Sogongyeon "Cooling Cost Bombs Due to Monsoon and Scorching Heat... Practical Measures Needed"

The Korea Federation of Micro Enterprise (KFME) urged the government to establish fundamental energy measures to address the difficulties faced by small business owners, who are suffering from sales declines due to the rainy season and heatwaves, compounded by soaring cooling costs.

In a statement on the 3rd, the KFME said, "The government announced the day before that it would additionally implement a high-efficiency equipment support project to reduce energy consumption and ease the burden of cooling costs for small business owners," but added, "Although the government has introduced such support measures multiple times, small business owners have not felt a reduction in their electricity bills."

The Ministry of Trade, Industry and Energy announced the day before that it would additionally implement the high-efficiency equipment support project (supporting the installation of doors on refrigerators in food stores). This project helps food stores convert or replace open refrigerators in use with door-type refrigerators that meet certain government standards for insulation, safety, and visibility. The government supports 40% of the replacement cost. Additionally, since the 17th of last month, the government has been supporting 40% of the cost of replacing old cooling and heating devices for small business owners through the ‘Old Cooling/Heating Device Replacement Support Project.’ Korea Electric Power Corporation (KEPCO) has also expanded the option of installment payments for electricity bills to small business owners from June to September this year. However, the KFME criticized these measures, saying they do not address the fundamental difficulties faced by small business owners.

The KFME stated, "The refrigerator door installation project is limited to certain business types, and payment deferrals only postpone debt without providing actual discounts," adding, "PC rooms and convenience stores must operate air conditioners 24 hours a day even when there are no customers, and restaurants, cafes, and hair salons must lower indoor temperatures as outdoor temperatures rise to attract customers, making continuous use of air conditioners during business hours unavoidable." They pointed out that many small business owners are exposed to a cooling cost crisis.

The KFME also said, "Electricity rates have increased five times from last year through the second quarter of this year, with a total increase of 40.4 KRW per kWh, representing a 39.6% rise," and criticized, "Although electricity rates were frozen for the third quarter of this year, small business owners are still subject to the expensive general (commercial) electricity rates, which is a heavy burden."

The KFME further urged, "Small business owners urgently need immediate discounts on electricity bills to avoid the cooling cost crisis," pointing out, "France has reduced electricity taxes by 10.8 trillion KRW, and Spain has lowered the value-added tax on electricity bills to 10%, implementing substantial discount policies."

The KFME called on the government not to focus solely on short-term measures such as payment deferrals but to prepare mid- to long-term measures including electricity bill discounts during the high-demand summer season and reforming the electricity rate system for small business owners. The KFME stated, "Small business owners, who are pushed to the limit by the triple crisis following COVID-19, should be included as an energy-vulnerable group under energy support legislation," and added, "The government must promptly establish comprehensive policies that small business owners can feel, such as creating a dedicated electricity rate system for small business owners through electricity rate system reform."