SME Sector "Electricity Rate Hike Raises Serious Concerns Over Business Deterioration"

The small and medium-sized enterprise (SME) sector has expressed concerns over worsening business conditions due to the government's increase in industrial electricity rates.

On the 23rd, the Korea Federation of SMEs stated in a press release, "Considering the difficulties faced by SMEs amid domestic demand deterioration and economic recession, it is regrettable that the issue of cross-subsidization of industrial electricity rates, which the SME sector has continuously demanded to be resolved, remains unaddressed. Instead, residential and general electricity rates have been frozen while only industrial electricity rates have been increased."

Amid the prolonged heatwave this year that has sparked controversy over 'electricity bill bombs,' the government began reviewing electricity rate hikes on the 23rd. An electricity meter is installed on a commercial building in Seoul. Photo by Kang Jin-hyung

They continued, "According to a survey by the National Assembly, 93.0% of small manufacturing businesses feel burdened by industrial electricity rates, and 74% responded that their operating profits have decreased due to the electricity rate hike. This recent rate increase could further worsen the business environment for SMEs, which rely on electricity for 79% of their energy consumption. In particular, root SMEs face serious business deterioration concerns as electricity costs account for nearly 30% of their manufacturing costs," they emphasized.

The Federation added, "The SME sector demands the prompt enactment of legislation to include electricity fees within the scope of the delivery price linkage system and a rate restructuring for root SMEs that reflects seasonal and time-of-use rate adjustments to mitigate the shock of electricity rate hikes and strengthen industrial competitiveness." They also urged, "We call for the swift establishment of support measures for SMEs’ mid- to long-term energy transition, such as expanding incentives for replacing high-efficiency equipment and improving energy efficiency."

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