Minister nominee blames nuclear phaseout for Kepco debt

Minister nominee Bang Moon-kyu blames the previous administration's nuclear phaseout and crude oil price hikes for Korea Electric Power Corporation's mounting debt.

Bang Moon-kyu, the nominee for the new Minister of Trade, Industry and Energy, speaks during a parliamentary confirmation hearing Wednesday, held at the National Assembly in western Seoul. [NEWS1]

Bang Moon-kyu, nominee for the new Minister of Trade, Industry and Energy, pointed at the previous administration’s nuclear phaseout policy as one of the major reasons behind state-run utility Korea Electric Power Corporation (Kepco)'s mounting debt.

Bang’s comment came during a parliamentary confirmation hearing at the National Assembly in western Seoul on Wednesday.

“One of the most fundamental reasons for the electricity rate being too cheap [compared to the production cost] was the nuclear phaseout program, I think,” said Bang, citing the Moon Jae-in administration’s nuclear phaseout policy.

He also blamed crude oil price hikes last year for the Kepco’s burgeoning debt.

Kepco's has accumulated over 47 trillion won ($35.3 billion) in operating loss since 2021 due to global fuel price hikes last year. Kepco’s total debt rose to 201 trillion won in June this year, surpassing 200 trillion won for the first time.

While Bang said that “the fundamental solution for Kepco’s massive deficits is an electricity rate adjustment,” he stressed that the price increase “should not come before a bone-crushing restructuring.”

In May, Kepco announced a 25-trillion-won restructuring plan to restore its fiscal soundness that will run through 2026. The plan includes cutting employee salaries and unloading assets.

Bang also emphasized that “the slowdown of the Chinese economy is the biggest risk factor in Korea’s economy,” adding that “a practical approach for industrial policy is more important than ever, that we need to seek our benefit by bolstering economic ties with China while fostering our own capabilities in advanced industries in conjunction with the global advanced semiconductor supply chain.”

Bang has served as the minister of government policy coordination under the Yoon Suk Yeol government.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]