KEPCO to Maintain Fuel Cost Adjustment Rate at '5 Won' in Q1 Next Year... Electricity Rates Frozen
Despite International Fuel Cost Decline, Decision Made Considering KEPCO's Accumulated Deficit
Korea Electric Power Corporation (KEPCO) announced on the 21st that it will maintain the fuel cost adjustment unit price at 5 won per kilowatt-hour (kWh) for the first quarter of next year, the same level as the fourth quarter of this year.
Electricity charges consist of a basic charge, electricity consumption charge (standard fuel cost), climate environment charge, and fuel cost adjustment charge.
The fuel cost adjustment unit price is determined by the 21st of the month before the start of each quarter. It reflects changes in fuel costs such as bituminous coal and liquefied natural gas (LNG) over the three months immediately preceding the quarter in the electricity rates. The fuel cost adjustment unit price is applied within a range of ±5 won per kWh, and the maximum rate of 5 won is already in effect.
For the first quarter of next year, although the international fuel price declined and the unit price was calculated at -4 won per kWh, KEPCO decided to maintain the fuel cost adjustment unit price at 5 won per kWh considering KEPCO's accumulated deficit and the fact that fuel costs had not been adjusted and rates were frozen for some time.
The Ministry of Trade, Industry and Energy and other power authorities comprehensively considered the fuel cost adjustment unit price, KEPCO's accumulated deficit, and inflation, and decided to freeze electricity rates for the first quarter of next year. Previously, the government and KEPCO raised rates consecutively in the first and second quarters of this year and froze them consecutively in the third and fourth quarters.
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A KEPCO official said, "The government notified us to continue applying 5 won per kWh, the same as the fourth quarter of this year, considering KEPCO's financial situation and the significant amount of unadjusted fuel cost adjustment charges," adding, "We will do our best to implement thorough self-help efforts for KEPCO's management normalization as requested."
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