South Korea is likely to freeze electricity rates in the third quarter given the burdens on the people, as the government has increased the rates by a large margin this year and global energy prices have stabilized, a vice industry minister said Wednesday.
The government raised electricity rates by 5.3 percent on-year for the second quarter, or by 8 won (US$0.01) per kilowatt hour (kWh), compared with a 13.1 won increase per kWh in the first quarter of this year, due to high global energy costs and the mounting losses of state utility companies.
Whether or not to hike the rates has drawn attention, particularly as demand for electricity is expected to rise in the summer.
“I think it would be difficult to raise the rates factoring in the economic burdens on the people,” Second Vice Industry Minister Kang Kyung-sung told reporters.
“We need to factor in various related factors, including inflation, public burdens and the financial status of the Korea Electric Power Corp. (KEPCO). It is encouraging that global energy prices have been stabilized recently.”
The government is expected to announce a decision on the electricity rates for the July-September period around next week.
In 2022, KEPCO reported a record operating loss of 32.63 trillion won, more than quadruple from a year earlier due to limited electricity rate hikes amid high inflation and an economic slowdown. It also logged a 6.18 trillion won loss in the first quarter of this year.
In an effort to address its financial woes, the state utility company put forth a set of reform measures, such as property sales, restructuring overseas businesses and freezing workers’ wages.
Speaking of recent alleged corruption cases regarding solar energy development, Kang apologized and vowed to revamp the overall system of the government’s renewable energy projects and to devise measures to prevent any recurrences.
On Tuesday, the state Board of Audit and Inspection (BAI) said it referred 13 people, including Gunsan Mayor Kang Im-joon and two former industry ministry officials, to the prosecution after finding irregularities in a number of energy projects launched under the previous Moon Jae-in administration.
President Yoon Suk Yeol on Wednesday ordered the office of the presidential secretary for civil service discipline to carry out a thorough investigation into the decision-makers behind solar energy projects over the past four to five years, according to his office.
Source: Yonhap News Agency