Self-employed businesses see 45.7 percent surge in August electricity costs

[Photo by Yonhap]

This summer’s scorching heatwave has driven electricity consumption by mom-and-pop and self-employed businesses to record levels, with electricity bills in August 1.5 times higher than the previous year. As per data obtained by Representative Kim Hoi-jae of the Democratic Party of Korea on Thursday, the average electricity bill for general use in August amounted to 701,790 won ($525.49), a substantial increase compared to 410,047 won in 2021 and 481,660 won last year. It also represents a significant 45.7 percent surge from the same period last year.

However, the state-run Korea Electric Power Corporation (KEPCO) clarified that these figures are based on the average rates for the 6,974 electricity ratepayers under KEPCO’s bill installment payment program. According to this metric, the average electricity bill for August this year stood at 363,020 won, reflecting a rise of 54,310 won, or 17.6 percent, from the previous year.

The surge in electricity bills can be attributed to multiple factors, including the unprecedented heatwave and the substantial rate increase implemented since President Yoon Suk Yeol took office.

In August, Seoul experienced an average temperature of 27.2 degrees, the highest since 2018, and the average monthly peak electricity demand in August consequently hit an all-time high of 82.73 gigawatts (GW). KEPCO previously implemented three separate rate hikes in April, July, and October 2021, totaling an increase of 19.3 won per kilowatt hour. This year, the state-run utility has raised rates by an additional 13.1 won in the first quarter, and 8 won in the second quarter.

However, the burden of soaring utility costs on small businesses could become even bigger as the government is mulling a further increase in electricity rates to address the state-run utility’s mounting debt. In a separate announcement, Prime Minister Han Duck-soo stated, “We should take a prudent approach to a potential hike in electricity rates.”