Utility rate decisions delayed as politicians battle over bills

Electricity meters affixed to a wall in Seoul on Friday [YONHAP]

Gas and electricity rates decisions, which were supposed to be announced Friday, have been delayed as politicians bicker over whether they should help the average person or support the troubled utilities.

The government plans to release utility prices for second quarter as early as possible, according to the Ministry of Trade, Industry and Energy Friday.

The Energy Ministry was supposed to announce the electricity and gas rates for the second quarter on Friday, yet it delayed the decision, citing the need for additional deliberation on the current economic situation, energy prices and the possible impact that the rate increases may have on the economy.

In Korea, electricity rates are announced before the beginning of every quarter, and the gas rates are set in every odd-numbered month, through a negotiation between the lawmakers and the government.

The government and the lawmakers agree that the utility rates need to go up amid higher deficits at the energy companies, yet they couldn't decide how much.

“We have reaffirmed that the electricity and gas bills increase is inevitable,” said Rep. Park Dae-chul of People Power Party, head of the National Assembly’s Policy Committee, on Friday during a press conference held in Yeouido, western Seoul.

“However, in regards to the timing and the scale of the increase, the Energy Ministry has proposed multiple scenarios, and we decided that further discussion is needed to choose which one would be most suitable.”

Park added that “there was a point made that the Korea Electric Power Corporation and Korea Gas Corporation need to make restructuring efforts first, as the rate increases are bound to weigh heavily on Korean people.”

Kepco posted a record-high net loss of 24.4 trillion won ($18.7 billion) last year due to high fuel prices.

In order to erase Kepco's rising deficit, rates for electricity would have to be increased by at least 51.6 won per kilowatt hour in 2023, which is three times the 19.3 won per kilowatt hour increase through 2022, according to the Energy Ministry’s report.

In the first quarter, the government increased the electricity rate by 9.5 percent, the biggest jump since the oil crisis in the 1980s. In 2022, Kepco raised electricity rates three times: by 6.9 won per kilowatt-hour in April, 5.0 won in July, and 7.4 won in October.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]