[2022 National Audit] Lee Chang-yang "Electricity Fund Base Weakened... Must Be Used for Original Purpose"

Minister Lee Chang-yang of the Ministry of Trade, Industry and Energy responding
(Seoul=Yonhap News) Reporter Ha Sa-heon = Minister Lee Chang-yang of the Ministry of Trade, Industry and Energy is answering questions from lawmakers at the National Assembly’s Trade, Industry, Energy, Small and Medium Enterprises and Startups Committee hearing held at the National Assembly in Yeouido, Seoul, on the morning of the 4th. 2022.10.4 [Photo by the National Assembly Press Photographers Group]
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[Asia Economy Sejong=Reporter Lee Junhyung] Lee Chang-yang, Minister of Trade, Industry and Energy, stated that the electricity fund should be used according to its original purpose amid criticisms that it has been excessively spent on renewable energy projects.

Minister Lee made these remarks on the 4th during the National Assembly’s Trade, Industry, and Small and Medium Business Committee’s audit. He said, "The electricity fund has become considerably vulnerable due to the promotion of renewable energy distribution," adding, "Expenditures have exceeded revenues."

The electricity fund is a quasi-tax fund created by charging 3.7% of electricity fees. The Moon Jae-in administration utilized the electricity fund for expanding renewable energy, compensating costs related to the nuclear phase-out policy, and establishing the Korea Energy Engineering University (KEPCO University). Consequently, there have been ongoing criticisms that the electricity fund has been used in ways inconsistent with its original purpose of "power industry development and supply-demand stability."

As expenditures increased, the balance of the electricity fund has rapidly depleted. The fund’s balance shrank by nearly 3 trillion won, from 4.13 trillion won in 2018, the second year of the Moon administration, to 1.18 trillion won last month.

Minister Lee said, "The electricity fund should be used according to its original purpose," and added, "I believe the fund’s foundation needs to be solidly reinforced going forward." He also noted, "However, it is necessary to carefully consider abolishing or exempting the electricity fund," explaining, "Because essential investments remain, such as in power plant surrounding areas and transmission facility investments."

During the audit, there were also criticisms regarding Korea Electric Power Corporation (KEPCO) subsidiary KEPCO KDN’s plan to sell its shares in YTN. Kim Hoe-jae, a member of the Democratic Party of Korea, said, "The sale of YTN shares can only be seen as privatization and media control," and urged, "The plan to sell KEPCO KDN’s YTN shares should be withdrawn."

Minister Lee responded, "I understand that the sale of YTN shares was recommended by an internal task force within the Ministry of Trade, Industry and Energy in accordance with the government’s public institution innovation guidelines," and stated, "It is inappropriate to link KEPCO KDN’s sale of YTN shares to media control or privatization." He added, "This is approached solely from the perspective of public institution innovation," and noted, "KEPCO KDN has held YTN shares for 25 years, but the returns were not good."