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Following is a question by the Hon Cyd Ho and a written reply by the Secretary for the Environment, Mr Wong Kam-sing, in the Legislative Council today (November 7):
Question:
It has been learnt that the Government is preparing to conduct an interim review of the Scheme of Control Agreements (SCAs) with the two power companies in early 2013. In this connection, will the Government inform this Council:
(a) of the specific timetable for the interim review;
(b) whether it has drawn up any objectives for the interim review (such as to reform the electricity tariff structure, to discuss the model and regulatory framework for liberalisation of the electricity supply market, to strengthen interconnection between the power grids, etc.); if it has, of the objectives and details of the interim review; if not, the reasons for that;
(c) whether it has set up a dedicated task force responsible for the interim review; if it has, whether the members of the task force include professionals and academics who are not from the civil service, of the membership list of the task force and the professional background of each member;
(d) whether it will consult the public on the interim review; if it will, of the arrangements for the consultation, including details such as the timetable, approach and scope; if not, the reasons for that;
(e) whether it will make public the relevant documents and detailed minutes of meetings on the process of Government's previous negotiations with the two power companies on SCAs, as well as the details of the interim review such as all relevant documents and minutes of meetings; if it will, when such information will be made public; if not, the reasons for that;
(f) whether it has conducted any study on the existing SCAs to evaluate their pros and cons; if it has, of the findings of the study; if not, the reasons for that; and
(g) whether it has studied regulatory frameworks and monitoring models applicable to power companies, other than those under SCAs; if it has, of the details of the findings of the study; if not, the reasons for that?
Reply:
President,
(a) The Scheme of Control Agreements (SCAs) signed between the Government and the two power companies set out the obligations of the power companies, the returns for shareholders and the arrangements by which Government monitors the power companies' financial affairs. The current SCAs run for a term of ten years and will expire in 2018. The SCAs stipulate clearly that the Government and the two power companies shall have the right during 2013 to request modification of any part of the current SCAs, and mutual agreement is needed before implementing any proposed modification. The Government is making preparation for an interim review of the SCAs with the two power companies respectively in early 2013 in accordance with the SCAs.
(b) We have no fixed views on the interim review and have set no boundary to its scope. However, the review is premised on the current SCAs which shall continue to operate until 2018, and mutual agreement is also needed before implementing any proposed modification to the SCAs. Hence, any fundamental changes, such as model for opening up the electricity market, should be dealt with separately.
(c) The interim review falls under the purview of Environment Bureau. Relevant officers in the bureau are involved in the review and will, as necessary, consult other policy bureaux and government departments, and hire independent energy or other consultants to provide assistance.
(d) and (e) We are currently engaging experts, academics, green groups and other stakeholders on the interim review and relevant energy matters to solicit views widely. We already convened two engagement sessions with stakeholders on energy matters in end October. We will listen to the views of Members of the Panel on Economic Development of the Legislative Council before the interim review formally commences. Environment Bureau will collect and study the views from various parties and continue to perform the gate-keeping duties with best endeavour to ensure a reasonable balance among the energy policy objectives in Hong Kong, i.e. reliability, safety, environmental-friendliness and reasonable prices, in order to safeguard the interests of the public. The interim review is targeted to complete by end 2013. We will brief the Legislative Council and the public on the results of the review at an appropriate time.
(f) and (g) The current SCAs signed between the Government and the two power companies will expire in 2018. As stipulated under the SCAs, the Government will review with the two power companies the electricity supply regulatory framework before 2016. We are now conducting preparatory work for the review, including studying and analysing possible models for market liberalisation, changes to the regulatory framework and their impact, such as the issues of segregating electricity generation from the power grids and strengthening interconnection between the power grids.
Ends/Wednesday, November 7, 2012
Issued at HKT 12:32
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