Minister not ruling out electricity hike in 2011

New Knowledge Economy Minister Hong Suk-woo said yesterday he is considering raising the price of electricity, possibly as early as this year, although he stopped short of confirming whether or when the move would be applied.

“We’re considering all possibilities,” he said yesterday when asked if the price will be revised next month.

Korea Electric Power Corp.’s board of directors agreed to raise the electricity rate by 10 percent on Nov. 17. Traditionally, Kepco suggests price adjustments to the government, and if these are approved, the power company’s board puts the issue to a vote.

This time, however, the process was reversed, with the company directly moving to vote on the issue and then awaiting government approval.

“I believe this is moving [the process forward] in the right direction,” Hong said.

The price of electricity has been a thorn in the government’s side recently as it was reluctant to raise the rate for fear of adding to inflationary pressure at a time when Seoul is struggling to keep a lid on consumer prices.

However, it must find a solution to the nation’s growing demand that threatens further power outages, while also coming up with an answer to stem Kepco’s losses. At present, electricity rates do not quite cover their production costs.

“It is important for the ministry to help Kepco recover its costs,” said Hong. “We also need to prevent the overuse of electricity.”

By Limb Jae-un [jbiz91@joongang.co.kr]