[Asia Economy Reporter Jang Sehee] Following the recent increase in the fuel cost adjustment rate for the fourth quarter, the government and Korea Electric Power Corporation (KEPCO) will adjust the climate environment fee to be applied next year by the end of this year.
KEPCO has already invested more than 1.7 trillion won in climate environment costs in the first half of this year alone, which is equivalent to 70% of last year's amount. Therefore, the climate environment fee is expected to rise compared to this year. From the consumer's perspective, electricity rates will increase once again.
According to industry sources on the 26th, the government and KEPCO plan to set the climate environment fee for next year in December. Electricity rates consist of a basic charge, electricity consumption charge, climate environment fee, and fuel cost adjustment fee.
Recently, the government raised the fuel cost adjustment fee for the fourth quarter by 3 won per kWh compared to the third quarter.
The climate environment fee is the amount charged to electricity consumers for the costs KEPCO incurs to reduce environmental pollution impacts such as greenhouse gas emissions.
Until last year, this fee was included in the electricity consumption charge, so consumers were not aware of it, but starting this year, it is listed as a separate item on the bill.
An official from the Ministry of Trade, Industry and Energy stated, "The climate environment fee changes every year and is calculated based on the actual costs incurred in the previous year, which are then recovered the following year. The fee for next year will be determined at the end of this year."
The climate environment fee is calculated by dividing the costs KEPCO incurred this year by the expected electricity sales volume for next year, and after consultation with the Ministry of Trade, Industry and Energy and the Ministry of Economy and Finance, as well as review by the Electricity Committee, it is finalized.
This year's climate environment fee is 5.3 won per kWh, accounting for about 4.9% of the total electricity rate. A household of four using an average monthly consumption of 350 kWh has been paying about 1,850 won per month, while industrial and general users (using an average of 9.2 MWh) have been paying around 48,000 won per month.
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