KEPCO Freezes Fuel Cost Adjustment Rate for Q2

Base Fuel Cost and Climate Environmental Charge Increased
Electricity Rate Rises by 6.9 KRW per kWh in Q2

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Dongwoo Lee] The government and Korea Electric Power Corporation (KEPCO) have frozen the fuel cost adjustment unit price for the second quarter. However, separate from the freeze on the fuel cost adjustment unit price, the base fuel cost and climate environment charges will be raised as previously announced, resulting in an increase of 6.9 KRW per kWh (kilowatt-hour) in electricity rates starting next month.

KEPCO announced on the 29th that it has finalized the fuel cost adjustment unit price for April to June at 0 KRW/kWh. The fuel cost adjustment unit price is a system that adjusts electricity rates quarterly based on the purchase costs of fuels such as oil, coal, and liquefied natural gas (LNG). KEPCO had earlier estimated the second quarter fuel cost adjustment unit price at 33.8 KRW/kWh and submitted a proposal to the government on the 16th to increase it by 3.0 KRW/kWh, applying the quarterly adjustment ceiling.

However, due to concerns over the burden from rising prices, the government decided to maintain the fuel cost adjustment unit price at 0 KRW per kWh from the fourth quarter of last year through the second quarter of this year.

The freeze on the fuel cost adjustment unit price will immediately reduce additional burdens on households. On the other hand, KEPCO’s management burden is expected to increase further, with a record loss of 20 trillion KRW anticipated this year.

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