Former KEPCO President Kim Jong-gap Criticizes Electricity Price Controls: "Increasing Interest Burden, Masked as Benefits"

"Accumulated Deficit of KEPCO Results in 1.4 Million KRW Debt Per Citizen"

[Sejong=Asia Economy Reporter Kwon Haeyoung] Kim Jong-gap, former president of Korea Electric Power Corporation (KEPCO), strongly criticized the government for controlling electricity rates under the pretext of inflation management. He argued that suppressing electricity rate hikes despite soaring fuel costs increases the public's interest burden, yet the government is instead packaging this as a 'benefit.'

According to the power industry on the 18th, Kim stated on Facebook on the 16th, "Advanced countries mainly manage inflation through adjustments in money supply and interest rates."

He pointed out, "Public utility rates and fees are determined by 'independent regulatory commissions' based on transparent standards and procedures without government intervention," adding, "Even advanced countries where inflation is rising much higher than ours have immediately reflected energy price increases and seen energy-saving effects, but we are going in the opposite direction." Korea is the only advanced country using public utility rates and fees as a tool for inflation management.

Above all, he noted that the government's control over public utility rates and fees hikes ultimately increases the public's interest burden in the mid to long term.

Kim said, "In the case of electricity rates, KEPCO has borrowed 70 trillion won due to accumulated deficits, resulting in a debt of 1.4 million won per citizen, and paid 2 trillion won in interest last year, imposing an additional annual burden of 40,000 won per citizen. Even if all the factors for (electricity rate) increases are reflected now, the public's interest burden will continue to rise for the time being." He criticized the government, saying, "The government controls rate and fee hikes while boasting about reducing the burden," thus packaging the public's burden as a benefit.

He said, "If you want to control (electricity rate) increases, you must clearly disclose that the public will have to bear more later, including principal and interest on borrowings," adding, "Most people will probably choose to bear more now without paying interest."

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