The Hongkong Electric Company Limited (HEC) supplies Hong Kong Island and the neighbouring islands of Ap Lei Chau and Lamma; CLP Power Hong Kong Limited (CLP Power) supplies Kowloon and the New Territories, including Lantau and several outlying islands. The supply to consumers is at 50Hz alternating current while the voltage is 220 volts single-phase and 380 volts three-phase.

The two supply companies are investor-owned. The Government monitors the two companies through mutually agreed Scheme of Control Agreements. Current agreements with CLP Power and HEC came into effect on October 1, 1993, and January 1, 1994, respectively. Both will last for 15 years. The first and second five-yearly interim reviews were completed in early 1999 and late 2003, respectively. The agreements require each company to seek the approval of the Government for certain aspects of their financial plans, including projected tariff levels. The agreements do not grant the companies any exclusive rights. They are not franchises, nor do they define a supply area for either company or exclude new entrants to the market.

Electricity for HEC's supply areas is supplied from the Lamma Power Station. At year-end, total installed capacity (i.e. rated power output of generators) at the Lamma Power Station was 3 420 megawatts (MW). In May 2000, the Government approved HEC's new power station at the Lamma Extension and the installation of the first 300MW gas combined-cycle generator. The unit was scheduled to be commissioned in 2004. Subsequent to the review conducted at end-2003, the Government agreed with HEC's proposal to defer the commissioning of the unit to 2006. HEC's transmission system operates at 275 kilovolts (kV), 132kV and 66kV and distribution is effected mainly at 22kV, 11kV and 380 volts.

The Castle Peak Power Company Limited (CAPCO), which is 60 per cent owned by ExxonMobil Energy Limited (formerly known as Exxon Energy Limited) and 40 per cent by CLP Power, supplies electricity to CLP Power from its Black Point (1 875MW), Castle Peak (4 108MW) and Penny's Bay (300MW) power stations, with the total installed capacity being 6 283MW. Two more 312.5MW generators are scheduled to be commissioned at the Black Point power station during 2005-06.

CLP Power wholly owns the associated transmission and distribution systems. Its transmission system operates at 400kV and 132kV, and distribution is effected mainly at 33kV, 11kV and 380 volts.

The CLP Power and HEC transmission systems are interconnected by a cross-harbour link. This provides emergency back-up and achieves cost savings to consumers through economic energy transfers between the two systems and a reduction in the amount of generating capacity that needs to be kept as spinning reserve against the tripping of other units. The interconnection link currently has a total capacity of 720 megavolt-amperes (MVA) (i.e. 720 000 kilovolt-amperes (kVA)).

CLP Power's transmission system is also interconnected with the electricity network in Guangdong Province which facilitates the export and import of electricity to and from the province. The electricity sales to Guangdong are made from existing reserve generating capacity of CLP Power and are governed by an agreement with the Government, under which CLP Power's consumers receive priority of supply and 80 per cent of the profit from the sales.

In 1985, the Hong Kong Nuclear Investment Company Limited (a wholly-owned subsidiary of the CLP Holdings Limited) and the Guangdong Nuclear Investment Company Limited (now wholly owned by the China Guangdong Nuclear Power Holding Company Limited) established the Guangdong Nuclear Power Joint Venture Company Limited, to build and operate the Guangdong Nuclear Power Station at Daya Bay in Guangdong. This station comprises two 984MW pressurised water reactors which went into commercial operation in February and May 1994, respectively. CLP Power undertook to buy about 70 per cent of the station's power to meet part of the longer-term demand for electricity in its supply area.

Through its affiliated company, the Hong Kong Pumped Storage Development Company Limited, CLP Power has the right to use 50 per cent of the 1 200MW capacity of Phase 1 of the Guangzhou Pumped Storage Power Station, at Conghua. Off-peak electricity from the CAPCO system and the Guangdong Nuclear Power Station is used to pump water from a lower reservoir to an upper one. The water is allowed to flow downhill during the day to generate electricity to meet Hong Kong's peak demand.

Three-year Demand Side Management (DSM) Agreements between the Government and the two power companies expired in June 2003. All power companies' DSM programmes were completed in early 2004.

The Electricity Ordinance, with its subsidiary regulations, is the main enabling legislation on electrical safety. It sets out the legal framework encompassing all the areas within which the concerned legislation shall apply, including the registration of electrical contractors/workers and competent persons, the safety standards and requirements for electricity supply, electricity supply lines, electrical wiring and products.

In 2004, the Electrical and Mechanical Services Department started revising the code of practice on working near electricity supply lines, which has come into operation since 2000, to provide up-to-date guidelines on how to comply with the requirements of the Electricity Supply Lines (Protection) Regulation.

Since 1990, regulations concerning the registration of electrical contractors and workers, the safety of electrical wiring, the supply of safe household electrical products, and the protection of electricity supply lines from third party damage have come into effect in stages. At December 2004, some 8 700 electrical contractors and 61 000 electrical workers held valid registration. Also, some 700 competent persons had been approved for locating underground electricity cables.

During enforcement of the Electricity Ordinance in 2004, the Government conducted 12 600 site inspections to check the safety standards of electrical installations and electrical product supply outlets, and prosecution action was initiated in 207 cases.