Thank you, Deputy President. The Liberal Party supports studies on ways to stabilize electricity tariffs. We agree with most parts of the original motion and the two amendments, but we have reservations about certain parts.

First of all, it has been the established stance of the Liberal Party over the years to support reviewing the maximum permitted return and examining whether there is any room for tariff reduction. Let us look back at the relevant background, which is roughly as follows:

Electricity in Hong Kong has all along been provided by CLP Power Hong Kong Limited and The Hongkong Electric Company, Limited. The two power companies each possess and operate their own supply chains, including power plants and power transmission and distribution networks. The first Scheme of Control Agreement (“SCA”) was signed early in 1964. In the subsequent decades, different elements were added to SCAs in order to improve the operation and achieve the energy policy objectives more effectively. As a matter of fact, the maximum permitted return of the two power companies has generally been declining. A more significant change took place during the renewal of SCA in 2008 when it was reduced from 13.5%, which had been maintained for years, to 9.99%, and then in 2017 when it was further reduced to 8%. Moreover, the validity period of the new SCA has been extended from 10 years to 15 years, expiring at the end of 2033. What does “8%” mean? If we compare it with the current interest rates of 4% to 5% for bank deposits, 8% may not be high, but the interest rates have been 1% to 2% over the past years, not to mention that the current SCA will remain in force until 2033. Why did Mr Andrew LAM’s amendment even delete “including lowering the permitted return of the two power companies” from the review? This is the reason why we have reservations about his amendment.

As regards Dr Hoey Simon LEE’s proposal in his amendment to “start preparing for opening up the power grids for access by new electricity suppliers ... so as to open up the electricity market progressively, and increase the ratio of electricity imported from the Mainland, so as to reduce the two power companies’ investments on fixed assets and achieve stabilization of electricity tariffs”, the Liberal Party considers that it can be studied rather than being started immediately, since such introduction may not necessarily lead to substantial reduction in electricity tariffs. The experience of Macao is that despite the introduction of the Mainland power grid, the actual tariff per unit in its electricity supply market is not much different from that in Hong Kong, being only a few cents lower. Therefore, we have reservations about Dr Hoey Simon LEE’s amendment.

Regarding Mr LUK Chung-hung’s proposal in the original motion about “urging the two power companies to disclose their operational and financial information to the public, including the maintenance costs and depreciation of their generating units, the prices of bulk energy purchases, the interest costs of lending and financing and related information, so as to enhance the public’s right to know and the transparency of their operations”, the Liberal Party has reservations about it. It is because being listed companies, the two power companies have already disclosed the information as required by the law. They did not hide such information, not to mention that a lot of information is a trade secret the disclosure of which may not be appropriate.

Lastly, I would like to add two points. Firstly, can the electricity tariffs in Hong Kong be regarded as low? In fact, many places have higher tariffs than Hong Kong. Whatever views we have on the permitted return, the two power companies have indeed provided steady electricity supply to the business sector and the people of Hong Kong over the past decades.

Secondly, to dovetail with the SAR Government’s target of achieving carbon neutrality by 2050, the two power companies need to implement low-carbon electricity generation, including phasing out coal-fired electricity generation and developing local renewable energy, in order to reduce carbon emissions. These measures will increase the operating costs. Inevitably, tariffs will then need to be increased. Hence, we should examine how to mitigate the tariff increase.

Deputy President, I so submit.