4.
MONDAY, MARCH 9, 1992
MRS CHAN SAID: "FOR OUR PART, WE IN THE GOVERNMENT BELIEVE THAT THE CURRENT SCHEME OF CONTROL AGREEMENT HAS GENERALLY WORKED WELL:
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CLP'S CONSUMERS ENJOY ONE OF THE MOST RELIABLE ELECTRICITY SUPPLIES IN THE REGION;
THE COMPANIES HAVE INVESTED OVER $55 BILLION IN ASSETS DURING THE COURSE OF THE CURRENT AND PREVIOUS SCA;
TARIFF LEVELS COMPARE FAVOURABLY WITH THOSE CHARGED IN THE REGION AND HAVE INCREASED BY AN AVERAGE OF UNDER 13% OVER THE PAST 10 YEARS. THIS REPRESENTS A REDUCTION OF OVER 40 PER CENT IN REAL TERMS;
THE
TECHNICAL EFFICIENCY AND PRODUCTIVITY OF THE COMPANIES HAVE IMPROVED STEADILY WITH THE RESULT THAT FEWER PEOPLE AND LESS FUEL ARE REQUIRED NOW TO PRODUCE THE SAME MOUNTS OF ELECTRICITY THAN WAS THE CASE 10 YEARS AGO.
"FOR THESE REASONS THE MAJOR TERMS OF THE NEW AGREEMENT REMAIN BASICALLY UNCHANGED, MRS CHAN SAID.
"AT THE SAME TIME IMPORTANT NEW PROVISIONS INCORPORATED TO ENABLE THE GOVERNMENT TO:
I+
II.
HAVE BEEN
REVIEW THE LIFE OF ASSETS TO BRING THEM MORE INTO LINK WITH THEIR ESTIMATED USEFUL LIVES;
ALLOW CAPITALISED EXPENDITURE ON REFURBISHING OR IMPROVING ASSETS TO BE ELIGIBLE FOR PERMITTED RETURN SO AS TO ENSURE THAT ASSETS ARE NOT REPLACED PREMATURELY;
III. REDUCE THE SOURCES OF FUNDING THAT ARE CONSIDERED AS SHAREHOLDERS' INVESTMENTS AND THEREFORE ELIGIBLE FOR THE ADDITIONAL 1-1/2 PERMITTED RETURN;
IV. SET OUT THE COMPANIES' RIGHTS AND OBLIGATIONS
CONSERVATION AND ENVIRONMENTAL PROTECTION SUBMITTING IN FUTURE FINANCING REVIEWS PLANS PEAK DEMAND);
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IMPROVE GOVERNMENT'S MONITORING ABILITY THROUGH THE SCOPE OF FINANCING AND AUDITING REVIEWS LATTER WILL ALSO NOW COVER TECHNICAL MATTERS;
ON ENERGY (INCLUDING TO REDUCE
ENHANCING E.G. THE
VI.
CLARIFY THAT FUTURE ARRANGEMENTS FOR ELECTRICITY REQUIRE OUR PRIOR APPROVAL;
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SALES OF
VII. IMPROVE THE PRESENTATION OF THE SCA TO MAKE IT MORE
UNDERSTANDABLE TO THE LAYMAN.
/"IN ACCORDANCE