KEPCO Freezes Electricity Rates in Q2... Maintains Fuel Cost Adjustment Unit Price at 5 Won per kWh

Electricity rates for the second quarter (April to June) of this year will be maintained at the current level.

On the 21st, Korea Electric Power Corporation (KEPCO) announced that the fuel cost adjustment unit price for the second quarter will be maintained at 5 won per kWh (kilowatt-hour), the same as the current rate.

Accordingly, the basic charge, electricity consumption charge, and climate environment charge will not be adjusted, so electricity rates will remain the same as in the first quarter.

Electricity rates consist of the basic charge, electricity consumption charge, climate environment charge, and fuel cost adjustment charge. Among these, the fuel cost adjustment charge is adjusted quarterly to reflect fluctuations in fuel prices such as bituminous coal and liquefied natural gas (LNG), and is controlled within a range of ±5 won.

For the second quarter of this year, there was a possibility that the adjustment unit price would be lowered to -4.2 won per kWh due to a decline in fuel costs over the past three months, but the Ministry of Trade, Industry and Energy decided to maintain the current +5 won.

This is interpreted as a measure to alleviate the burden of KEPCO’s accumulated deficit of around 43 trillion won incurred from supplying electricity below cost from 2021 to 2023. Although operating profit turned positive last year, a cumulative deficit still remains, making securing financial soundness urgent. At the end of last year, KEPCO’s consolidated total debt was recorded at 205.181 trillion won, an increase of 2.731 trillion won from the previous year, marking an all-time high.