Court rules to uphold Kepco’s billing system

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Court rules to uphold Kepco’s billing system

The Seoul Central District Court on Thursday ruled against plaintiffs who sued the Korea Electric Power Corporation (Kepco) for what they called an unfair progressive billing system on electricity usage.

The court ruling is the first on a case related to the progressive billing system since 2014.

Seventeen plaintiffs sued Kepco two years ago, requesting a refund of their electricity bills, calculated under the progressive electricity rate. They complained it is unfair that the rate is applied to household electricity use only, and not to business use.

In Korea, a progressive billing system is applied to household electricity usage, which means that people pay more per unit if they use more. The system was established 42 years ago by Kepco, the sole provider of electricity in Korea, under approval from the Ministry of Trade, Industry and Energy. There are six levels of usage and six rates per unit. For businesses and industries, there is no such system.

A household that uses 100 kilowatts per hour for a month is in the first level of usage, and the levels increase per 100 kilowatts per hour used. Households using more than 500 kilowatts per hour pay at the sixth-level rate.

“The same electricity is provided to households and companies,” the plaintiffs argued in court, “yet households need to pay some 11 times more than companies would because of the progressive billing system.”

Lawyer Kwak Sang-eon of Law Firm Inkang, who represents the plaintiffs, said that Kepco, as the sole provider of electricity in Korea, is violating the Act on the Regulation of Terms and Conditions, “because consumers, without alternate options, cannot refuse or revise terms that are unfair to them.”

The court, however, ruled against the plaintiffs, saying “unequal terms is not reason enough to nullify the progressive billing system,” and for lack of evidence against the alleged inequality in Kepco’s billing system.

Meanwhile, members of the Saenuri Party, the central government and Kepco formed a cooperative body to discuss revising the progressive billing system, and are expected to hold a hearing this month. Kepco has admitted as well the need for change in the current progressive billing system, though it strongly opposed any plan to do away with it completely.

“I agree that bills that are extraordinarily punitive should not exist,” said Kepco CEO Cho Hwan-eik at the National Assembly inspection on Wednesday. “I will review measures to revise the billing system.”

“Still,” he said, “considering that there are users who use a lot of electricity, a progressive billing system needs to exist. We cannot revoke the system.”

There are nine more cases on progressive billing system currently waiting on rulings by courts.

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