Korea Electric Power Corp. will freeze electricity rates for the second quarter despite falling fuel costs, as South Korea’s state-run utility struggles with record debt levels.
The Ministry of Trade, Industry and Energy has directed KEPCO to maintain the fuel cost adjustment at 5 won per kilowatt-hour from April through June, according to a statement released Thursday. The decision comes as the utility’s debt reached 205.18 trillion won ($151.6 billion) at the end of 2023, up 2.73 trillion won from a year earlier.
The government’s intervention aims to address KEPCO’s “severe financial situation” and significant unadjusted amounts in electricity usage charges, which make up a substantial portion of consumer bills.
South Korean electricity rates consist of several components including a basic charge, usage charge, climate environment charge, and the fuel cost adjustment, which typically fluctuates within a range of ±5 won per kWh based on global fuel prices.
The rate freeze follows a significant 9.7% increase in industrial electricity prices implemented last October as part of ongoing efforts to shore up the utility’s finances while balancing energy affordability concerns.
