[Q&A] Industry Vice Minister: "Electricity Price Increase in Q3 Difficult... Energy Prices Showing Downward Stability"

Press Conference at Government Sejong Cheongsa on the 14th
International Oil Prices Down 12% Since Early This Year

Kang Kyung-sung, the 2nd Vice Minister of the Ministry of Trade, Industry and Energy, stated on the 14th, "Considering the burden on the public, I think '(the 3rd quarter electricity rate) increase will not be easy'." This means that the Ministry of Trade, Industry and Energy, the main department responsible for deciding electricity rates, has officially announced a policy to freeze the 3rd quarter electricity rates.

At a press briefing held at the Government Complex Sejong on the same day, Vice Minister Kang said, "We need to review the fuel cost adjustment unit price submitted by Korea Electric Power Corporation (KEPCO), but the government has made many efforts to reflect the actual cost in electricity rates and has actually raised them significantly."

Electricity rates have been raised five times from April last year to May this year, with a total increase of 40.4 won (39.6%) per 1 kWh (kilowatt-hour).

Vice Minister Kang said, "We need to comprehensively consider energy price trends, inflation, the public's ability to bear the burden, and KEPCO's financial situation, but the encouraging point is that energy prices are showing a downward stabilization trend," adding, "We will make the final decision on whether to raise electricity rates considering these factors."

According to the Ministry of Trade, Industry and Energy, the price of Dubai crude oil was $71.97 per barrel as of the 13th, down $10.10 (-12.3%) from the beginning of the year. It is $46.70 (-39.4%) cheaper than the highest price in the past year on June 14 last year ($118.67).

Vice Minister Kang explained, "Currently, KEPCO is operating at a deficit because the price at which it sells electricity is lower than the price at which it purchases electricity, so it is not denying the necessity of a rate increase," and added, "While a rate increase is necessary, we also need to consider the public's burden and adjust the pace accordingly."

The following are key excerpts from the Q&A session between Vice Minister Kang and the press corps.

- Although international energy prices have fallen, there is a time lag with the actual fuel cost reflected in electricity rates.

▲ It is true that there is a time lag. However, energy prices have been falling since the beginning of the year, and this is being reflected.

- KEPCO submitted to the National Assembly last year that the appropriate annual electricity rate increase for this year, aiming to eliminate cumulative deficits by 2026, is 51.6 won per 1 kWh.

▲ Predictions at that time and now may differ. Energy price trends are predicted based on futures prices, and we are reviewing these to determine when the purchase price and selling price for KEPCO align. Calculations on this are ongoing.

- There is criticism that the Ministry of Trade, Industry and Energy has relinquished the authority to decide electricity rates to the National Assembly or the Presidential Office.

▲ I do not agree that the authority to decide rates lies with the National Assembly. We discussed whether it would be acceptable to raise electricity rates at once due to the heavy burden of cooling costs. I do not agree that the authority to decide rates has been transferred.

- The position of KEPCO president is vacant. What is the appointment procedure?

▲ The recruitment process will begin soon. It is expected to take about two months.

- What is the progress on nuclear power plant exports?

▲ In Poland, a feasibility study between the two operators is underway. Once this is completed, the next stage will follow. It is progressing actively. The timeline needs to be observed further. While we are leading some aspects, we also need to consider the counterpart's position regarding site, permits, and financing. In the Czech Republic, a preliminary bid has been submitted and is under review by the Czech side. In T?rkiye, initial discussions on nuclear power projects with KEPCO are ongoing.

- What is the future direction of energy policy?

▲ The basics of energy policy are stable supply, more economical supply, and safe supply. Unfortunately, no energy source satisfies all three. If we consider price alone, greenhouse gas emissions are high. The energy mix is extremely important. We have stated that we will focus on strengthening energy security. Overall, under Korea's conditions, there is no energy source as important as nuclear power.

Kang Kyung-sung, Vice Minister of the Ministry of Trade, Industry and Energy, is speaking at a press briefing held at the Government Complex Sejong on the 14th.

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