And although criticisms of the system have always been common, especially during summer months, this year’s protests have been more lively than usual, with political parties and citizens taking action to bring about change to the system, which they say is only burdening the livelihoods of ordinary citizens. (image: KobizMedia/ Korea Bizwire)
SEOUL, Aug. 6 (Korea Bizwire) – Summer heat is scorching the peninsula, but Korean households are refraining from using air conditioning units, with widespread worry over electricity bill ‘surprises’ resulting from the national progressive electricity billing system.
The system was instituted to encourage frugal energy consumption by charging higher rates for higher electricity use. But the problem is, the system only applies specifically to household electricity rates.
According to officials, household electricity rates are governed by a six-stage system, from stage 1 (100kWh or less per month) to stage 6 (501kWh and above per month), and the stage 6 rate (709.5 won/kWh) is currently 11.7 times more expensive than the rate for stage 1 (60.7 won/kWh).
And although criticisms of the system have always been common, especially during summer months, this year’s protests have been more lively than usual, with political parties and citizens taking action to bring about change to the system, which they say is only burdening the livelihoods of ordinary citizens.
Korea’s second opposition party, The People’s Party, revealed on July 29 that it will push forward with measures to reduce the system’s stages to ease the burden on households, while charging higher rates to businesses with high electricity consumption. More specifically, it plans to cut the current six-stage system down to four stages, and lower electricity rates to ultimately reduce charges by 1 trillion won annually.
Citizens have also stepped forward. On July 29, an online petition was launched on Daum’s Agora, with users demanding a repeal of the current billing system. Agora is one of the largest internet debate bulletin boards in Korea. The petition’s creator stated that it’s “unreasonable to apply progressive electricity system to households only.”
Yet, the government is standing firm in the face of widespread opposition, with officials insisting that now is not the right time for reform.
“If we cut down the number of stages (of the system) now, things will get worse, and there’s a possibility that someone else will have to cover the deficit,” said Woo Tae-hee, second vice minister of MOTIE (Ministry of Trade, Industry & Energy).
The government claims that the system was designed to lessen the burden on low-income families, while preventing high-income families from using too much electricity, and rashly reforming the system could just end up being a money-saver for the rich.
Woo also noted that “changing the rates now could also have a negative influence on the management of the electricity supply,” which tends to peak during the summer, possibly resulting in a national electric power shortage.
The Korea Electric Power Corporation (KEPCO), which first implemented the system, is also hesitant to make any changes.
“We are aware of the widespread dissatisfaction with the system,” said KEPCO. “But changing electricity rates affects many different aspects of our economy, including consumer prices, household economy, and even new industries, which is why the matter must be decided after thorough evaluation.”
By Lina Jang (linajang@koreabizwire.com)
“We are aware of the widespread dissatisfaction with the system,” said KEPCO. “But changing electricity rates affects many different aspects of our economy, including consumer prices, household economy, and even new industries, which is why the matter must be decided after thorough evaluation.”