Will the price of electricity go up again? Prime Minister, “We need to consider adjusting the rate.”
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On September 7, Prime Minister Han Duck-soo spoke about the accumulated deficit of the Korea Electric Power Corporation (KEPCO) and said, “I think we should carefully consider adjusting the power rates if possible,” suggesting a review of another rate hike. KEPCO has raised its electricity rates every quarter under the Yoon Suk-yeol government.
When answering questions on the economy at the National Assembly Thursday, Prime Minister Han made the remark in response to Democratic Party of Korea legislator Kim Jung-ho’s question on the government’s solution to KEPCO’s deficit. The prime minister further said, “Most of all, we will have to increase the Bank of Korea’s loan limit,” and added, “We will have to seriously discuss various financial measures.”
Lawmaker Kim said, “There is word that KEPCO’s cumulative deficit is so big that their reserve will be depleted, and the corporation may eventually default on their obligations,” and asked, “You said a rate hike was inevitable, but are you willing to aggressively persuade the people to accept the rate hike and seek their understanding and cooperation?"
Prime Minister Han said, “When we do try to persuade the public, we will have to transparently explain to them how much the previous government actually raised the rate, despite that there were factors calling for higher prices.” He also said, “From what we know, the Yoon Suk-yeol government has raised rates by 33.5 won in four steps, once every quarter. The figures show that the Moon Jae-in government only raised the rate by 6.9 won.”
KEPCO raised the price of electricity 39.6% (40.4 won/kWh) in five stages, once every quarter since last April. In April 2022, the power rate increased by 6.9 won/kWh, then by 5 won/kWh in July, 7.4 won/kWh in October, 13.1 won/kWh in January, and 8 won/kWh in May. This in part reflected surging international energy prices.
Earlier on June 14, Second Vice Minister of Trade, Industry and Energy Kang Kyung-sung spoke on the electricity rate for the third quarter this year (Jul.-Sep.) and said, “We will have to review the data on settlement costs of fuel, which KEPCO is scheduled to submit, but when considering the burden on the citizens, it is not easy to raise rates (in Q3).”
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