Hong Kong power companies will see their profits slashed to 6-8 percent of their net fixed assets under new proposals announced Tuesday by the government.
The government wants to cut the permitted return for Hong Kong Electric and CLP Power from 9.9 percent when the 10-year scheme of control agreement expires in 2018, the Hong Kong Economic Journal reported Wednesday, citing Secretary for the Environment Wong Kam-sing.
Also, Wong said a plan to buy electricity from mainland China will be scrapped.
The new proposals call for Executive Council approval for any tariff increase of more than 5 percent and a reduction in the proportion of natural gas in the energy mix to 50 percent from 60 percent.
A three-month public consultation is under way.
Wong said Hong Kong is not ready to open the domestic power market to mainland suppliers, citing a survey last year which showed 90 percent of respondents were opposed to the plan.
Hong Kong Electric and CLP Power welcomed the proposal to cut the ratio of natural gas in the energy mix but market observers said it does not go far enough to promote a long-term policy on renewable energy.
This article appeared in the Hong Kong Economic Journal on April 1.
Translation by Vey Wong
[Chinese version 中文版]
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