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Korea's energy firm proposes price hike
Publication Date : 11-07-2012
The board of directors of Korea Electric Power Corp. agreed to propose a 10.7 per cent increase in electricity charges to the government, the state-run energy supplier said on Tuesday.
KEPCO insisted that the proposal is inevitable to stabilise living costs and meet rising production costs.
“Electricity is a precious shared resource that is produced at only 40 per cent efficiency from 100 per cent imported carbon-emitting energy sources, such as oil, coal and liquefied natural gas,” said Lee Gi-pyo, KEPCO non-standing director and member of the board of directors.
Citing the examples of Japan and Taiwan which increased charges by 15 per cent to 35 per cent, the board called for a readjustment of the rate “to a realistic level” to cut the nation’s energy consumption.
“A 10 per cent rise in electricity charges only requires a 10 per cent cut in power usage,” Lee said, assuring that “higher cost will result in less energy consumption”.
The firm said that it will separately take care of the debt accumulated due to cheap energy fees in the past, which will by no means be reflected in the proposed new rate.
This is not the first time that KEPCO has pushed for an increase this year. The energy company had pushed for a 13.1 per cent increase in April, which the Knowledge Economy Ministry dismissed, saying the rise was too dramatic.
Earlier this month KEPCO pushed for an even higher increase of 16.8 per cent, which was again dismissed.
The new proposal of a 10.7 per cent rise comes amid uncertainty and public skepticism.
Critics claim that the continued rate-hike proposals result from the 140 billion won (US$122.4 million) lawsuit that shareholders filed against former KEPCO president Kim Ssang-su for ever-growing debt due to insufficient rate increases.