The Government today reached new Scheme of Control Agreements with the city's two power companies.
The new agreements will lower the permitted rate of return for the companies from 9.99% to 8%.
Secretary for the Environment KS Wong said under the new arrangements, tariffs will fall by about 5%, significantly reducing the public’s electricity bills.
"Under the current Scheme of Control Agreements, power companies shall continue to earn the same rate of return of 9.99% for non-renewable assets until 2023 subject to the terms of the current Scheme of Control Agreements.
"Under the new Scheme of Control Agreements, there will be an immediate reduction in the permitted rate of return from the commencement of the Scheme of Control Agreements in October 2018 and January 2019 respectively," he said.
Mr Wong added as the existing coal-fired generators will reach the end of their shelf life in the next decade, the 15-year term of the new agreements will enable the companies to replace them with cleaner generators using natural gas and non-fossil fuels.
He said the agreements achieved a balance between fulfilling public demands for reduced tariffs and the need to encourage power companies to help combat climate change.
He added the new agreements will help the Government achieve its target to reduce carbon intensity by 65%-70% by 2030.
Click here for details of the agreements.
