Hong Kong proposes extra CLP Power penalty charges for voltage dips alongside existing power cut fines

The company had a drop in voltage and partial energy disruption in areas of Tsing Yi on two occasions in January because of cable faults.

The bureau said “various sectors of the community” had appealed to CLP Power to take responsibility for the incidents and that it had proposed a separate penalty scheme for significant loss of voltage incidents in the contract with the company.

“CLP is still considering the proposal,” the bureau added.

CLP Power said on Monday night that it had “taken immediate follow-up actions and is working full steam to implement the related improvement measures”.

“We fully appreciate public expectations of a reliable power supply,” managing director Joseph Law Ka-chun said.

“We are committed to working tirelessly to ensure the safety and reliability of our system, managing our assets responsibly and proactively responding to incidents, including those caused by factors out of our control.”

The penalty mechanism at present only covers full scale power cuts, with electricity providers liable for fines based on the duration of incidents and the number of people affected.

CLP Power would be hit with a fine of HK$20 million (US$2.5 million), or a deduction of 0.015 per cent from the permitted return, if it recorded 15 million minutes of power disruptions in a year under the outage penalty scheme.

HK Electric is liable for the same amount if it logged 10 million minutes of power outages in a year.

Both companies can get an incentive of 0.015 per cent of the penalty charge if they restored the power supply within 65 minutes of an outage and maintained a yearly average reliability rate of at least 99.996 per cent.

The policy was among measures announced last December after the government’s interim review of its “scheme of control” agreements with the two power firms.

Any penalty or reward scheme should have its principles. For this, it is a matter of whether the situation is avoidable

Chan Siu-hung, senior adviser at CLP Power

Lawmakers, however, were divided on the imposition of penalties where voltage drops were caused by severe weather rather than human error or system failures.

Chan Siu-hung, an election committee lawmaker and also a senior adviser at CLP Power, said penalties should only come into play if a problem was within the control of the power firm.

“If because of natural reasons, such as thunder, lightning or huge storms, resulting in a significant dip in voltage, that is beyond the energy provider’s control,” he added.

“Any penalty or reward scheme should have its principles. For this, it is a matter of whether the situation is avoidable.”

Lawmaker Michael Tien Puk-sun, who campaigned for the new penalty mechanism earlier this year, said he was pleased to hear the government’s proposal.

But Tien insisted that CLP Power should also be held accountable for voltage falls brought on by natural causes in some circumstances.

“This is unless they have shown that they have taken measures to mitigate voltage dips which cause people to get trapped in lifts,” he said.

“If they can subsidise 50 to 70 per cent of lift upgrading works in older housing estates to include a rescue system, then I think the penalty for voltage dips triggered by natural causes can be waived.”

The bureau has not said whether it had made similar proposals to HK Electric, which supplies electricity to Hong Kong Island, Ap Lei Chau and Lamma Island under a separate contract.

HK Electric said on Monday night that most of its power cables were buried underground or under the sea, with very few overhead cables in the Hong Kong Island area.

“As a result, the chances of being affected by external factors, including adverse weather conditions, are relatively low,” the company said. “Most of the voltage drop incidents that have occurred in the past in the Hong Kong Island area were caused by factors outside of HK Electric’s system.”

The company did not directly comment on whether it would follow suit if CLP Power accepted the bureau’s proposal.


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