DistantNews
Support us
Third-Quarter Electricity Rates Frozen; Fuel Cost Adjustment Rate Remains 5 Won Per kWh
🇰🇷 South Korea /Energy & Infrastructure

Third-Quarter Electricity Rates Frozen; Fuel Cost Adjustment Rate Remains 5 Won Per kWh

From Dong-A Ilbo · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Official statement New plan
  • South Korea will freeze its third-quarter electricity rates, maintaining the fuel cost adjustment rate at 5 won per kWh.
  • Despite a decrease in international fuel prices, the government decided to keep rates unchanged to manage Korea Electric Power Corporation's (KEPCO) accumulated deficit.
  • This marks the 17th consecutive quarter without a change in the fuel cost adjustment rate, highlighting ongoing financial challenges for KEPCO.

South Korea has decided to freeze electricity rates for the third quarter of the year, from July to September. The fuel cost adjustment rate will remain at 5 won per kilowatt-hour (kWh), the same level it has been for an extended period.

This decision comes despite a recent decrease in international energy prices, which would typically warrant a reduction in electricity costs. However, the government and Korea Electric Power Corporation (KEPCO) opted to maintain the current rates. The primary reason cited is the need to manage KEPCO's substantial accumulated deficit.

Reflecting the fuel cost adjustment rate calculation, the necessary adjustment for the third quarter was calculated at -3.4 won per kWh due to lower international fuel prices. Nevertheless, considering KEPCO's financial situation and the significant amount of unreflected fuel costs, the authorities decided to keep the rate at the existing 5 won per kWh.

The government decided on this fuel cost adjustment rate considering KEPCO's financial situation and the considerable amount of unadjusted fuel costs.

— Korea Electric Power CorporationExplaining the rationale behind maintaining the current electricity rates.

This marks the 17th consecutive quarter, spanning over four years, that the fuel cost adjustment rate has remained unchanged. The electricity bill is composed of basic charges, energy usage charges, climate and environment charges, and fuel cost adjustment charges. The fuel cost adjustment charge, in particular, reflects fluctuations in fuel prices like liquefied natural gas (LNG).

KEPCO has been informed that it must thoroughly implement self-help measures for management normalization. The company's financial structure remains precarious, with its total consolidated debt reaching 206.2 trillion won in the first half of last year. Interest expenses alone amounted to approximately 12 billion won per day, totaling 3.2794 trillion won by the third quarter of last year.

We have been notified to thoroughly implement self-help measures for management normalization.

— Korea Electric Power CorporationAcknowledging the directive to improve KEPCO's financial management.
DistantNews Editorial

Originally published by Dong-A Ilbo in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

More Stories

From Our Blog