Korea to decide on electricity bill increase on June 20
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According to an announcement by the Ministry of Trade, Industry and Energy on Tuesday, the state-run utility Korea Electric Power Corp. (Kepco) will submit an evaluation of factors that support a hike for the third quarter. The submission is due by June 16. The evaluation is based on import fuel prices, set to be released on June 15.
In view of potential inflation risks following a rate hike and the current losses at KEPCO, the government will deliver its opinion on the price increase by June 20. It has the discretion to delay or suspend the increase, though the evidence submitted by KEPCO supports a hike.
The KEPCO will decide on whether it raises rates on June 21.
The government has recently raised the rate by 8 won ($0.01) per kilowatt hour on May 16, a decision that was delayed by more than 40 days amid inflationary pressure and public criticism of a bill hike.
Critics said, however, that the recent hike wasn’t sufficient to ease the mounting losses at KEPCO and called for additional hikes as the public still uses the energy at a lower price than generation costs.
Although the government called for an increase of 51.6 won per kilowatt hour earlier this year, the actual increase during the first two quarters was 21.1 won per kilowatt hour.
However, it seems complicated for the government to raise a rate in an additional hike immediately after the increase last month.
Some government officials and industry sources said they expect a freeze on price increases for the third quarter, given the global downward pressure on energy prices and the impacts of a hike on households during the summer.
The governing People Power Party (PPP) is said to have been passive in negotiations with the government and private experts on a price increase because of the concerns that an additional hike in public utility bills would not be a wise choice less than a year ahead of the general election in the country.
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