Hong Kong’s two power companies will slash their electricity charges by more than 2 percent starting in January.

CLP Power, which supplies Kowloon, the New Territories and Lantau, will reduce its net tariff by an average of 2.6 percent.

As for HK Electric, which serves Hong Kong Island and other outlying islands, charges will be lowered by 2.2 percent.

The reductions mean customers will pay approximately 3.7 cents less per unit of electricity compared with 2025 rates.

For a typical three-person household, the tariff cut translates to savings of roughly HK$10 per month on electricity bills.

CLP managing director Joseph Law noted the company has also set aside HK$270 million next year to launch a series of projects to promote carbon reduction and provide support to the less privileged and SMEs.

“We fully appreciate the concerns from the public about electricity tariffs," he said.

"We hope this reduction will lessen the burden on the public and the SMEs and then we can inject more vitality into our economy."

HK Electric managing director Francis Cheng said that although fuel costs have come down by close to 20 percent over the past year, this reduction does not translate into equivalent reductions in utility charges.

“The fuel-cost charge is on an accountable basis, that is, the power company will not make any profit from fluctuations in fuel prices,” he said.

“But then there’s a delayed effect with the [fuel clause charge] adjustments because of the mechanism. So sometimes the fuel clause charge may not reflect international fuel price changes in real time.”

The two power firms said they had to withdraw several hundred million dollars from their respective Tariff Stabilisation Funds to make the tariff reductions possible.

Secretary for Environment and Ecology Tse Chin-wan said the government has been acting as a gatekeeper by vetting the development plans of the two power companies

“We primarily reviewed the projected electricity sales volumes of the two companies as the volumes have direct impact on prices,” he said.

“We also reviewed the reasonableness of their operating expenses and fuel price estimates, aiming to minimise the increase in electricity tariffs.”