects such as developing new or enhanced transmission and distribution systems were driven by users’ requirements or local development needs.

Electricity subsidies and relief measures

Mr CHAN Chun-ying said that since 2018, the Government had provided several rounds of electricity subsidies to reduce the pressure on tariffs. However, he was concerned whether such measures had unavoidably encouraged electricity consumption, undermining the efforts on environmental protection. He suggested the Administration review whether electricity subsidy was a suitable approach to solve the problem.

SEN said that with the more rigorous energy conservation efforts in the community, despite the city development, energy consumption had been maintained steadily before the pandemic.