SMEs Demand KEPCO Implement 'Payment Linked System and Tariff Structure Reform'

On the 7th, Meeting with KEPCO President Kim Dong-cheol at the Korea Federation of SMEs
Calls for Spring and Autumn Rate Plans Also in June and November

The small and medium-sized enterprises (SME) sector demanded that Korea Electric Power Corporation (KEPCO) actively implement the payment linkage system for supply payments and carry out a mid- to long-term reform of the electricity tariff system.

Kim Dong-chul, President of Korea Electric Power Corporation, visited major facilities including stadiums in Gangneung City, Gangwon Province, where the 2024 Gangwon Winter Youth Olympic Games are being held, on the 26th of last month to inspect the operation status of power facilities.
[Photo by Yonhap News]

On the 7th, the Korea Federation of SMEs held a 'Meeting between Kim Dong-cheol, President of KEPCO, and SME representatives' at the Federation's office in Yeouido, Yeongdeungpo, Seoul. Attendees included Kim Ki-moon, President of the Federation of SMEs, Han Byung-jun, Chairman of the Korea Information Industry Cooperative, Park Pyeong-jae, Chairman of the Korea Surface Treatment Industry Cooperative, and Lee Jae-kwang, Chairman of the Korea Electric Energy Industry Cooperative.

The SME representatives first requested KEPCO to actively utilize the payment linkage system for supply payments targeting small and medium-sized partner companies. KEPCO's annual purchase amount of SME products is 6.2 trillion KRW. Since October last year, KEPCO has participated as a partner company in the Ministry of SMEs and Startups' payment linkage system, but it still applies the existing contract amount adjustment system to some companies. The payment linkage system can be applied when the price of raw materials, which account for more than 10% of the supply payment, fluctuates within 10%, allowing contract amount adjustments even if the total amount rises by only 1%. In contrast, the contract amount adjustment system allows adjustments only when the total amount rises by 3%.

The SME sector also proposed the preparation of a mid- to long-term electricity tariff reform plan. In particular, they requested that the spring and autumn tariff systems be applied in June and November as well. SMEs pay the more expensive 'peak tariff' during the winter tariff period from June to August and from November to February, compared to the spring and autumn seasons. They also pay medium-load tariffs during daytime hours on Saturdays, which are weekends, and argue that these should be lowered to low-load tariffs.

During the meeting, support for replacing energy-efficient equipment in SME joint facilities was also requested. For manufacturing companies that consume a lot of electricity, replacing old equipment is necessary to improve energy efficiency. The SME sector said, "If equipment is replaced with higher energy efficiency grade equipment, we ask KEPCO to partially support the costs."

Additionally, there was a request to change the lowest-price bidding system to a qualified evaluation bidding system when purchasing major equipment.

Kim Ki-moon, President of the Federation of SMEs, said, "We hope KEPCO will become a reliable pillar supporting SME market access and actively reflect our suggestions." Kim Dong-cheol, President of KEPCO, responded, "We will actively communicate and cooperate to strengthen SMEs' technological innovation and competitiveness."

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