Government Considers Electricity Bill Deferral for Small Businesses Affected by COVID-19... "Excludes Large Corporations and Factories"

Asia Economy DB=Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporters Kim Bo-kyung, Jang Se-hee, Moon Chae-seok] The government is considering a plan to postpone electricity bill payments for several months for small business owners hit hard by the novel coronavirus infection (COVID-19). However, it clearly stated that large corporations and manufacturing factories are not eligible beneficiaries.

On the 24th, President Moon Jae-in said at the 2nd Emergency Economic Meeting held at the Blue House main building, "Swift measures are needed for the deferment or exemption of public charges such as the four major social insurance premiums and electricity fees," adding, "This is intended to support livelihoods for individuals while helping companies reduce costs to maintain employment." He further ordered, "Please ensure this can be implemented starting from April."

The aim is to slightly reduce the tangible cost burdens such as the four major social insurance premiums and electricity fees for companies, to protect jobs and prevent mass unemployment.

The Ministry of Trade, Industry and Energy and Korea Electric Power Corporation (KEPCO) immediately began consultations on electricity fee support measures. Discussions focused intensively on whether to offer "electricity bill discounts or deferments" and on defining the scope of beneficiaries.

Currently, the government is strongly considering a plan to postpone electricity bill payment deadlines by more than two months for small business owners and self-employed individuals affected by COVID-19. Offering discounts on electricity fees or expanding the beneficiaries to include small and medium-sized enterprises or larger would impose a significant financial burden. Last year, KEPCO recorded its worst deficit in 11 years. Its main revenue source, electricity sales income, decreased by 903 billion KRW compared to the previous year, and policies on coal phase-out and greenhouse gas reduction also negatively impacted KEPCO's performance.

The government also expressed reluctance regarding electricity fee discounts, citing budgetary issues. A Ministry of Trade, Industry and Energy official stated, "An additional budget project is underway to reduce electricity fees by 50% for small business owners in special disaster areas," adding, "Discounts on electricity fees for regions outside the special disaster areas involve budgetary considerations, so it is difficult to implement immediately, and we are therefore reviewing the 'deferment' option."

He also said, "It is not possible to include all citizens. Large corporations or big factories are not considered," and "The beneficiaries will be vulnerable groups such as small business owners who have suffered significant damage due to COVID-19." He added that the deferment will be applied only to those who apply for it, noting, "There is no need to not pay if one is financially able to pay the electricity bill."

Meanwhile, the government will invest 73 billion KRW from the supplementary budget to support 50% of electricity fees for small business owners in Daegu and the Gyeongsangbuk-do regions of Gyeongsan, Bonghwa, and Cheongdo, which have been designated as special disaster areas. The fee reduction will apply from April usage through September.

This content was produced with the assistance of AI translation services.