[2023 National Audit] Kim Dong-cheol, KEPCO President, "Differences with Government on Electricity Rate Hike Unavoidable"

Kim Dong-cheol, President of Korea Electric Power Corporation (KEPCO), stated on the 19th that "there is inevitably a difference between KEPCO's position and the government's position regarding the electricity rate hike."

At the National Assembly's Industry, Trade, Energy, Small and Medium Enterprises Committee hearing on KEPCO and others held that day, President Kim said, "Ultimately, there is no difference in stance when it comes to overcoming KEPCO's financial crisis."

Earlier this month, President Kim held a press conference and said, "Due to the surge in international energy prices and the nuclear phase-out policy, power generation costs have skyrocketed, but electricity rates have been frozen for eight consecutive quarters since 2020, putting KEPCO in an absolute crisis threatening its existence." He added, "There are various considerations in the government's national administration, so the decision on whether to raise electricity rates will be made by the government, but I think a decisive action is necessary."

He continued, "When the government implemented the fuel cost linkage system in 2021, it decided to raise the fuel cost by 45.3 won per kilowatt-hour this year, but the current level is below that," emphasizing, "It is appropriate to raise electricity rates as much as possible within the 25.9 won range, excluding the 19.4 won of the fuel cost increase applied this year."

However, Moon Sung-kyu, Minister of the Ministry of Trade, Industry and Energy, the department responsible for electricity rates, appeared on a broadcast on the 17th and said, "It is not acceptable to pass all the burden onto the public," adding, "We need to review various management rationalization measures and financial improvement plans." He reiterated that KEPCO's self-help efforts must precede any electricity rate increase.

President Kim showed a cautious stance regarding the timing of the decision on the electricity rate hike. When Kim Hoe-jae, a member of the Democratic Party of Korea, asked, "Does KEPCO intend to request the government to lower the electricity rate increase?" President Kim replied, "Opinions are being raised and discussed, including by the Ministry of Industry and the Ministry of Strategy and Finance."

On that day, through a business report, President Kim explained, "We will innovate KEPCO's management comprehensively to overcome this critical crisis early," adding, "To this end, we will accelerate the implementation of existing self-help measures and discover additional measures."

He further stated, "We will mobilize all possible means, such as diversifying asset sales and adjusting welfare benefits," and "We will downsize the head office organization, streamline the organization through regional integration, and reallocate personnel to core businesses."

KEPCO plans to release a '2nd additional self-help plan' this month, including workforce efficiency and additional asset sales. In May this year, KEPCO announced a financial improvement plan totaling 25.7 trillion won, expanding the existing 20.1 trillion won financial soundness plan by 5.6 trillion won for early management normalization.

Kim Dong-chul, President of Korea Electric Power Corporation, is responding to a lawmaker's question at the National Assembly's Industry, Trade, Energy, Small and Medium Business Committee audit held on the 19th.
[Photo by Yonhap News]

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