With the current scheme of control regulation for the Hong Kong electricity supply industry expiring in 2008, the Government has sent out a consultation paper seeking views from the general public on its reform and possible future development. This paper investigates the characteristics of the current agreement and the rationale for feasible reform of the Hong Kong ESL It leads to a discussion on a proposed feasible reform using performance-based regulation approach modeling and the associated implementation issues related to price capping, risk analysis, performance indices, quality monitoring and governance. (c) 2005 Elsevier Ltd. All rights reserved.