Vice Minister of Industry “Considering an increase in the industrial electricity rate … Application of a differential application to high consumption companies”

“In discussion with the Ministry of Finance, including prices, etc… Preferably at the end of this month”

(Sejong = Yonhap Infomax) Reporter Hyo-ji Lee = The government is considering a plan to raise industrial electricity rates as well as household electricity rates to address KEPCO’s shortfall.

Second Vice Minister of Trade, Industry and Energy Park Il-joon met with reporters on the 21st and said, “Recovery of the price function is the most important.

Industrial electricity users account for only 0.2% of total users, but they use half of the total electricity.

According to a survey by the International Energy Agency (IEA), as of 2020, the electricity rate for households in Korea was $103.9 per MWh, ranking only 31 out of 34 countries in the Organization for Economic Co-operation and Development (OECD) .

Industrial electricity rates are also among the cheapest at $94.3 per MWh, which ranks 22nd among 34 OECD countries.

Recently, the OECD stated in the ‘Korea Economic Report 2022’ that Korea’s electricity rate is the lowest among OECD member countries, and that the electricity rate system is subdivided into residential, agricultural and industrial use, so there is a distortion large amount of subsidies. between sectors.

Vice Minister Park said, “Most large capacity users claim to have a high cost recovery rate, but now it’s only 60%.

He continued, “Electricity rates vary depending on the size and amount of cost recovered. Considering KEPCO’s deficit, it should be recovered quickly, but since it has an impact on business activities and prices, we consider set the period and width and negotiate with the Ministry of Strategy and Finance.” .

Deputy Minister Park added, “It is desirable that the rate revision for large capacity operators be decided by the end of September when the fuel cost adjustment unit price is decided in the fourth quarter if possible.”

He said that this week he will give an explanation of groups by industry and that Minister Lee Chang-yang will also arrange an explanation.

Deputy Minister Park also presented a plan to launch an energy saving campaign, talking about ways to increase the proportion of nuclear power plants that have low power generation costs.

He said, “The operation of nuclear power plants needs to be increased as much as possible to reduce the part that leads to KEPCO’s charge burden.

The Ministry of Trade, Industry and Energy is currently discussing ways to increase the limit of corporate bond issuance by the ruling party and KEPCO.

Vice Minister Park said, “It is stated in the KEPCO Law and there is no penalty provision, but the law should be reviewed by the end of the year.”
He said that he is not discussing the introduction of a random tax, which is followed in the European Union (EU), etc.

Deputy Minister Park said, “We have not withdrawn the SMP cap. We are discussing more about the extent to which the opinion of the Regulatory Review Committee of the Ministry of Trade, Industry and Energy is acceptable.”

The Ministry of Trade, Industry and Energy promoted a system to cap the SMP used by KEPCO when it buys electricity from power generation companies in May, but it is unclear whether it will be implemented due to opposition from the sector private power generation. industry.

PPPs argue that the surge in SMP and KEPCO’s deficit is due to KOGAS’s high gas price for power generation, and argue that the SMP price ceiling should not be established to regulate PPP operators, but instead enforce a KOGAS gas price cap system for power generation. .

This article was submitted at 17:14 on the Infomax financial information terminal.

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