Biz community unified against Kepco rate hike

Eighteen business lobby groups including the Federation of Korean Industries (FKI) and the Korea Chamber of Commerce and Industry raised a unified voice yesterday against an electricity price hike proposed by the Korea Electric Power Corporation (Kepco).

“The electricity rate for industrial use was raised 12.6 percent last year alone,” the FKI said in a statement.

“The residential rate rose only 4.1 percent while the industrial rate increased 61 percent in the last 10 years.”

According to the Organization for Economic Cooperation and Development, the country’s industrial electricity rate is not low compared to the residential rate, the FKI said, adding that the industrial to residential rates in Korea is 0.698 compared to 0.586 in the United States, 0.663 in Japan and 0.608 in Britain.

The business community said that if an electricity price hike is inevitable, rates for all industrial, general and residential uses need to be changed realistically and the government and Kepco need to set up predictable plans for future electricity price increases.

It also said Kepco needs to be more transparent over the ratio of electricity prices to production cost.

The FKI earlier said the ratio given by Kepco had some irregularities but the nation’s largest electric utility company said this is because the FKI compared estimates of the ratio to actual results last year.

Kepco has stated that electricity rates are so low that it cannot cover its operation costs and recently suggested that the government raise electricity prices by an average of 13.1 percent.

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