Compensating Nuclear Phase-Out Costs Through Electricity Bills... The Nuclear Phase-Out Invoice Is Coming

Compensation for Nuclear Power Operators' Losses with Electricity Fund... Electricity Business Act Amendment to Take Effect in December

[Sejong=Asia Economy Reporter Kwon Haeyoung] An amendment to the Electricity Business Act that compensates operators who halted nuclear power generation projects due to the government's nuclear phase-out policy with electricity fees paid by the public will be implemented in December.

The Ministry of Trade, Industry and Energy announced that a partial amendment to the Enforcement Decree of the Electricity Business Act containing this content was approved at the Cabinet meeting on the 1st.

According to the amendment, operators who stopped power generation projects or power source development projects to reduce nuclear power can be compensated using the Power Industry Infrastructure Fund. The power fund is accumulated by imposing a statutory charge of 3.7% on the electricity fees paid monthly by the public, collecting about 2 trillion won annually.

The government established the principle of compensating operators' expenses incurred from the phased reduction of nuclear power using funds, etc., through the 'Energy Transition Roadmap' deliberated and approved at the Cabinet meeting in October 2017. This amendment to the enforcement decree provides the legal basis.

An official from the Ministry of Trade, Industry and Energy said, "By early December, when the enforcement decree takes effect, we will prepare subordinate regulations detailing the scope and procedures of cost compensation," adding, "Afterwards, nuclear power operators such as Korea Hydro & Nuclear Power will be able to apply for cost compensation."

Accordingly, KHNP plans to claim compensation from the government for losses related to five reactors: Daejin Units 1 and 2 in Samcheok, Cheonji Units 1 and 2 in Yeongdeok, whose projects were halted, and the early-closed Wolseong Unit 1. For Shin Hanul Units 3 and 4, whose projects are on hold, it is expected that the decision to claim compensation will depend on whether the projects resume or are terminated in the future.

This amendment to the Electricity Business Act is likely to face criticism that the government is passing the costs of its 'over-speed' nuclear phase-out policy onto the public through electricity fees. In the case of Shin Hanul Units 3 and 4, construction began after receiving government permits but was abruptly halted due to the Moon Jae-in administration's nuclear phase-out declaration.

Since the current administration took office, a total of seven nuclear reactors have been halted, put on hold, or closed early, with estimated losses of at least 1.4445 trillion won. According to the office of National Assembly member Han Mu-kyung of the People Power Party, the loss amounts are 565.2 billion won for Wolseong Unit 1, 779 billion won for Shin Hanul Units 3 and 4, 97.9 billion won for Cheonji Units 1 and 2, and 3.4 billion won for Daejin Units 1 and 2.

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