This Week's Q2 Electricity Bill Announcement Likely... Slight Increase Expected

Korea Electric Power Corporation Announces 20 Trillion KRW+α Financial Soundness Plan
Government Decides Considering Public Burden of Rate Hike

As the ruling party and the government plan to announce the electricity rate hike proposal this week, attention is focused on the extent of the rate increase. Considering the pressure of rising prices due to the electricity rate hike and public opinion, it is known that an increase of less than 10 won per kWh (kilowatt-hour) is likely.

An electricity meter is installed at a multi-family house in Seoul on the 27th, when the fuel cost adjustment unit price for the third quarter electricity bill is scheduled to be announced. Photo by Jinhyung Kang aymsdream@

According to the energy industry on the 7th, Korea Electric Power Corporation (KEPCO) plans to report a '20 trillion won + α' financial soundness plan to the government this week. The ruling party and government are interpreted as aiming to offset criticism by preparing strong self-rescue measures by KEPCO before the rate hike. KEPCO is reportedly considering measures such as consolidating some regional business offices and returning wage increases as part of improving its financial structure.

If the government and ruling party accept the self-rescue plan submitted by KEPCO, the extent and timing of the rate hike will be decided accordingly. Earlier, the Ministry of Trade, Industry and Energy estimated the electricity rate increase for this year at 51.6 won per kWh to resolve KEPCO's financial difficulties at the end of last year, and raised the electricity rate by 13.1 won per kWh in the first quarter of this year. They also hold the position that a similar increase is necessary for the second to fourth quarters.

The government and ruling party are reportedly strongly considering an electricity rate increase of less than 10 won per kWh. If the electricity rate is raised by 10 won per kWh, it is expected to increase revenue by about 7 trillion won annually. For users, if the rate increases by 10 won, households are expected to bear an additional electricity bill ranging from the mid-2,000 won to mid-3,000 won per month.

If the electricity rate is raised in the second quarter, it is expected to provide some relief to KEPCO's financial difficulties, which recorded an operating loss of 32.6 trillion won last year and accumulates 4 billion won in interest daily. KEPCO's deficit has continued as the second-quarter rate hike has been delayed for over a month. As of last month, KEPCO's accumulated corporate bonds totaled 77.153 trillion won. Since the beginning of this year until last month, it has newly issued 9.55 trillion won in corporate bonds. Interest from bond issuance last year amounted to 1.4 trillion won, and this year it is expected to expand to around 3 trillion won.

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