Dec. 30 (Bloomberg) -- CLP Holdings Ltd., Hong Kong’s biggest electricity supplier, reduced its planned price increase for the second time in two weeks following criticism from the city’s government.
The utility will raise prices by 4.9 percent starting Jan. 1, compared with the 7.4 percent increase proposed last week, Betty Yuen, vice chairman of CLP Power Hong Kong Ltd., the generation unit, told reporters in Hong Kong today. CLP said Dec. 16 it has no room to lower a planned 9.2 percent increase.
Hongkong Electric Co., the city’s smaller power supplier, on Dec. 15 scrapped its original proposal of a 6.3 percent raise after a public outcry and revised its increase to less than 5 percent for most households. Hong Kong Chief Executive Donald Tsang said Dec. 14 the increases were “not acceptable” amid accelerating inflation and that power companies shouldn’t be “causing hardship to Hong Kong people.”
“The final package is the result of extensive discussion with the government,” Yuen said. “We believe the government will find this package acceptable.”
CLP is able to reduce the proposed increase by cutting operating costs and cancelling planned capital expenditure for capacity expansion, Yuen said.
The shares rose 0.8 percent to HK$66.05 in Hong Kong trading as of the midday break, compared with the 0.4 percent gain in the benchmark Hang Seng Index. Power Assets Holdings Ltd., the parent of Hongkong Electric, advanced 0.7 percent.
Inflation may accelerate to 5.2 percent this year, the fastest pace since 1997, according to an official estimate in November. Financial Secretary John Tsang rolled out electricity subsidies and a waiver of property rates in his February budget to help residents cope with rising costs.
--Editors: Ryan Woo, Aaron Sheldrick.
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