KEPCO vows to cut labor cost amid snowballing losses

Korea Electric Power Corp. headquarters in Seoul [Photo by Lee Chung-woo]

South Korea’s state utility Korea Electric Power Corp. (KEPCO) on Friday vowed to introduce measures as early as possible to improve its financial soundness amid mounting losses.

“As part of a painstaking effort, we will soon unveil additional measures that include plans to cut labor cost, innovate workforce, support energy-vulnerable groups, and improve public convenience,” KEPCO said in a statement. “Ten power companies including KEPCO and six power generation firms will carry out a financial soundness plan that involves more than 20 trillion won ($15.1 billion) in a swift manner before electricity rates are adjusted to minimize the burden on the people,” it said.

Under the measures, KEPCO is considering a wage freeze for the entire employees this year as it suffers growing losses due to the delay in electricity rate hike for the second quarter.

KEPCO raised concerns that “a delay in the hike will undermine the stable supply of electricity as the current electricity sales price is far below the purchase price.”

It also added that the increase in KEPCO bond issuance will have a considerable impact on the national economy, leading to financial market distortion and instability of the energy ecosystem.