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Secretary for the Environment Edward Yau expects the basic tariffs of Hong Kong's two power companies to remain stable over the next five years.
Speaking on a radio talk show this morning Mr Yau said the Government has been performing a "gate-keeping function" when reviewing the companies' development plans.
It has critically reviewed the need, timing and budget of the capital projects and demanded revisions. The two companies have agreed to reduce its originally proposed capital expenditure by excluding some non-urgent or unnecessary projects from their development plans.
On Hongkong Electric's new five-year plan Mr Yau said due to the rise in coal prices the company's average net tariff will only see a 5.9% drop even though it agrees to reduce the average basic tariff by 19.2%.
With the continuing rise in coal price, the two power companies' fuel clause accounts are expected to accumulate a deficit balance of about $1 billion. The fuel clause charge adjustments in the coming years will be affected by the future coal price trend.
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