The government and KEPCO have frozen the adjusted unit price for fuel in the second quarter, a key factor in electricity rates.
However, as previously announced, as the standard fuel cost and climate environment rate are raised, the electricity rate will rise by 6.9 won per kWh from next month.
KEPCO announced on its website today (29th) that it has fixed the fuel cost adjustment unit price for April to June at 0 won/kWh (kilowatt hour).
This is in accordance with the government's announcement of an opinion to suspend the application of the 2Q fuel cost adjustment unit price yesterday.
The fuel cost adjustment unit price for the second quarter calculated by KEPCO was 33.8 won/kWh.
KEPCO submitted a proposal for a 3.0 won/kWh increase to the government on the 16th by applying a quarterly adjustment upper limit.
However, the government did not accept this and made them maintain the current fuel cost-adjusted unit price.
The quarterly fuel cost adjustment unit price is calculated by KEPCO and submitted to the Ministry of Trade, Industry and Energy.
By freezing the fuel cost adjustment unit price, the additional burden on households is reduced immediately.
However, the burden is expected to increase on KEPCO's management, which is expected to experience the largest loss in its history this year.
The biggest reason the government decided to freeze fuel costs is because of the price burden.
According to KEPCO, the government had a factor to adjust the fuel cost adjustment unit price due to the increase in international fuel prices, but it is necessary to promote stability in the lives of the people who are suffering from the prolonged Corona 19 crisis and high inflation rate. He explained that it is necessary to consider the increase in the standard fuel cost and climate environment rate.
In addition, President-elect Yoon Seok-yeol's pledge to freeze electricity rates in April may have influenced this decision.
However, the Presidential Transition Committee said yesterday that the electricity rate issue is a matter to be decided by the current government.
As the government freezes the fuel cost adjustment unit price, there is concern that KEPCO's business situation will worsen further.
KEPCO posted an operating loss of KRW 5.8601 trillion last year, the largest in history, and is expected to suffer a large operating loss this year unless electricity rates are significantly increased due to the recent surge in fuel costs.
Even though the fuel cost adjustment unit price is frozen, electricity rates will be partially increased from next month.
Electricity rate consists of basic rate, electricity rate (standard fuel cost), fuel cost adjustment rate, climate environment rate, etc. This is because the standard fuel cost and climate environment rate rise among them.
At the end of last year, the government announced that it would raise the standard fuel cost by 4.9 won per kWh twice in April and October for a total of 9.8 won.
Another item, the climate and environment fee, will also be raised by 2 won from April this year.
Accordingly, from the 1st of next month, the electricity rate is scheduled to increase by 6.9 won per kWh.
If the 6.9 won increase, the electricity bill burden for a four-person household using an average of 307 kWh per month will increase by about 2,120 won per month (excluding VAT and power-based fund).
(Photo = Yonhap News)