Anonymous Community's Warning Post on 'HanJeon Privatization' Sparks Debate
Government to Announce Plan for Private Opening of Power Grid Next Month
As the government shows signs of opening the power grid business, currently monopolized by Korea Electric Power Corporation (KEPCO), to the private sector, a warning from an employee stating that "if KEPCO is privatized, an electricity bill hell will unfold" is drawing attention.
"We must not ignore KEPCO privatization" claim
Korea Electric Power Corporation officials are inspecting the current power supply status. This is unrelated to the specific content of the article. Photo by Jang Jin-hyeong aymsdream@
On the 28th, a post titled "We really must not ignore KEPCO" was published on an anonymous workplace community. The author, Mr. A, an employee of Korea Midland Power Co., a power generation public enterprise under KEPCO, warned, "(If KEPCO is privatized) electricity bills will reach tens of thousands of won per month."
Mr. A stated, "If the company is split due to privatization, whenever field workers go on strike, parts of the country will experience blackouts," adding, "Electricity cannot be stored and must be supplied timely according to demand, so it is appropriate for the country to manage it. The electricity infrastructure business must never be privatized."
Previously, the government indicated a policy to open the power grid construction business, which KEPCO has monopolized, to the private sector. This is due to the severe financial crisis with accumulated deficits reaching 200 trillion won and the judgment that timely construction of the power grid is more important than power generation itself. This policy is expected to be included in the 'Power System Innovation Measures' scheduled for early next month.
Similar to social overhead capital (SOC) projects such as roads and airports involving private companies, private enterprises are expected to be allowed to participate in KEPCO's transmission line business. When private companies submit business plans, the so-called 'Power Grid Expansion Committee' under the Prime Minister will review them. The government will focus on conflict mediation and improving permits and approvals.
'Countdown to privatization?'... "No transfer of management rights"
However, as Mr. A claimed, concerns are emerging that this measure could be the countdown to KEPCO privatization. Starting with partial opening of the national core industry’s power business rights to the private sector, privatization could accelerate.
Most comments on the post expressed concerns that "if the private sector enters, electricity rates will rapidly increase." Conversely, some argued that "if left as is, KEPCO bonds will continue to be released, interest rates will rise, and only ordinary people will suffer," thus privatization is necessary.
However, in February during a National Assembly economic sector questioning session, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho responded to the KEPCO privatization controversy by stating, "We will not proceed with privatization that completely transfers overall management and ownership rights."
KEPCO posts 2 trillion won operating profit in Q3... tense despite first profit in 10 quarters
Meanwhile, KEPCO succeeded in turning a profit for the first time in 10 quarters by posting approximately 2 trillion won in operating profit in the third quarter of this year, thanks to electricity rate hikes and stabilization of international energy prices.
However, the outstanding receivables from Korea Gas Corporation, which supplies gas below cost price, have increased to 15.5 trillion won, leaving pressure for additional electricity and gas rate hikes.
The securities industry expects KEPCO to record an operating loss of around 600 billion won again in the fourth quarter due to the high oil price and high exchange rate environment, which negatively affect KEPCO’s revenue structure.
Although about 2 trillion won in operating profit was recorded this time, it is insufficient to resolve KEPCO’s massive accumulated deficits since 2021.
KEPCO President Kim Dong-chul stated, "The power ecosystem could be at risk of collapse," and mentioned that electricity rates need to be raised by about 25 won per kWh as part of 'normalization.'
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