Kepco to keep electricity rates frozen for 4th quarter despite higher costs

The state-run Korea Electric Power Corporation (Kepco) said Monday it will keep electricity rates unchanged in the fourth quarter despite higher raw material prices and its financial difficulties.

The adjusted fuel cost, a key component of electricity rates, will remain at the maximum level of 5 won per kilowatt-hour for the October to December period, Kepco said.

Kepco has kept the adjusted fuel cost at 5 won (3 thousandths of a cent) per kilowatt-hour for 18 consecutive quarters since the third quarter of 2022.

The adjusted fuel cost is set before each quarter within a range of plus or minus 5 won per kilowatt-hour, based on energy prices, including coal and liquefied natural gas (LNG), over the previous three months.

Kepco said rates were due to rise by 7.3 won per kilowatt-hour in the fourth quarter under the fuel cost adjustment formula. The decision to freeze rates is expected to further weigh on the company's finances.

The company's financial difficulties began after it continued to supply electricity at prices below production costs as global energy prices surged between 2021 and 2023 following Russia's invasion of Ukraine.

Kepco and its power-generating subsidiaries had a combined debt of 210.7 trillion won ($152.1 billion) as of the first half of this year.

Yonhap