“The trend for the next few years will certainly be up, but perhaps waiting for the economy to recover a little more before implementing a double-digit rise would be more acceptable,” said William Yu Yuen-ping, an energy economist and chief executive of the World Green Organisation.Yu had predicted a double-digit increase ahead of Tuesday’s announcement, as the utilities faced greater operating costs due to investments in clean energy facilities and the higher costs of fuel.
Any excess profits are funnelled into the stabilisation fund, and CLP Power and HK Electric have had to draw large amounts from this pool for next year. According to managing director Chiang Tung-keung, the company projected that only HK$900 million would remain in the fund by the end of next year, compared with a projected balance of HK$2.8 billion at the end of this year.
Both companies also maintain separate fuel clause recovery accounts, which draws on the difference between the projected fuel prices set by the companies and the actual cost they pay for the power sources. CLP Power’s has been in the red for many years, while HK Electric’s will fall into a deficit after it draws HK$370 million to cover the cost next year.
Jimmy Kwok Chun-wah, chairman of the government’s Energy Advisory Committee, said on Wednesday it might have been better to spread out the expected increases evenly over the coming years as the pressure to raise prices would only increase.