Korea Electric Power Corp. (KEPCO) building in Seoul. (Yonhap)
SEOUL, Dec. 31 (Korea Bizwire) — The South Korean state-run utility firm Korea Electric Power Corp. (KEPCO) is likely to raise electricity costs next year, as it grapples with poor earnings amid a new energy policy drive, industry sources said Tuesday.
On Monday, the country’s sole electricity provider said it will scale down discounts offered to local households, along with other benefits, gradually.
Starting in 2020, KEPCO said it will suspend a deduction program that offered around 45 billion won (US$38.9 million) of discounts to 1.82 million households this year, in a move that can potentially lead to a hike in utility bills.
The discount program was aimed at inducing local households to reduce energy consumption by providing a price cut of around 10 to 15 percent on utility bills when they consume 20 percent less energy compared with the past two years.
While KEPCO explained the change came as the policy did not lead to a significant decrease in South Koreans’ energy consumption, the abolition is expected to lead to an increase of 24,700 won for the households.
The decision apparently came in line with the state-run firm’s belt-tightening moves, as KEPCO saw its third-quarter net profit more than halve to 241.1 billion won from a net profit of 737.2 billion won a year ago.
As for the EV charging stations, KEPCO said it will maintain the current level of discounts — a full deduction of the basic price and a 50 percent cut in additional fees — until June 2020, and gradually “normalize” the bill.
Discounts for EVs will be fully abolished in July 2022, although the price is expected to be still competitive against gasoline models.
Industry sources said KEPCO may attempt to raise electricity costs after the general election in April.
The company said the change was not aimed at improving its financial health, denying rising criticism that South Korea’s new energy policy centering on using less fossil and nuclear energy sources is leading to a bigger burden for local households.
(Yonhap)
