Kepco ending its household discount programKorea Electric Power (Kepco) will end its special discount for households starting next year, which could signal the start of an increase in consumer energy bills.
The company on Monday said it was no longer extending the electricity bill discount to households, which it has been providing since February 2017.
It has been providing a 15 percent discount on monthly electricity bills during summer and winter to households that reduced their electricity consumption by 20 percent, compared to the average monthly electricity consumption during the same months in the past two years.
A 10 percent discount has been offered during other seasons.
In the last three years, 5,315 households have taken advantage of the discount policy, for a total savings of 107.2 billion won ($93 million), according to Kepco. This year alone, 1,819 households received the discount, with the savings costing a total of 45 billion won.
The company decided to end the program after studies found that the discount did little to bring changes to energy consumption.
Kepco said it will instead make investments that help improve energy efficiency, such as supporting apartments changing to more power efficient LED lighting.
Kepco has decided to gradually lower the discount offered to power used to charge electric vehicles (EV), which was adopted in March 2016, through June 2022 to help EV consumers and support the EV industry.
This not only includes those who drive EVs but also those operating EV charging station.
“We will keep the current discount level for the next six months to give enough time for consumers to be aware of the changes taking place before starting to gradually reduce the discount starting in the second half of 2020,” said a Kepco official.
This year, the discount on the charging bill is estimated to cost around 33.3 billion won.
Kepco has decided to keep the current electricity bill discount for traditional markets for another six months.
Since July 2011, the traditional market was given a 5.9 percent discount on their electricity bills.
On average, 24,000 businesses were recipients of the electricity bill discount, with the annual discount amounting to 2.6 billion won.
Kepco also said it will commit 28.5 billion won in the next five years to raise the energy efficiency of the traditional market.
The Korean power supplier has been facing rising costs, especially since the Moon Jae-in government has been phasing out nuclear power plants.
Earlier this month, the government decided to pull the plug on Wolsong-1 despite the nuclear power plant in Gyeongju, North Gyeongsang, having around 18 months left on its lifespan. The company cited the lack on economic feasibility for the shutdown.
It was the second nuclear reactor that was shut down, with the Kori-1 plant closing down in 2017.
BY LEE HO-JEONG [firstname.lastname@example.org]