Turn off landscape lighting when energy supply and demand deteriorate
▲ The government announced on the 21st that it will gradually realize electricity and gas rates from next year in order to completely resolve the cumulative deficit and receivables of Korea Electric Power Corporation and Korea Gas Corporation by 2026. The photo shows an electricity meter in a residential area in downtown Seoul that day. 2022.12.21 Yonhap News
In order to completely resolve accumulated deficits and receivables by 2026 at Korea Electric Power Corporation and Korea Gas Corporation, which are suffering from large-scale deficits amid soaring energy prices, the government will raise electricity and gas rates by more than double this year’s increase (19.3 won per ㎾h) from next year. It is said that it will be realized step by step at the level of 50 won. The government expects that the amount of corporate bonds issued by KEPCO and KOGAS will be drastically reduced from next year through gradual hikes in electricity rates and self-rescue efforts for fiscal soundness. However, efforts to amend the KEPCO Act, which increases the limit on issuance of KEPCO bonds from the current 2 times to a maximum of 6 times, will be made concurrently.
The Ministry of Trade, Industry and Energy stated in KEPCO’s management normalization plan recently submitted to the National Assembly’s Industry, Trade, and Energy Small and Medium Venture Business Committee that the factor for next year’s electricity rate increase was 51.6 won per kWh. For each item, the standard fuel cost per ㎾h is 45.3 won, the climate environment fee is 1.3 won, and the unit price for fuel cost adjustment is raised to 5.0 won. This is 2.7 times more than the three times this year. KEPCO’s deficit is estimated to rise to 34 trillion won by the end of this year.
The gas corporation will also raise rates from next year. The Ministry of Trade, Industry and Energy and the Korea Gas Corporation reported to the National Assembly on a plan to increase gas rates by 2.1 won per quarter next year to a minimum of 8.4 won and 2.6 won to a maximum of 10.4 won per quarter. Gas rates for residential use rose 5.47 won four times this year. Next year, gas rates are expected to rise from a minimum of 1.5 times to a maximum of 1.9 times this year’s increase. KOGAS’ receivables this year are expected to reach 8.8 trillion won by the end of the year.
In addition, the government will reduce the amount of gasoline and oil tax cuts from the current 37% to 25% from next year, and induce energy consumption reduction by strengthening energy saving incentives for households and businesses. If the energy supply crisis worsens, additional reductions in the time to turn off lights in the landscape and restrictions on elevator operation will be implemented.
Correspondent Sejong Kang Ju-ri