Jeong Seung-il, KEPCO President, Expresses "Apologies to the Public" and Announces 25 Trillion Won Self-Rescue Plan (Comprehensive)

Jung Seung-il, President of Korea Electric Power Corporation (KEPCO), announced on the 12th, "As of today, I intend to step down from my position as President of KEPCO."

In a statement released that afternoon, President Jung expressed, "I deeply apologize to the public for the burden caused by electricity rates." It is reported that earlier that morning at the headquarters in Naju, Jeollanam-do, during the 'Emergency Management and Management Innovation Commitment Rally,' he announced a 25 trillion won financial soundness plan and simultaneously conveyed his intention to resign.

[Image source=Yonhap News]

President Jung stated, "KEPCO feels an even greater sense of responsibility and will faithfully carry out the self-help efforts and management innovations announced today to alleviate the burden on the public as much as possible." He added, "For the time being, KEPCO's management will operate under an emergency management system, ensuring stable operation of emergency power supply during the upcoming summer and thorough prevention of industrial accidents at work sites."

He repeatedly urged the public to understand the necessity of the rate increase. He said, "Normalizing electricity rates will be an important stepping stone for KEPCO to achieve management normalization," and appealed, "Currently, the electricity sales price is significantly below the purchase price. If rate normalization is delayed, it will have considerable impacts on the national economy, including disruptions in stable power supply, distortion of financial markets due to increased KEPCO bond issuance, and instability in the energy industry ecosystem."

He continued, "Even amid the global energy supply chain crisis triggered by the Russia-Ukraine war that has lasted over a year, KEPCO has worked day and night to buffer the burden on the national economy and to supply high-quality electricity at affordable prices stably," and asked, "Please remember that the electricity used by all citizens 24 hours a day, 365 days a year contains the sweat and efforts of KEPCO employees."

In conclusion, President Jung requested, "As a true national enterprise and a national asset, KEPCO seeks to regain the trust of the public and become a reliable public corporation. We ask for your unwavering interest and support." President Jung has faced continuous resignation pressure from the government and ruling party after KEPCO recorded its largest-ever deficit last year. He assumed office as the 21st CEO of KEPCO in June 2021.

KEPCO Executives to Return Entire Salary Increase

On the same day, KEPCO prepared a 25 trillion won self-help plan to strengthen its financial structure. It plans to sell the Namseoul Headquarters located in Yeouido, a key asset in the metropolitan area, and consolidate some of the 234 regional offices to improve workforce efficiency. Additionally, KEPCO executives at grade 3 and above, and employees at grade 2 and above in power group companies will return all salary increases, and performance bonuses decided next month will also be returned in full or at least 50% depending on the grade. The scale of financial structure improvement is 5.6 trillion won larger than the comprehensive financial soundness plan for the power group (20.1 trillion won) established last year when the emergency management system was initiated.

The newly added improvement plan includes selling the Namseoul Headquarters in Yeouido, Seoul, valued at about 800 billion won. KEPCO explained that it will maximize the sale value by linking with local government district unit plans or through 'proposal contests.' It will also lease three floors of the KEPCO Art Center and ten office buildings located in a key transportation hub in Gangnam. Furthermore, KEPCO plans to integrate and operate the 15 regional headquarters and 234 branch offices, which have been maintained based on administrative districts since the 1980s, focusing on major hub cities.

Employees will also return salary increases. KEPCO will have employees at grade 2 and above return all salary increases, and those at grade 3 will return 50% of the increase. Performance bonuses will also be returned next month based on management evaluation results, with full returns for grade 1 and above and 50% for grade 2. However, employees who are union members are excluded from returning salary increases as it requires agreement with the union.

Efforts to improve organizational and workforce efficiency will also be pursued. According to the 10th Basic Plan for Electricity Supply and Demand, about 1,600 essential additional personnel needs will be absorbed through internal workforce reallocation. To this end, KEPCO will implement digitalization of tasks, reorganization of business offices, and task regionalization. Through digitalization of work methods such as customer service counters, unmanned 154kV substations, and automated equipment management using robots and drones, about 210 existing employees will be reassigned to future growth areas such as new nuclear power plants. A dedicated support department will be established to gradually promote organizational restructuring and workforce efficiency by 2026.

KEPCO will also delay power facility construction within the scope that does not affect stable power supply. It plans to reduce 1.3 trillion won by adjusting construction timing and scale, and cut a total of 2.5 trillion won including 1.2 trillion won from routine operating expenses such as business promotion costs. Additionally, through flexible operation of the coal power generation cap system, it aims to reduce power purchase costs, which account for 90% of operating expenses, by up to 2.8 trillion won.

Korea Gas Corporation Declares Emergency Management System... 15.4 Trillion Won Savings

Korea Gas Corporation (KOGAS) officially declared an emergency management system on the same day and decided to focus all efforts on management normalization. As part of financial structure improvement, it will have employees at grade 2 and above, including those at its subsidiary Gas Technology Corporation, return all salary increases for this year.

Choi Yeon-hye, President of KOGAS, held an emergency resolution rally with all employees and announced a 'high-intensity self-help plan' containing these measures. The scale of management innovation increased by 1.4 trillion won from the previous 14 trillion won to 15.4 trillion won. The plan includes stable and economical supply of natural gas, minimizing gas rate increase factors through wage freezes and organizational innovation, and strengthening public services such as support for vulnerable groups.

Regarding performance bonuses, KOGAS plans to return all bonuses for grade 1 and above and 50% for grade 2 employees next month along with KEPCO after management evaluation results are finalized. Participation of all employees will also be promoted. A KOGAS official said, "We have officially requested participation from union members for this."

To reduce operating costs, KOGAS plans to cut professional basketball team operating expenses by 20% compared to last year. In addition, it announced plans to design support measures for energy-vulnerable groups and promote energy efficiency innovation. Previously, last month, the corporation unmanned 16 management offices and reassigned about 80 employees, saving approximately 5 billion won.

President Choi said, "We deeply apologize to the public for the burden caused by gas rates," and added, "KOGAS will take on a heavy responsibility and devote all efforts to implementing high-intensity self-help measures to become a public corporation that meets the demands and expectations of the public."

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