KEPCO’s asset sales of $314 million fuels concerns of power price hikes

[Photo by Park Hyung-ki]

Korea Electric Power Corp. (KEPCO) raised only 400 billion won ($314 million) from selling assets in the last six months in its efforts to improve its financials, raising concerns that the utilities provider will have to raise electricity prices again next year as losses are expected to reach 30 trillion won this year.

KEPCO secured 363.1 billion won by disposing of its assets, including four old office buildings and unused lands, the company said Monday. In addition, it raised 4.5 billion won by selling its stake in Korea Electric Vehicle Charging Service (KEVCS).

However, the downbeat stock and property markets amid the global economic recession have poised challenges to its efforts to improve its financials through asset sales. “We haven’t sold a property since October,” said an official from the firm.

KEPCO also streamlined its businesses and cut costs on electricity purchases to save 1.98 trillion won, falling short of its goal of 2.63 trillion won.

Experts are raising voices for fundamental reforms, including an increase in electricity rates. “KEPCO’s restructuring requires urgent action considering the rapid-changing energy market,” said Sohn Yang-hoon, an economics professor at Incheon National University. Experts also agree that high rises in electricity rates will be unavoidable.