HK Electric to Offer Two Special Rebates
Tariff Reduction of 17.2% in 2017
Tariff Reduction of 17.2% in 2017
HK Electric today announced that the company would offer two special rebates – “Special Rent & Rates Rebate” and “Special Fuel Rebate” to all its 570,000 customers effective 1 January 2017. Together with other annual adjustments, the Net Tariff for 2017 will be reduced by 23 cents per unit of electricity from 133.4 cents in 2016 to 110.4 cents in 2017, equivalent to a 17.2% reduction. (See table below)
As a result of rising operating costs, a drop in electricity sales and an increase in capital expenditure, the Basic Tariff will be increased by 3.4 cents per unit of electricity. However, a 4-cent “Special Rent and Rates Rebate” per unit of electricity will be provided from January 2017 in order to return to customers the refunds HK Electric has received from Government in respect of the rent and rates overcharged in the past. With this special rebate, the Net Basic Tariff for 2017 will drop to 104.9 cents per unit of electricity.
The Fuel Clause Charge for 2017 will be reduced by 4.5 cents as a result of lower than expected fuel costs. In addition, the 2016 forecast Fuel Clause Recovery Account balance provides room for HK Electric to offer a “Special Fuel Rebate” of 17.9 cents per unit of electricity to all customers next year.
Speaking at a meeting of the Legislative Council’s Economic Development Panel, Mr. Wan Chi-tin, Managing Director of HK Electric, described 2017 as “a rather special year”. Not only will HK Electric be reducing tariff for the second year in a row following the tariff reduction of 1.1% this year, the offer of two special rebates will result in a total reduction of 17.2% for 2017.
Even if the two special rebates are not taken into account, the Net Tariff for 2017 - at 132.3 cents per unit of electricity - will still be 0.8% lower than the 133.4 cents in 2016.
“HK Electric is committed to providing customers with long-term stable and reasonable tariffs. With the tariff reduction in 2017, we will have frozen tariff for two years from 2014 followed by tariff reduction for the next two years over this 4-year period. The Net Tariff for 2017 will be about 8% lower than the 119.9 cents in 2009 when the current Scheme of Control Agreement came into effect,” Mr. Wan noted.
Mr. Wan pointed out that HK Electric would have to increase the use of natural gas for power generation from approximately 33% of the total electricity output at present to around 50% in three years’ time. “This will substantially increase our costs on natural gas from 2020, imposing a huge pressure on tariff. We have to prepare for minimising the impact of future fuel cost increase on our customers,” Mr. Wan stressed.
With the net tariff reduction in 2017, about 70% of domestic customers, i.e., customers who use 500 units of electricity or below a month will enjoy a saving of about $115 or less in their monthly electricity bills. About 70% of commercial customers, i.e., those who use 1,700 units of electricity or below a month will save up to a maximum of $391 a month.
HK Electric will continue to provide the “Super Saver Discount” to encourage energy conservation. Domestic customers using no more than 100 units of electricity in any month will enjoy a 5% discount on their electricity bills. The concessionary tariff schemes to assist those in need will also enable eligible customers – the elderly, disabled, unemployed or single-parent families – to continue to benefit from a 60% discount for the first 200 units each month together with a waiver in the deposit and minimum charge.
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