Extension of Electricity and Gas Bill Deadlines for Small Business Owners and Low-Income Groups Until Year-End

Ministry of Industry Announces Additional Support Measures for Companies Responding to COVID-19
Minister of Industry Emphasizes the Need to Support Vulnerable Sectors Such as Small Businesses and SMEs

Due to the resurgence of the novel coronavirus infection (COVID-19), the area around Cheonggyecheon Tool Market in Jung-gu, Seoul, a district densely populated with small business owners in the Seoul metropolitan area including Seoul and Gyeonggi, appeared desolate on the 21st of last month amid ongoing economic downturn. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Moon Chae-seok] The government announced that it will extend the payment deadlines for electricity and gas bills for small business owners and low-income households until the end of the year. It will reduce industrial complex rents and rents for public institutions under the Ministry of Trade, Industry and Energy by 50% and 100%, respectively. This additional measure was introduced as the COVID-19 pandemic has lasted longer than expected, delaying economic recovery.

On the 15th, the Ministry of Trade, Industry and Energy held the "2nd Real Economy Inspection Meeting" at the Gunsan Industrial Complex in Jeollabuk-do, chaired by Minister Sung Yun-mo, and announced the "Additional Corporate Support Measures in Response to COVID-19" containing these details.

In his opening remarks, Minister Sung said, "As the unexpected COVID-19 situation continues, economic recovery is delayed, and difficulties for the public and companies are increasing," emphasizing, "Special attention and support are needed for small business owners, SMEs, and industries such as textiles and root industries that are small in scale and financially vulnerable."

◆Urgent Support Needed for Small Business Owners and SMEs... Extension of Electricity and Gas Bill Payment Deadlines

Electricity bill payment deferral method. (Source: Ministry of Trade, Industry and Energy)

The Ministry of Trade, Industry and Energy proposed four major measures: ▲overcoming short-term crises ▲creating public demand ▲finding export breakthroughs ▲providing customized support by industry.

The core short-term measure is to reduce corporate burdens through deferred payment of electricity and gas bills and rent reductions in industrial complexes.

The payment deadlines for electricity and gas bills for small business owners and low-income households will be extended. Electricity bills for 3.2 million small business households and 1.57 million low-income households for October to December will be deferred to next year, with installment payments allowed until June of next year.

For small business owners (low-voltage users) whose sales have decreased due to COVID-19, Korea Electric Power Corporation (KEPCO) will provide bill reduction consulting. If consulting is requested at KEPCO branches, each branch will offer contract power change consultations for small business owners.

For example, if the contract power is changed from 10kW to 5kW reflecting reduced electricity usage, the basic charge can be reduced from 61,600 KRW per month to 30,800 KRW, saving 30,800 KRW.

Overview of the Second Postponement of City Gas Bill Payment. (Source: Ministry of Trade, Industry and Energy)

For city gas, the payment deadline for bills from September to December will be extended by three months for 690,000 small business households and 1.36 million low-income households. The bills due during this period can be paid in installments until June of next year.

Minister Sung said, "We will expand the deferred payment and installment payment measures for electricity and city gas bills, which were originally scheduled to apply only to bills before this month, to include bills until the end of the year for small business owners and vulnerable groups," adding, "We will conduct consulting to recommend optimal rate plans for small business owners whose electricity usage has decreased to reduce their electricity bill burden."

◆Industrial Complex Rent Reduction... Up to 100% Reduction for Companies in Public Institutions under the Ministry of Trade, Industry and Energy

Rent for 800 SMEs located in national industrial complexes for September to December will be reduced by 50%. Rent for 1,000 SMEs located in public institutions under the Ministry of Trade, Industry and Energy will be reduced by up to 100% during the same period.

The rent reduction period for companies in national industrial complexes will be extended from August to December. The limit will be expanded from 20 million KRW to 30 million KRW. The interest rate on overdue rent for September to December will be lowered from 12% to 5%.

For 1,000 SMEs and small business owners located in public institutions under the Ministry, rent for September to December will be reduced by 30% to 100%.

◆Customized Support for Root, Exhibition, Textile, and Machinery Industries... Increased Guarantees and Special Financial Support

[Image source=Yonhap News]

Customized support measures will be promoted for root, exhibition, textile, and machinery industries. The performance bond limit for companies in the root industry will be tripled from 200 million KRW to 600 million KRW. A quality voucher worth 3 billion KRW will be provided, and a non-face-to-face export consultation meeting will be held for 200 companies with excellent technology. From next year, a joint education facility for the root industry will be established, and an additional graduate school for root technology convergence will be designated.

For exhibition industry companies, support will be provided for costs related to transitioning to online exhibitions, such as server rental fees, and mediation for refunding penalties will be pursued. When offline exhibitions resume, expansion of cost support items will be considered. Currently, only overseas buyer attraction costs are supported, but in the future, rent, promotion, and installation costs may be temporarily supported.

To revive the textile industry, Korea Fashion Market Season 2 will be held. The event will include major department stores, online platforms, and over 150 clothing brands.

Special financial support worth 300 billion KRW will be promoted this month for machinery and aerospace manufacturing industries. This includes expanding export guarantees, low-interest loans for capital goods companies, and mutual guarantees for SMEs with excellent technology.

◆Creating Public Demand... Rapid Execution of 4.3 Trillion KRW Investment by Korea National Oil Corporation, Korea District Heating Corporation, etc.

A bird's-eye view of Korea National Oil Corporation's floating offshore wind power complex in the East Sea. (Photo by Korea National Oil Corporation)

To create public demand, rapid execution of 4.3 trillion KRW in investments and purchases of goods and assets by institutions such as Korea National Oil Corporation and Korea District Heating Corporation will be carried out.

In the fourth quarter, 3.5 trillion KRW in investment funds will be rapidly executed to expedite next year's projects for institutions such as the Oil Corporation and Korea District Heating Corporation. Payment deadlines for 800 billion KRW in goods and asset purchases will be shortened, advance payments expanded, and bidding periods reduced.

To find export breakthroughs, measures include ▲doubling the export credit guarantee limit for mid-sized companies from 5 billion KRW to 10 billion KRW by the Korea Trade Insurance Corporation this month ▲opening online exhibition halls for 10 major industries applying technologies such as 3D and virtual reality (VR).

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