[Column] Need to Accelerate the 'Electricity Tiered Pricing System' to Resolve 'Rate Structure Contradictions'

With the promulgation of the 'Special Act on the Activation of Distributed Energy' on the 13th, which was passed last month, the foundation for imposing regionally differentiated electricity rates has been laid. As early as next year, electricity charges could vary depending on the distance between the consumer (region) and the power plant. Although transmission costs increase with longer distances, until now, the same rates have been charged regardless of transmission distance. This provides a basis to resolve such fairness issues.

After the law's passage, local governments with many or nearby power plants, such as Ulsan, Gyeongbuk, and Jeju, collectively issued messages 'welcoming' it. Lower electricity rates create favorable conditions for attracting businesses. These regions have been leading the push by commissioning research on differentiated rate systems to local research institutes even before the law was passed.

However, the Distributed Energy Act only contains a foundational clause stating that "electricity rates can be set differently considering transmission and distribution costs." For proper implementation, the amendment to the Electricity Business Act currently proposed in the National Assembly must also be passed. The scope of regions and criteria for rate setting have yet to be determined. This has raised concerns that the clause might become obsolete. A staff member from the office of the National Assembly's Industry, Trade, Energy, Small and Medium Enterprises Committee (the relevant committee) said, "Although the foundational law has passed, considering public opinion, is it practically possible to differentiate electricity rates by region? Unless someone takes the initiative to push it forward, we cannot guarantee concrete implementation of the system."

Local governments far from power plants, such as Seoul, Gyeonggi, and Daejeon, recently expressed concerns during the government's opinion-gathering process on the regional differentiated rate system. Kim Jae-woong, Director of the Green Energy Division of Seoul City, said, "While we fully agree with the purpose of the system, aren't subsidies already provided under the law supporting areas around power plants?" raising the issue of overlapping benefits. However, providing benefits through subsidies and structurally changing the rate system itself are different matters.

The differentiated electricity rate system is ultimately the path forward. Gasoline prices at gas stations also vary depending on location. Why should electricity rates naturally be the same nationwide? However, since the public is accustomed to the current rate system, a careful consensus-building process is necessary. This is not a matter to be brushed aside with the excuse that "it is only a foundational clause in the law, so there is no obligation to implement it." The government must promptly sit down with experts and devise concrete plans.

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