The government and KEPCO have frozen electricity rates for the third quarter, effective from July 1.
KEPCO announced today (21st) that it has decided to apply the final fuel cost adjustment unit price for July to September at -3 won per kWh, the same as in the second quarter.
As a result, the perceived rate felt by consumers is the same as in the second quarter.
If the fuel cost linked to electricity production such as liquefied natural gas (LNG), bituminous coal, and oil is reflected, the fuel cost adjustment unit price is 0.0 won per kWh, which should be 3.0 won higher than in the second quarter (-3 won).
The change in fuel cost is the value obtained by subtracting the standard fuel cost (average fuel cost for the preceding year) from the actual fuel cost (average fuel cost for the preceding three months).
According to KEPCO, the price of bituminous coal for the previous three months (March to May) averaged 133.65 won per kg after tax, 490.85 won for LNG, and 521.37 won for BC oil, which is a significant increase in performance fuel costs, mainly from oil prices, from the second quarter. I did.
However, this was not reflected, and the group was bundled in the same way as in the previous quarter.
In response, the Ministry of Trade, Industry and Energy said, "There was a factor in the adjustment of fuel cost in the third quarter due to the sharp rise in international fuel prices from the end of last year, but the need to promote the safety of the people who are suffering from the prolonged Corona 19 and high inflation rate since the second quarter considered,” he explained.
He added that he also took into account the possibility of utilizing the unadjusted amount that occurred when determining the adjusted unit price in the first quarter.
However, the Ministry of Trade, Industry and Energy announced that if the current high fuel cost level is maintained in the second half or if the fuel cost increase trend continues, it will review the change in fuel cost to be reflected in the adjusted unit price in the fourth quarter.
Although the possibility of an increase in the fourth quarter is open, it seems that the use of a fuel price indexation system is expected to grow stronger as electricity rates are artificially tied for two consecutive quarters despite fuel cost fluctuations.
In addition, KEPCO's earnings burden is expected to increase as fuel cost increases are not reflected in the rate in a timely manner.