Korea to hike electricity rates by 9.5% starting Jan. 1

Korea's electricity rates will be raised by a record 9.5 percent starting Jan. 1. An average household of four members is expected to pay additional 4,022 won ($3.20) per month.

Minister Lee Chang-yang of Trade, Industry and Energy, speaks during a press conference held at the government complex in central Seoul on Friday. [YONHAP]

Korea's electricity rates will be raised by a record 9.5 percent starting Jan. 1. An average household of four members is expected to pay additional 4,022 won ($3.20) per month.

Korea Electric Power Corporation (Kepco), the country’s sole power distributor, will raise electricity rates for the first quarter of 2023 by 13.1 won per kilowatt hour due to global fuel cost hikes and rising climate costs, the energy minister said Friday.

Gas rates will remain unchanged for the first quarter, in consideration of the electricity rate hike and heating costs during the winter season.

“It is with a heavy heart that I am announcing the rates adjustment plan for electricity and gas amid an unprecedented cold snap and high commodity prices,” said Trade, Industry and Energy Minister Lee Chang-yang on Friday during a press conference held at the government complex in central Seoul.

But Lee emphasized that “in order to address the fundamental issues by normalizing the Kepco and the Korea Gas Corporation’s business management and securing stable energy supply, a rate adjustment is inevitable.”

The state-run Kepco has been reporting a record loss. Its operating loss was 21.8 trillion won in the first nine months of the year, which is a 1,842.5 percent year-on-year surge.

It is anticipated that its operating loss will reach over 30 trillion won this year, following last year’s 9-trillion-won loss.

In order to relieve Kepco's rising deficit, rates for electricity should be raised by at least 51.6 won per kilowatt hour in 2023, which is three times the 19.3 won per kilowatt hour increase through 2022, according to the Energy Ministry’s latest report.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]