Electric bill discounts are best solution, say experts

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Electric bill discounts are best solution, say experts

A panel of experts recommended Tuesday regular discounts on electric bills during the summers - and keeping the country’s controversial progressive billing rate system.

According to the Ministry of Trade, Industry and Energy, the consultative body proposed to the ministry and Korea Electric Power (Kepco) that regular discounts would lower electric bills for the most number of households compared to other alternatives.

The government is considering changing its electric billing system after criticism mounted about high electric bills during the summer as more Koreans use air conditioners. The government has implemented temporary summer discounts in recent years to address high electric bills.

Discussions had focused on whether the government would completely end the progressive billing system, in which rates increase based on the amount of electricity used. Under the system that has been in place for 40 years, household electricity bills are divided into three rates, and the heaviest users are billed at a rate three times greater than the lowest.

Critics have argued that the system made sense when only rich Koreans could afford air conditioners, which are now in general use.

The government considered three proposals: standardizing summer discounts, streamlining the progressive rates from the current three rates into two during the summer, or implementing a flat-rate system throughout the year.

The committee of experts explained that the regular summer discounts would lower electric bills for 16.3 million households, impacting more than the other two proposals.

Altering the billing system into two rates instead of the current three would benefit only six million households, while the flat-rate system would decrease bills for eight million users under the highest-usage category.

The consultative body added that the latter system would also raise bills for 14 million users in the lowest category, which would require further discussions for approval.

The committee said it recommended regular discounts as there was a need to maintain the current progressive system in order to manage high demand during the summer.

The Trade Ministry said that in order for the final recommendation to be implemented, Kepco has to receive approval from its board of directors and make a final proposal to the government. The government said it expects a new billing system to be implemented next month.

BY CHAE YUN-HWAN [chae.yunhwan@joongang.co.kr]
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