Hongkong Electric has proposed a 6.5% net tariff increase next year while China Light & Power has suggested scrapping its rebates to customers.

Speaking at the Legislative Council's Economic Services Panel meeting today, representatives from Hongkong Electric said there is a need to increase power charges due to soaring coal and transport prices.

For 70% of domestic consumers, the rise in net tariff will translate into an additional $13 in their monthly bills. For 70% of non-domestic consumers, the additional payment will be about $136.

Hongkong Electric has agreed to increase its special discount offered to the elderly, handicapped, single-parent families, and unemployed Comprehensive Social Security Assistance recipients from 50% to 60%.

Rebates scrapped

China Light & Power said its basic tariff will stay at the 2004 level and customer rebates will be scrapped. The companies said they must strike a balance between the expectation of the public and their shareholders.

Secretary for Economic Development & Labour Stephen Ip said the Government has asked Hongkong Electric to explore ways to keep the increase as low as possible.

Mr Ip said the Government cannot ignore the Scheme of Control Agreement reached between the Government and the two companies.