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Kepco, facing massive debt, begs to raise bills

Published: 16 May. 2024, 19:06

PARK EUN-JEE
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Kim Dong-cheol, president and CEO of the state-run Korea Electric Power Corporation, speaks during a briefing in the central city of Sejong on Thursday. [YONHAP]

The head of Korea Electric Power Corporation (Kepco) pleaded the need to hike electricity bills to reflect rising in fuel prices as the of the state-run entity continues to struggle financially.

“Kepco has been struggling to minimize rate hikes, but the company can no longer deal with the accumulated losses by itself,” Kim Dong-cheol, the president and CEO of the utility operator, said during a meeting with reporters.

“I urge the government to make a minimal adjustment to electricity rates, as it is absolutely necessary,” Kim added.

His remarks followed Kepco's reporting a combined loss of 43 trillion won ($31.9 billion) from 2021 to 2023, as the company had not been able to raise electricity bills enough to cover high fuel costs during the Covid-19 pandemic amid high inflation.

The company's debt totaled 203 trillion won as of the end of last year, with annual expenditures on interest payments reaching 4.5 trillion won.

Kepco's earnings showed some signs of improvement recently, with its operating income for the January-March period reaching 1.29 trillion won compared to a loss of 6.17 trillion won a year ago.

But Kim said uncertainties remain, considering high global fuel prices coupled with volatility in the foreign exchange market.

“Kepco has been working to minimize inflation and ease household burdens by acting as a buffer against the factors driving pressure to raise electricity rates,” Kim said.

The Kepco chief noted that without normalizing electricity rates, the company will face challenges in securing funds to maintain its infrastructure. This could harm the electricity sector and ultimately impact the country's industrial competitiveness.

BY PARK EUN-JEE, YONHAP [[email protected]]