Bloomberg News

CLP Starts Hong Kong Power Tariff Review Talks as Costs Rise

November 23, 2011

Nov. 23 (Bloomberg) -- CLP Holdings Ltd., Hong Kong’s biggest power supplier, said it has started talks with the city’s government to review electricity prices for next year as project spending rises and fuel costs increase.

Spending on new generating units fired by natural gas and upgrading of existing infrastructure to cut emissions will add “strong pressure” on current tariffs, CLP said in an e-mailed reply to questions yesterday. Daily operating costs, including fuel purchases, have also risen because of inflation, it said.

CLP may announce next month a tariff increase that exceeds inflation to counter higher fuel prices and the cost of building a new gas pipeline, Radio Television Hong Kong reported yesterday, without saying where it got the information. Consumer prices rose 5.8 percent in October from a year earlier, exceeding the median forecast of eight economists in a survey compiled by Bloomberg.

The utility was allowed to raise tariffs by an average of 2.6 percent in January 2010 to help fund projects including measures to curb air pollution and greenhouse-gas emissions.

The shares have risen 29 percent since the beginning of last year, compared with the 3 percent gain in the benchmark Hang Seng Index. CLP fell 0.4 percent to HK$69.15 as of 9:38 a.m. local time.

--Editors: Ryan Woo, Amit Prakash.

To contact the reporter on this story: Guo Aibing in Hong Kong at aguo10@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.


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