SME Sector "Measures Needed to Alleviate Corporate Burden Due to Electricity Rate Increase"

Korea Federation of Small and Medium Business States Position on Industrial Electricity Rate Increase Affecting SMEs

The small and medium-sized enterprises (SME) sector expressed regret on the 8th over the government's increase in industrial electricity rates. The Korea Federation of SMEs issued a statement saying, "While we understand that this rate hike is a policy carefully devised by the government considering Korea Electric Power Corporation's (KEPCO) deficit and the high inflation situation, it is necessary to examine whether the targeted increase only on industrial electricity rates aligns with the principle of cost-based electricity pricing.

The industry further stated, "The cost recovery rate for industrial electricity, which is often misunderstood as using cheap electricity, surpassed that of residential electricity more than 10 years ago, and in September last year, an additional burden of up to 11.7 won was imposed on industrial users. To gain public consensus on electricity rate hikes, the cost structure by usage must be transparently disclosed.

The Korea Federation of SMEs also urged that measures to alleviate the burden on SMEs due to the rate increase should be prepared simultaneously. The industry said, "The government should promptly lower the rate of the Electricity Industry Infrastructure Fund charge, which is unrelated to KEPCO's deficit, and devise a plan to include electricity costs in the delivery price linkage system to mitigate the impact on root SMEs with high energy costs."

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