Kepco begs Assembly to let it borrow more
![An electronic board showing the real time electricity demand and supply at Kepco’s office in Seoul on Dec. 5. The government and Kepco argues that unless the legislators approve on the bill that will allow Kepco to secure necessary finance by more issuance of corporate funds, it will be forced to raise electricity bills next year. [YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2022/12/12/33e05ca8-3828-4fdc-9493-2d4c139f11fe.jpg)
An electronic board showing the real time electricity demand and supply at Kepco’s office in Seoul on Dec. 5. The government and Kepco argues that unless the legislators approve on the bill that will allow Kepco to secure necessary finance by more issuance of corporate funds, it will be forced to raise electricity bills next year. [YONHAP]
Korea Electric Power Corp. (Kepco) is demanding the National Assembly pass a bill before the end of this year that will significantly raise the amount of bonds the company can issue.
The company said in a statement Sunday that the legislation is necessary for its own liquidity and to ensure stable electricity supply for Korea.
“Without raising the limit on corporate bonds, we will not be able to purchase the electricity or repay existing borrowings,” Kepco said in a statement. “This could lead to a national economic crisis with electricity supply being disrupted and the electricity market paralyzed.”
Under the Korea Electric Power Corp. Act, the company can issue bonds twice the size of its capital and cash reserves combined.
The proposed legislation would alter the law and raise the bar to five times the company's combined capital and cash reserves. It also allows six times that level in case of an emergency and if approved by the Minister of Trade, Industry and Energy.
While the bill was put to a vote at the National Assembly Friday, it failed to get the two-thirds support it needed.
Among the 203 lawmakers who voted, 89 approved while 61 did not.
Many members of the Democratic Party led by environment activist Yangyi Wonyoung opposed.
Kepco won’t be able to avoid bankruptcy no matter how many bonds it issues, she said.
“President Yoon Suk-yeol has blamed Kepco’s losses on the nuclear energy phase out and renewable energy [policies pushed by President Moon Jae-in],” the DP lawmaker said.
![Democratic Party lawmaker Yangyi Wonyoung at a National Assembly meeting in November. Most of the DP led by Yangyi has opposed to raising the maximum limit on Kepco’s corporate bond issuance. [YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2022/12/12/86d42a14-3e8b-4dc5-b94d-d3683fa41ec9.jpg)
Democratic Party lawmaker Yangyi Wonyoung at a National Assembly meeting in November. Most of the DP led by Yangyi has opposed to raising the maximum limit on Kepco’s corporate bond issuance. [YONHAP]
The Moon government, backed by the DP, kept electricity bills frozen for several years, hurting Kepco's bottom line.
Under the current legislation, Kepco can only issue 91.8 trillion won ($75 billion) in bonds this year. It has already issued 67.2 trillion won worth.
Kepco keeps insisting on being allowed to charge customers more.
High global energy prices have driven up overall consumer prices.
Consumer prices in November rose 5 percent year-on-year, the slowest increase since April. However, the growth rate slowed largely thanks to falling fresh produce prices especially for vegetables.
Utility bills including electricity and gas have risen 23.1 percent.
Next year, Kepco is expected to suffer an operating loss of 14 trillion won.
BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]
with the Korea JoongAng Daily
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