Some will get three-month break on power bills

The government will lower electricity bills for households and industries for three months this summer to help boost consumer spending and industrial exports.

According to the Ministry of Trade, Industry and Energy on Sunday, 64.7 million households that use more than 301 kilowatt hours of power per month are expected to save a total of 130 billion won ($117.4 million) from July through September.

About 30.3 percent of households nationwide use at least 301 kilowatt hours per month and each will average total savings of 33,750 won over the duration of the plan.

“The temporary discount on household and industrial electricity aims to reduce the burden of small businesses and middle and low income households,” said Chung Yang-ho, deputy minister of the ministry’s Office of Energy and Resources. “Kepco will cover about 500 billion won in discounts, as it recorded a successful first quarter with about 1.2 trillion won in operating profit.”

Korea has implemented a progressive electricity fee system to discourage excessive use of power. The system consists of six categories of monthly electricity consumption. Those who use the most power pay several times more than those who use the least.

Households that use 300 kilowatt hours or less (levels one to three) will not benefit from the temporary discounts, according to the government, because the price they pay for electricity is already below the cost of production.

The temporary discounts will benefit only households that use 301 kilowatt hours or more.

In addition, the government decided to provide an additional 50 percent discount to households with five or more children and family members who need electrically-operated medical equipment.

Also, the plan will revise the existing power bill payment system, to allow each unit in apartment buildings and officetel complexes to individually contract with Kepco to pay its power bills, instead of going through service providers that act as middlemen. Such service providers have been implicated in overcharging households.

The government also decided to provide 50 percent discounts on production line power bills for about 81,000 small and midsize businesses in welding and metalwork, as well as rice farmers’ pounding factories on Saturdays.

Those discounts will run through September 2016.

Despite the Energy Ministry’s recent decision to build two additional nuclear reactors and the slowdown of the domestic economy, the government and Kepco say they have no plans to lower the overall price of electricity or revise the pricing system.

President Park Geun-hye said at a cabinet meeting in December the Energy Ministry should lower electricity prices as global oil got less expensive.

However, the ministry and Kepco refused, citing additional costs involving the carbon credit trading system and compensation to property owners where Kepco opens plants and distribution facilities.

BY KIM JI-YOON [kim.jiyoon@joongang.co.kr]