HK Electric to freeze 2010 tariffs

HK Electric will freeze tariffs for 2010 despite anticipated rising fuel costs to help Hong Kong recover from the financial crisis.

HK Electric's Managing Director, Mr. Tso Kai-sum said that the average net tariff will be kept at US$0.1546 per unit of electricity in 2010, including an average basic tariff of US$0.1219 and a fuel clause charge of US$0.0328 cents per unit.

In January this year, HK Electric's electricity tariffs had been reduced by an average of 5.9 percent when the new Scheme of Control Agreement took effect. This is against the background of double-digit tariff increases recorded in some overseas electricity markets during the year.

Mr. Tso remarked that the Company has committed to gradually reduce emissions in power generation by increasing the use of natural gas. Gas-fired generation is expected to double from about 15 percent of the Company’s total output to 30 percent in 2010. As the price of gas is higher than that of coal, fuel costs are expected to continue rising next year, posing a big challenge to the Company's operation.

"In spite of this, we have decided to freeze electricity tariffs across the board for all domestic and commercial customers. We hope this will help Hong Kong recover from the financial crisis while minimising the impact on our customers," Mr. Tso said.

Mr. Tso reiterated HK Electric's confidence in meeting the 2010 emission targets laid down by the government. Apart from using more natural gas, additional flue-gas desulphurisation plants and low nitrogen oxides burner for coal-fired units will continue to be put into service next year to reduce emissions.