the joint venture will in no way undermine the Executive Council's ability to ensure that the tariff charged for electricity is acceptable. This is because any purchase by CLP of electricity through HKNIC from Daya Bay will be treated as an operating cost in their accounts and will be included with all domestically incurred operating costs and other costs to arrive at the total expenses to be recovered through the CLP tariff. Therefore the impact of purchases of electricity from Daya Bay will be monitored and the resulting tariffs will require the approval of Executive Council.
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The various contractual documents that CLP and HKNIC have entered into for the formation of the joint venture are valid and binding. Having regard to all the circumstances including the politics of the arrangements it is not considered either desirable Or
practicable renegotiation of the terms.
Dividend payable to CLP
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to seek
any
The arrangements under which CLP will purchase electricity from Daya Bay through HKNIC are essentially similar to those which would have been required had the plant been wholly PRC-owned or had the Hong Kong partner in the joint venture been unrelated to CLP. The fact that HKNIC is a wholly owned subsidiary of CLP would not alter the basis for the
the arrangements that have been made. However, it has been suggested that the profits accruing to HKNIC which will in time be translated into dividends payable to CLP should be brought under the latter company's SCA. This suggestion is not considered valid because first, CLP's investment in HKNIC is excluded from the SCA and will not be taken into account in calculating CLP's permitted return in the computation of CLP's tariff; and second, the consumers of CLP will be protected through the approval within a financing plan of the cost of purchases of electricity by CLP through HKNIC. Nuclear power purchased by CLP will, for
for Scheme of Control purposes, be treated like any other purchase made by CLP in the process of meeting the demand for electricity.
Publicity
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On 15 October 1986, during the Daya
the Daya Bay debate in the Legislative Council, it was suggested that, when
when the CLP Scheme of Control is reviewed in 1988, the Government should consider negotiating with CLP the question of bringing HKNIC under the Scheme of Control. The Government's response to this suggestion was set out in its report to the Legislative Council on the safety and tariff arrangements for the Daya Bay nuclear power station.
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