KEPCO President Kim Jong-kap.

Korea Electric Power Corp. (KEPCO) is at loggerheads with the government over electricity charge increase issues in the wake of its energy paradigm shift to wean the country off nuclear power.

At the center of the dispute is the abolishment of special discounts for electricity charges, which essentially means a rise in electricity charges. KEPCO announced that the power company, saddled with rising losses caused by anti-nuclear policies, no longer shoulders social costs.

The Ministry of Trade, Industry and Energy (MOTIE), a decision maker for electricity charge rates, issued a kind of warning against the move.

KEPCO President Kim Jong-kap took issue with a clause of giving special discounts for electricity use. President Kim said in an interview that the electricity charging system is in rags with all kinds of discounts. He demanded that special discounts in place be stopped and no new discounts be created.

Discount regimes, operated by KEPCO, vary. They include a deduction on the required electricity amounts as well as discounts on homes’ preserving electricity amounts, EV charging, primary and secondary schools and traditional markets, and new/renewable energy and ESS charging.

The power company’s assistance for the underprivileged and policy support stand at 1.15 trillion won.

“It is right to have costs related to welfare and industry policies covered with government budget,” President Kim said.

KEPCO will make public electricity charge rates of all usage categories falling below production costs, he added.

As to the weaning of nuclear power, one of President Moon Jae-in’s core national policy initiatives, he said the nation has to come along with nuclear power at least until 2050 to tackle environmental issues such as global warming.

At a recent audit of the power company by the National Assembly’s Trade, Industry, Energy, SMEs and Startups Committee, KEPCO President Kim indicated the possibility of raising electricity charges, saying that electricity rates not yet discharged by payments ought to be shouldered by anyone else some other day.

KEPCO’s business performance has deteriorated to the extent that debts have soared to 123 trillion won in two years since the introduction of the policy to wean Korea off nuclear power.

The power company has been struggling with poor business performances as it suffered 208 billion won in operating losses last year in six years. KEPCO logged 928.5 billion won in operating losses in the half of the year.

The government made it clear that it is opposed to abolishing special discounts in electricity rates. It said underprivileged people would receive direct damage and no prior consultation.

Appearing at the session of the Special Committee on Budget and Accounts of the National Assembly on the same day, Minister of Trade, Industry and Energy Sung Yun-mo said the government had never held prior consultations with an issue of revamping electricity charges with KEPCO and it was not considering it. He also said he was opposed to the abolishing of a package of special discounts in electricity rates.

A MOTIE official said the restructuring of electricity charges, including the abolishing special discounts, is a matter of approval from the government. The matter cannot be determined in a short period of time, based only on KEPCO’s profits.

The overall production costs are made public by the Ministry of Economy and Finance (MOEF) in the same format, and regulations need to be amended to disclose details of the electricity production costs.

KEPCO’s proposal of abolishing special discounts in electricity rates is out of the question, energy industry sources said. The government repeatedly proclaimed no raise in electricity rates and the general election is slated for next April.

An aerial view of KEPCO headquarters in Naju, Jeollanam-do. (Photos: KEPCO)