Politicians at odds over electricity rate hike, housing rental scam measures

Electric meters are installed at a multi-housing area in Seoul. [Photo by Yonhap]

South Korea’s policies, such as electricity prices and housing rental scams that affect the livelihood of the general public, are being affected and delayed as the ruling and opposition parties are at odds with the general parliamentary election less than a year away.

One of the decisions that have been affected is the plan to increase electricity rates for the second quarter, which has been delayed for about 40 days as politicians have failed to reach a consensus on the increase because they are mindful of the public opinion that could affect next year’s election.

“The political circle is judging policies according to personal interests and is abandoning pending issues ahead of the general election,” said Lee Phil-sang, former president of Korea University. “The ruling party should have a sense of responsibility and persuade the opposition party to speed up the settlement of pending issues.”

According to multiple sources from the energy industry on Monday, state-run Korea Electric Power Corp. (KEPCO) will announce its first-quarter earnings this week. Data from financial market tracker FnGuide Inc. show that KEPCO is projected to post an operating loss of 5.3 trillion won ($4.1 billion) in the January-March period, remaining in the red for eight straight quarters since the second quarter of 2021.

KEPCO is also expected to suffer more than 9 trillion won in operating losses this year if the electricity rates are left unchanged after the second quarter. The government raised the rates for the first quarter by a record 13.1 won per kilowatt hour in January, but critics noted that the increase is not enough to help resolve its losses.

Concerns rise further as the state-run utility firm has been upping corporate bond issues to secure operation funds, weighing on its financial burdens.

Other policies are also being disrupted, such as special measures to compensate for the victims of the latest jeonse, or long-term housing deposit, scams. The ruling and opposition parties are at odds over the purchase of bonds for the refund of deposits.

The opposition party suggests that the government should expand the scope of the acknowledged victims while the ruling party says the move raises controversy over fairness. The two parties had planned to pass a special bill on jeonse scam victim compensation last week during a plenary session but they were not able to reach an agreement.

The Ministry of Land, Infrastructure and Transport announced measures to prevent further housing rental scams but excluded a plan of returning long-term rental deposits to the victims.