[2024 National Audit] KEPCO President "Normalize Electricity Rates to Expand Infrastructure"... Minister of Industry "Issue of Timing and Level"

At the Industry Committee Audit on the 14th

Kim Dong-chul, President of Korea Electric Power Corporation (KEPCO), emphasized on the 14th that normalizing electricity rates is necessary to secure investment funds for essential power grids and ensure the sustainability of the power ecosystem. On the same day, An Deok-geun, Minister of Trade, Industry and Energy, reaffirmed the policy to raise electricity rates, describing it as a "matter of timing and level," but refrained from specifying the exact timing and scale of the increase.

On this day, President Kim stressed the "normalization of electricity rates" during the National Assembly’s Trade, Industry, Energy, Small and Medium Enterprises Committee’s audit of KEPCO and other public energy institutions held at KEPCO headquarters in Naju, Jeollanam-do.

Kim Dong-chul, President of KEPCO. (File photo)

President Kim stated, "We must support the innovative growth of national core industries such as artificial intelligence (AI) and semiconductors through timely expansion of the power grid," adding, "We will promote the normalization of rates to secure investment funds for essential power grids and ensure the sustainability of the power ecosystem." In other words, he indicated that raising electricity rates is necessary for the growth of national core industries.

He said, "The price signal function must be strengthened to improve nationwide energy efficiency and technological innovation," and added, "Costs should be reasonably reflected in rates to induce the emergence and growth of energy innovation companies."

KEPCO has accumulated a deficit of around 43 trillion won by selling electricity at prices lower than production costs. Recently, KEPCO recorded consecutive profits over four quarters due to the decline in international energy prices. However, this is insufficient to resolve its massive debt. In the first half of this year alone, KEPCO spent 2.28 trillion won on interest expenses, increasing its debt to 202.8905 trillion won.

The government also agrees on the necessity of electricity rate normalization, i.e., an increase. The issue lies in the timing. Earlier in August, Minister An Deok-geun said, "We will raise electricity rates. It is a matter of timing," and during the KEPCO audit on the same day, he emphasized, "(Electricity rates) need to be normalized quickly."

However, he showed a cautious stance regarding the specific timing and level of the increase. Minister An said, "Our (Ministry of Trade, Industry and Energy) staff are naturally reviewing plans for the increase and will proceed with consultations with related ministries based on this," adding, "Since gas rates also need to be normalized, we are monitoring the normalization of energy rates, including electricity and gas."