KEPCO to Promote "Gradual Increase in Electricity Rates"... Prerequisite is 'High-Intensity Additional Self-Rescue Plan'

Korea Electric Power Corporation (KEPCO), urgently needing financial improvement due to large-scale deficits, is pushing for a gradual increase in electricity rates. However, since the government maintains the policy of 'first (prioritize) self-rescue measures, then (afterwards) rate hikes,' the intensity of KEPCO's additional self-rescue measures is expected to be a variable that will determine whether electricity rates will increase and by how much.

On the 19th, KEPCO President Kim Dong-chul stated in a business report during the National Assembly’s Industry, Trade, Energy, Small and Medium Enterprises Committee’s audit, "We will pursue a stepwise electricity rate increase reflecting the remaining factors for rate hikes and establish a cost-based rate system."

He added, "We will comprehensively innovate KEPCO’s management to overcome this critical crisis early. To that end, we will swiftly implement existing self-rescue measures and also seek additional measures."

Earlier, on the 4th, President Kim said at a press briefing, "When the government implemented the fuel cost linkage system in 2021, it decided to raise the fuel cost by 45.3 KRW per kilowatt-hour this year, but the current level is below that. It is appropriate to raise electricity rates as much as possible within the 25.9 KRW margin excluding the 19.4 KRW of fuel cost already increased this year."

The government also agrees on the necessity of raising electricity rates. However, it holds the position that KEPCO must present self-rescue measures at a level that the public can accept before any rate increase. On the 17th, Moon Sung-kyu, Minister of Trade, Industry and Energy, said, "We cannot avoid considering electricity rate hikes," but added, "It is not acceptable to pass all the burden onto the public. We need to review various management rationalization plans and financial improvement plans before making a decision."

KEPCO plans to first release a 'second additional self-rescue plan' within this month, which will include workforce efficiency measures such as voluntary retirement and additional asset sales. In May this year, KEPCO announced a financial improvement plan totaling 25.7 trillion KRW, expanding the existing 20.1 trillion KRW fiscal soundness plan by 5.6 trillion KRW to achieve early management normalization. President Kim emphasized, "The scale of additional self-rescue efforts includes parts that can be converted into monetary amounts and parts that cannot, such as downsizing organizations and improving workforce efficiency. However, it will be an unprecedented scale so far."

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