KEPCO "Amendment of KEPCO Act Essential... Concerns Over Worsening National Economic Crisis"

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Dongwoo Lee] Korea Electric Power Corporation (KEPCO) stated on the 11th, "If the amendment to the KEPCO Act is not passed, there is a concern that it could escalate into a national economic crisis, with disruptions in power supply to the public due to inability to repay existing borrowings and paralysis of the entire electricity market."

In KEPCO's position statement titled "KEPCO's stance on the re-promotion of the KEPCO Act amendment within this year’s National Assembly," released on the same day, it said, "The amendment to the KEPCO Act, which significantly increases the issuance limit of corporate bonds (KEPCO bonds) as an essential liquidity securing measure for stable power supply, must be enacted."

It added, "We are very relieved that after the KEPCO Act amendment was rejected in the plenary session of the National Assembly, the ruling and opposition parties agreed to re-promote the approval of the amendment in a special session of the National Assembly. We will actively communicate with the National Assembly to seek understanding and cooperation so that the amendment can be passed as soon as possible during the next special session."

Earlier, on the 8th, the government pushed for an amendment to the KEPCO Act to increase the KEPCO bond issuance limit from the current double to up to six times to resolve KEPCO’s massive deficit, but it was rejected in the plenary session of the National Assembly. The ruling and opposition parties plan to reintroduce the amendment in the December special session and aim for its passage within the year.

The current KEPCO Act limits the issuance of KEPCO bonds to twice the sum of capital and reserves. Accordingly, if the large net loss from this year’s operating deficit exceeding 30 trillion won is reflected in the reserves, new bond issuance will become impossible after March next year.

Industry experts forecast that KEPCO will incur an operating deficit of around 13 trillion won next year as well. Therefore, if the KEPCO Act is rejected and KEPCO’s funding is cut off, a significant increase in electricity rates is highly likely.

KEPCO stated, "We will establish a phased electricity rate increase plan early in cooperation with the government, while preparing multifaceted measures such as government financial support plans and improvements to the electricity market system. We will also actively pursue strong fiscal soundness and self-help efforts."

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