The electricity sector has always been privately-owned and operated in Hong Kong. Today, the territory’s two vertically-integrated power companies are regulated under the Scheme of Control (SoC) Agreement. The SoC defines the power companies’ role as an electricity provider, and provides a regulatory framework for the government to monitor its operating performance and financial affairs. Under the regulatory regime, the power companies have an obligation to provide sufficient and reliable electricity supply in their service areas. Customers obtain quality electricity supply at a reasonable price and in an environmentally responsible manner, while the power companies earn a return which is reasonable in relation to the risks involved and the capital invested. Hong Kong’s first SoC Agreement was signed in 1964 between CLP, Castle Peak Power Company Limited (CAPCO) and the government. Under the SoC, the power industry has been providing reliable electricity that kept pace with Hong Kong's rapid economic growth. The agreement was extended in 1978 and again in 1993. The current SoC Agreement came into effect on 1 October 2008.

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