High bills, fat checksThe state-run utilities company, the Korea Electric Power Corporation (Kepco), will be handing out a bonus check of 20 million won ($18,100) on average to each employee at the end of this month, more than double from last year. The company had earned the top A rating from a government evaluation of public institutions in June, making it eligible for a bonus double the base salary figure.
The payment is legitimate but nevertheless incomprehensible to most people. The electricity bill for August during the extraordinary heat wave had unsurprisingly high figures. Because of the surcharge system, over 8.7 million households received a bill for August power usage that was 50 percent higher than in July. Another 2.9 million households paid more than double and 120,000 households more than fivefold.
Kepco explained that its bonus payout is unrelated to the spike in electricity charges for the summer. But it still owes its staggering performance to an energy surcharge that is only levied on households. Sales from retail and household power supplies took up 13 percent and 17.5 percent of the company’s revenue last year. It was earning more from households than businesses and factories. The company earned a fat check because of the heavy levy on households that increases their energy consumption during the peak summer and winter seasons.
The utility company’s balance sheet was also helped by cheap crude and other low fuel prices, a factor of which the workers had no part. The company has actually done little to earn such a generous reward. It claims it has contributed to various energy-related state projects, but that cannot entirely persuade angry taxpayers. The company’s bottom line has been improving sharply. In the first half of the year, Kepco recorded an operating profit of 6.3 trillion won, up 46 percent from a year ago. Its profit nearly doubled to 11.3 trillion won last year from 5.7 trillion won in 2014.
This year’s profit is expected to top 15 trillion won.
The company and its utility units are generating bigger operation profit yields than major manufacturers like Samsung Electronics and Hyundai Motor. But instead of spending the profit to reduce its debt of over 100 trillion won, it continues to lavish it on its employees.
It is not just the fat check that is angering the public. The people cannot understand how the management style of profiting from consumers deserves to be so highly rated. Nothing seems to be normal with public institutions.
JoongAng Ilbo, Sept. 24, Page 26