Kepco says hike fairly calculated

Korea Electric Power Corporation (Kepco) defended its decision earlier this week to propose a 10.7 percent hike in electricity prices, in the face of rising opposition from the government.

Board member Lee Gi-pyo said the rate was decided based on the need to stabilize the nation’s power supply, while also taking into consideration the sustainability of the electric-power industry and the need to control inflation. Lee made the remarks at a press conference yesterday.

“We are not trying to compensate for the deficit we have seen over the past four years. We just don’t want to post another operating loss this year,” said Lee, referring to the company’s complaint that the current price does not meet the cost of production.

“The accumulated debt in the electric-power business may deliver many crises to the next generation, and that may cause them to face a 40 percent [price hike down the road, unless action is taken],” he said.

Lee said the continued deficit is hindering Kepco from embarking on any new projects overseas.

“Kepco’s credit rating has dropped as the company has strived to follow the government move to stabilize consumer prices. Our current rating makes it difficult for us to pursue any business projects overseas.”

Kepco yesterday unveiled a detailed plan for its proposed price hike, with the industrial rate to be increased by 12.6 percent and that for individual households due to climb 10.3 percent.

It also specified different rates by industry, allocating a 6.4 percent rise for agricultural use and a 3.9 percent jump for educational use.

By Lee Sun-min [summerlee@joongang.co.kr]